Cash is still king in Asia despite China’s digital payments advance – PayPal
The emergence of digitalised payment platforms in Asia hasn’t gone unnoticed, with Alipay valued in the billions and Tencent, the owner of WeChat, becoming China’s first $100bn brand this year largely down to its integrated pay service.
However, despite such valuations suggesting that digital payments are dominant in Asia, a PayPal study has revealed that this is only really the case in China, with many other countries yet to transition from cash to digital as their primary choice of finance.
Having polled 4,000 consumers across India, China, Hong Kong, Singapore, Thailand, the Philippines and Indonesia, 57% of respondents said cash was their preferred payment method in day-to-day transactions, with just 12% favouring digital wallet payments.
More than 70% of those polled in India, Indonesia and the Philippines cited cash as their primary payment method, whilst this figure stood at just 25% in China.
Even in Hong Kong and Singapore, two of Asia’s financial power hubs, more than 40% of people still preferred Cash.
So, why is this?
A lack of clarity and familiarity with digital payment services is a fundamental reason behind this, with only around half of the 4,000-people surveyed understanding what digital payment systems are, and only 23% understanding contactless payments both via credit cards, debit cards or phones.
Worries about privacy, and a lack of understanding in setting up the digital payment system is a further hindrance, with many people either unwilling or unable to use the platforms in the first place.
“You don’t know what you don’t know. There seems to be a lack of knowledge, not just about the new options available, but also what these can enable the consumers to achieve. Of those who have not adopted the new methods, 34% said not knowing enough about them was a key reason,” PayPal said.
It It is likely that a general transition from cash to digital payment methods will continue to occur, but it seems that education about the platforms could be all that is needed in many cases for this switch to take place.