Mobile phone payment popularity across Europe (Source: PostNord)
In 2020, the European Union launched the EU’s Digital Finance Strategy. This package includes a strategy and legislative proposals aimed at promoting a more digitalized payment landscape across the Union. It covers crypto-assets, digital resilience and seeks to build “a competitive EU financial sector that gives consumers access to innovative financial products while ensuring consumer protection and financial stability.”
- Since payment methods differ widely from country to country, it is important to really understand the nuances of each and every country in which you’re planning to expand.
- Digital wallets are predominant in Europe and are likely to grow rapidly in the coming years. This is especially true of mobile phone-based payments.
- If expanding into EU countries, be sure to keep an eye on any new strategies or legislation that might affect your business.
The Asia Pacific (APAC) region is home to 60 percent of the world’s population and includes massive markets such as China, India and Australia. It is a region with a stark digital divide as modernization and digitalization are growing rapidly on the one hand, while a large percentage of people remain limited in their access to basic financial services.
In China, the most popular payment method by far is through mobile phone applications. Perhaps the most popular are WeChat, a social network platform, and AliPay. In 2019, WeChat exceeded 1.15 billion monthly active users (MAU). Meanwhile, the daily averageof payments increased by 76 percent, and the average daily number of users increased by 70 percent.
According to a survey by GlobalData, Thailand is the top country in the world for mobile wallet usage, nearly 94 percent of survey respondents said they had a mobile wallet and had used it in the past 12 months.
Australia is also seeing a rise in digital wallet popularity. The Commonwealth Bank of Australia reported a 17percent increase in digital wallet usage during February and March 2020. This equates to triple its typical growth rate.
Cash is still very prevalent in some parts of the region despite taking a hit during the pandemic. In Japan, the government offered discounts to anyone who made retail purchases using non-cash methods. Despite this, cash is culturally significant in Japan. This includes Tansu Yokin, the practice of keeping large amounts of cash in drawers at home.
Over half of India’s population does not have access to digital connectivity, despite the country being the second-largest internet user base in the world. The lack of access is mostly common with people living in rural communities. Because of this, cash remains very popular throughout the subcontinent. The Reserve Bank of India found that most people prefer cash since it is a more reliable payment method in places without an internet connection. They also reported higher levels of digital unfamiliarity. It is predicted that cash demand in India will grow 23 percent by 2025.
- As in Europe, payment landscapes across APAC vary greatly from country to country. There is also great variation between big cities, suburbs and potentially rural target markets.
- You cannot ignore app-based payments like WeChat or AliPay, especially if you plan to do business in any big city across Asia.
Middle East and Africa
The MEA economies have been changing rapidly even prior to the pandemic. The events of 2020 just accelerated many of them. Cash is still the most popular payment in both POS and e-commerce purchases, but things are changing fast. E-commerce has been particularly slow to develop in this region, but, as happened everywhere else, the need for things like groceries during lockdowns caused quite the shift. There are increasing numbers of homegrown e-com services competing for what the future has in store.
MEA is considered to be one of the smallest card markets in the world. That said, cards are projected to grow rapidly there in the coming years based on increasing familiarity and popularity.
QR code payments are also on the rise, particularly as governments of countries like Saudi Arabia and Ghana have introduced unified QR code payment systems to facilitate this and to promote greater transparency. In line with an emerging global trend, digital payments and wallets are also rapidly increasing in popularity. In the Middle East, 58 percent of consumers see it as a preferred payment method.