28 March, 2022 11:31 am

Southeast Asia’s e-wallet market growth rate is almost twice as fast as other regions, according to research from financial technology company Boku Inc. and Juniper Research.

In a report released in July 2021, Boku Inc. and Juniper Research forecasted that the total number of e-wallet users in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam would grow by 311% to nearly 400 million people in 2025. This is a clear example of the rapid growth of e-commerce in Southeast Asia .In comparison, e-commerce growth in Latin America was 166% during the same time period, while it was 147% in Africa and the Middle East.

In addition, e-wallets have also surpassed credit cards to become the most commonly used means of payment globally in 2019. It can be said that the consequences of COVID-19 have paved the way for the shift to e-wallets. More than 2.8 billion wallets were already in use at the end of 2020, and this number is forecast to grow by 74% to reach 4.8 billion by the end of 2025.

E-wallet market growth rate for the 2020-2025 period of China, India, Southeast Asia. Source: Buku.

There are two main types of electronic wallets. The first type  is card-based. Examples are Apple Pay and Google Pay, which are more common in developed economies. The second category is true store of value wallets like China’s Alipay or Grab’s GrabPay, which are more popular in emerging markets where credit card usage rates are still low.

Adam Lee, Boku’s Product Manager, believes that the e-wallet market will grow fastest in countries with low credit card usage. In developed economies such as North America and Western Europe, where e-wallets are mainly used to connect to credit cards, the growth rate of e-wallet markets would be slower as the technology offers limited additional benefits.

In 2020, there were 55 store-of-value e-wallet platforms with over a billion USD in annual transaction turnover. According to Buku, by 2025, this figure will have risen to 69 wallets. SadaPay of Pakistan is forecasted to be the world’s fastest growing e-wallet in the next 5 years, followed by Mercado Pago and PicPay in Brazil.

Vietnamese e-wallet: Momo

Meanwhile, Chinese e-wallets are used only to a limited extent outside China. Alipay of Ant Group, an affiliate of Alibaba, is expanding its presence in the international market by buying stakes in foreign mobile payment platforms such as bKash (Bangladesh) or Tencent’s WeChat Pay, which have been licensed to operate in Indonesia since 2020. Alipay has also participated in Singapore, Vietnam, Hong Kong, and South Korea, as well as a number of countries in Europe and North America.

Overseas users of Chinese e-wallets are mainly Chinese tourists. Due to the epidemic, this group of people are unable to travel and spend, which hinders China’s fintech giants from further development in the Asian markets.

Loke Hwee Wong, Boku’s Vice President and General Manager in Asia-Pacific, said: “Southeast Asia is one of the fastest-digital regions in the world. In 2020, the region added 40 million new Internet users, bringing the total number of users to 400 million. The emerging consumption trends during the lockdown to control the epidemic have helped e-commerce become more popular, thus, the number of people using e-wallets is growing exponentially. ”

Thanh Duong. “Southeast Asia E-Wallets Boom.” VNEXPRESS, 2022, startup.vnexpress.net/tin-tuc/xu-huong/vi-dien-tu-dong-nam-a-bung-no-4307412.html. (Accessed Mar. 1, 2022)

Translated by: Pham Hoang Hung