PCM exclusive: acquiring transactions from Asia

The global economy is rebalancing towards Asia. As this happens, acquirers and merchants in Europe and North America would be wise to think about how Asian consumers want to pay for goods and services.

Acquirers should focus on Asia

Exclusive data provided to Payments Cards & Mobile by PPRO reveals exactly how Asian consumers like to pay across borders – and the payment methods acquirers should be looking to offer in consequence.

With total cross-border spend in the region now breaking through half a trillion dollars (more than $546 billion), acquirers in Europe and North America risk losing out if they miss a few simple steps.

Apps to the fore

As is widely known, Chinese consumers prefer to pay by app – a method that now accounts for 70% of all online purchases and continues to grow at around 3% per year. Chinese shoppers spent $480 billion on cross-border purchases in 2022, using cards for just 18% of that expenditure.

“Acquirers may find the diversity of payment apps in some Asian markets challenging”

These figures from China reflect a broad preference for app payments which varies between markets.

In Hong Kong, apps are used in 53% of online transactions, while in Indonesia this figure is 55%.

One challenge overseas acquirers will face is the range of different payment apps used in some markets. In Indonesia, for instance, the most popular payment apps such as GoPay, Kredivo or Ovo all have market share at 10% or below.

Even in markets traditionally seen as card-centric, such as Japan, there’s evidence that digital wallets are growing in importance.

Although 8% of online transactions are still paid for in cash, and cards still account for 64%, the share of digital wallets in online payments is growing year on year.

As with other markets in the region, however, the diversity of wallet solutions offered, including PayEasy and Konbibi, presents a challenge.

Mobile optimisation a must

Alongside the growth in wallet transactions, Asian consumers are showing a growing preference for mobile payments over laptop and tablet.

The implication for merchants is that more should be done to optimise their digital estate for mobile as Asian consumers increasingly shop via smartphone.

In Japan, where consumers spent $30 billion on cross-border payments last year, transactions via mobile device grew by a third over the last three years, rising from 27% of all transactions in 2020 to 39% last year.

A similar pattern of growth is seen throughout the region, making mobile optimisation essential for merchants.

“Total cross-border commerce in the region now exceeds half a trillion dollars annually.”

Across the region, online spending is expected to rise by anything between 60 and 100% over the next two years – with the proportion of that spend undertaken via mobile growing by around a third, and the proportion of cross-border transactions also growing fast.

For acquirers and merchants, the implications are clear.

Firstly, prepare for customers to engage via mobile device. Secondly, assess the major originating markets for your customer base and consider the implications both for the languages used on your site, and the payment methods offered.

And finally, make sure your payment security is optimised for the specific challenges those payment methods present – such as the wide use of UPI-based instant payments in India.


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