UPI, QR codes, mobile wallets: India is seeing the fastest growth in digital payments in the APAC region

India, China, and the Asia-Pacific region have seen a surge in the popularity of online payment methods in e-commerce. The report shows that traditional payment methods such as cash and bank transfers are on the decline. While China led the way in alternative payments in 2023, India was in second place.

According to a report by data analytics and consulting firm GlobalData, India saw the fastest growth in the share of alternative payments in the APAC region from 20.4% in 2018 to 58.1% in 2023, earning it the second spot.

“This significant uptake of alternative payment solutions can be attributed to the widespread use of mobile wallets, largely driven by UPI, which facilitates real-time mobile payments by simply scanning QR codes,” the report said.

In the APAC region, alternative payments are the most popular payment tools for e-commerce payments, thanks to the availability of mobile and digital wallets. While alternative payments are already popular in India and China, GlobalData e-commerce analysis found that cash-intensive countries such as the Philippines, Malaysia and Indonesia are also seeing a similar trend. However, the report added that China and India have higher adoption rates compared to their peers.

Shivani Gupta, senior banking and payments analyst at GlobalData, comments: “While most Asian markets are traditionally cash-dominated, the use of alternative payment methods is growing in many markets in the region, both for online and in-store payments, outpacing those in the West. This trend is driven by the growing availability of smartphones and the Internet, the increasing convenience of electronic payments and the spread of mobile and QR code-based payment solutions.

According to GlobalData, alternative payment solutions account for more than 65 percent of the value of e-commerce transactions in China, which is the largest e-commerce market in the world. In 2018, China’s share was 53.4%, while India’s was 20.4%.

“China has one of the most mature mobile wallet markets in the world, and mobile wallets are widely used for everyday transactions as well as online payments. Alipay and WeChat Pay are well-known and widely accepted names among sellers,” the report reads.

Other Asian markets such as Indonesia, Hong Kong, Singapore and the Philippines are also seeing high levels of use of alternative payment solutions. Gupta said this trend is due to increasing internet and smartphone penetration and growing acceptance of digital payments by merchants.

The convenience, speed and security offered by alternative payment methods, coupled with the high expected growth of the overall e-commerce market in the region, are expected to increase the popularity of these payment tools and disrupt the consumer space in the region, Gupta said.

The survey was conducted in the second quarter of 2023 and involved approximately 50,000 respondents over 18 years of age in 40 countries.