Summary:
A comparison between emerging economies across different geographical regions and high-income economies reveals the colossal magnitude of the digital payments revolution. The closer the economies are to the top-left corner, the stronger their growth in digital payments usage between 2014 and 2021. The concentration of high-income countries in the top-right corner reflects a well-established digital payments regime. Emerging economies, on the other hand, displayed strong improvements in digital payment adoption over the years.
Highlights:
- Regionally, the Asian developing economies have shown the strongest growth in digital payments. With adoption rates ranging between 2-20% in 2014, some economies were able to more than double their adoption rates by 2021. Among the ASEAN emerging economies, the percentage of people using digital payments almost doubled in Thailand, Malaysia, the Philippines, and Myanmar.
- China’s digital payment revolution rests on two payment systems – QR codes and digital wallets. These systems are driven by China’s biggest tech firms Alibaba (running Alipay) and Tencent (running WeChat Pay). Unleashing the power of network incentives, they have replaced cash and leap-frogged card payment system with over a billion users on each platform.[1]
- Among high-income Asian countries, Singapore is in the top right corner with other mature real-time payments markets. The country has one of the most advanced payment systems in the world. The payments innovation, originally led by incumbent banks, has since witnessed participation from tech giants such as Grab (running GrabPay). [2]
Article By Shubhangi Gupta
Graphic By Yixuan GE
[1] https://www.brookings.edu/research/chinas-digital-payments-revolution/
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