As preferences tend to vary by country, there is an extensive range of payment methods in Asia for merchants to consider integrating if they hope to reach the maximum volume of consumers in the APAC region. To simplify this task, VNPTEPAY has built a bespoke all-in-one solution known as Gate2Asia.

Payment methods in China

As the world’s largest e-Commerce market, China accounted for USD 2.3 trillion of global online transactions in 2022. Despite amounting to over three times the turnover of the US market, there is still plenty of room for expansion. Projections estimate that the Chinese market will continue its strong growth trend, with a CAGR of 8.7%, helping the country’s e-Commerce sector reach a value of USD 3.2 trillion by 2026.

Despite the relatively low numbers of payment card penetration, high volumes of smartphone usage among Chinese consumers, paired with the popularity of mobile-based payment platforms — such as WeChat — ensure high volumes of mobile e-Commerce sales. Composing just over USD 1 trillion or 52% of total e-Commerce sales in 2019, Chinese mobile commerce had reached USD 2.2 trillion by 2021.

The most preferred online payment methods in China are Alipay, WeChat Pay, and UnionPay. Credit card penetration in China remains slow, though it is predicted to grow from its 2014 figure of just 16% to 44% by 2025. UnionPay, also known as China UnionPay or CUP, is a major card scheme in mainland China.

Instead of credit and debit cards, over 400 million users prefer to rely on alternative payment platforms. Mobile-based solutions are hugely online payment methods in China. The market is divided between Alipay, China’s most popular third-party online payment service (enjoying a 54% share), and WeChat Pay, the mobile payment and digital wallet service (with a 40% share).

The popularity of mobile applications within the Chinese market is due in no small part to their ability to combine social interaction, financial tracking, and relevant advertising. Mobile applications also allow for easy payments within a single ecosystem.

• Alipay
• WeChat Pay
• UnionPay
• Bank transfers

Payment methods in Southeast Asia

Although the Southeast Asian digital payment landscape is still developing, reports suggest that the internet economy will be worth around USD 200 billion by 2025. With a growing middle class and a strong base of young, tech-savvy smartphone users comfortable with digital wallets and online payment platforms, Southeast Asia is on the cusp of an e-Commerce transformation.

According to one report, 49% of urban consumers already use e-wallets in their everyday lives, but this number could potentially hit 84% by 2025.

Indonesia

Indonesia’s eCommerce market is booming and expected to show an annual growth rate (2021-2025) of 10.21%, resulting in a projected market volume of USD 56 billion by 2025.

Around half of all Indonesians still lack a bank account, so cash payments are crucial. Cards are slowly gaining popularity, though more traditional payment methods, such as online banking, bank transfers, and over-the-counter payments, are preferred payment methods in Indonesia. Krung Thai Bank, Bank of Ayudhya, United Overseas Bank, Bank Central Asia, Rakyat, Bank Mandiri, and Bank Negara are the most popular banks in the country.

With over 95% of Indonesia’s 281 million population already using alternative payment methods, accepting local payment methods is a must to reach a critical mass of the country’s consumers.

Over-the-counter payments in supermarkets

Cash transactions in supermarkets and convenience stores remain one of the most popular payment methods in Indonesia due to the high proportion of the unbanked population and relatively slow credit card adoption. Indomaret and Alfamart, two of the largest convenience store chains with 30,000 outlets nationwide, are popular places to purchase goods online using cash.

Popular payment methods in Indonesia

• Ovo
• Doku Wallet
• Virtual Accounts
• Online banking
• ATM payments
• Payments at convenience stores
• Visa
• Mastercard

The Philippines

The payments landscape in the Philippines is diverse, and cash payments are widespread, primarily due to low finance inclusion. In 2019, 29% of the population had a personal or jointly-owned bank account; after COVID-19, that figure jumped to 56%. However, making accurate predictions for further uptake in the future remains difficult.

e-Wallets, such as the local GCash or Smart Money, are present on the market but do not account for a significant portion of the local population.

Although there is a possibility that the popularity of smartphones will help locals to embrace technological innovation and boost the usage of e-Wallets in the future, the most popular payment method in the Philippines is online banking. Banks such as Banco de Oro, Metrobank, Bank of the Philippine Islands (BPI), Unionbank, and Asia United Bank (AUB) are not only popular for online payments but also for their recently improved online banking apps.

Popular payment methodsin the Philippines

• Online banking
• Cash-on-delivery (over-the-counter payments)
• ATM payments
• GCash
• Smart Money
• GrabPay
• Coins.Ph
• Cash payments in banks
• Convenience stores

Vietnam

The Vietnamese economy is highly dependent on cash, with almost 90% of all transactions in the country paid for in cash. However, the Vietnamese government has launched several initiatives to combat low banking penetration, and as of 2022, 60% of adults now have a bank account.

These initiatives promise to positively affect e-Commerce, which is expected to reach USD 13 billion in sales during 2023. Vietnam has also improved its local regulatory environment and transport infrastructure, helping the country to 8th place on the list of the world’s leading emerging logistics markets in 2021 before dropping to 11th place behind Thailand in 2022.

Popular payment methods in Vietnam

• Online banking
• Online banking QR
• Cash-on-delivery
• Ngan Luong
• Visa
• Mastercard
• ViettelPost
• VNPost

Thailand

Thailand has a relatively high banking penetration but lags behind in internet usage. While Thailand ranks 45th in the World Bank’s Logistics Performance Index, the country’s Business Regulation Level is comparably high, taking 26th place. The local e-Commerce market’s value amounted to USD 3.56 billion in 2017 and is projected to increase significantly, reaching USD 20.44 billion during 2023.

Popular payment methods in Thailand

• Online banking
• Convenience stores
• Visa
• Mastercard

Malaysia

With an e-Commerce sector projected to reach sales volumes of USD 10 billion by 2023, Malaysia enjoys high internet and banking penetration rates despite having a smaller population. The country enjoys a high quality of business regulation and is ranked 24th in the World Bank’s Doing Business scale, between Iceland and Mauritius. In 2024, e-Commerce sales are projected to amount to USD 8.1 billion, with growth steadily increasing over the coming years.

Credit and debit cards are very popular payment methods in Malaysia. Though only 23% of the population owned a debit card back in 2011, that figure had climbed to 74% by 2018, and consumers now view them as a safe and convenient way to pay for goods and services.

Popular payment methods and systems in Malaysia

• Online banking
• Over-the-counter payments
• Boost
• MCash
• Visa
• Mastercard
• PayNet

Japan

Japan has high internet, online banking, and card penetration rates. e-Commerce is also very popular among local consumers.

In 2019, 38% of purchases were made online, and total e-Commerce sales are projected to pass USD 175 billion during 2023. Additionally, Japan is ranked relatively high in the World Bank’s Logistics Performance Index (#5 in 2019), reflecting high levels of trade and transport infrastructure and efficient logistics services.

When it comes to payment methods in Japan, statistics show that 98% of the population have a bank account, 87% own a debit card, and 68% own a credit card. Besides the ever-popular Visa and Mastercard, businesses looking to work in Japan should consider offering the domestic card brand JCB — a particularly convenient option for foreign companies looking to tap into the country’s large consumer base.

Other than cards, Japanese consumers pay for goods and services using online banking, payment cards, or cash via convenience stores. For example, by checking out with Konbini, a popular payment system in Japan, consumers can pay at stores, including 7-Eleven, throughout the country.

Popular payment methods and systems in Japan

Konbini

JCB

Source: ecommpay.com