Voice of the Industry

Why localisation is the key to unlocking long-term growth in APAC

Wednesday 8 June 2022 10:51 CET | Editor: Irina Ionescu | Voice of the industry

Kristian Gjerding, CEO of CellPoint Digital, explains how understanding the diverse financial habits and consumer preferences across Asia-Pacific can help create relevant checkout experiences. 


Across Asia-Pacific, the buzz around alternative payment methods has increased exponentially. Some recently released research contains interesting findings for any business seeking insights into the financial habits and payment method preferences of consumers in seven APAC countries (India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, and Thailand.)

The research findings, which include frequency of purchases through online and brick-and-mortar channels, consumers’ attitudes to new financial and payment technologies, and payment method preferences, point towards an increase in alternative payment methods (APMs). However, each APAC country differs greatly, and creating truly frictionless payment experiences means understanding these differences. Merchants must be prepared to tailor the experience, determining which solutions will make the biggest splash in each market. 

Unpacking APAC: markets on the move

It is fair to say there is strong growth in digital payment adoption across the board in APAC. Reviewing the research findings by country, however, reveals a more complex picture.  

International spending, for example, differs greatly. In Singapore, 60% of people shop cross-border. In South Korea, it’s 50.4% of consumers, while in Thailand 50% of respondents prefer international shopping. In India, cross-border spending makes up 74% of total ecommerce sales. This contrasts with Indonesia, where only 4% of people have credit international credit cards and often possess pre-set debit cards that disable online payments in order to prevent fraud.

A standout finding, however, is the burgeoning appetite for innovation and new technologies in developing markets. This, in fact, is higher than in other APAC markets. 

Some statistics challenge Western assumptions about how digitally savvy consumers in APAC are – and we should welcome this opportunity to remove such biases as we prepare solutions for these markets. For example, only 37% of consumers in Japan would say they are ‘tech savvy’ or ‘looking for smart solutions.’ This rises to at least 70% of consumers across Malaysia, India, Thailand, and Indonesia. 

This is perhaps more astonishing given the fact that smartphone penetration and Internet connectivity remain higher in developed APAC countries. Smartphone penetration is at 22% in India, while Internet penetration is at 50%. In Japan, smartphone penetration is at 46.8%, while Internet penetration has reached 90%. 

A new path for emerging economies

At least one more general statement can be applied to consumers’ payment preferences across the APAC region: there has been a dramatic shift towards e-wallets and bank transfers, which has likely been driven by the pandemic. Even in a card-preferring market like Singapore, e-wallets and bank transfers such as PayNow are preferred by 42% of consumers. 

In India, though Visa credit cards remain a popular payment method, with 83% of people noting they used in the month before being surveyed, it has been outpaced by Paytm. Paytm is a digital/mobile wallet which was used by 85% of the surveyed Indian population, which makes it the country’s most popular payment method. 

Similarly, in Indonesia, e-wallet OVO was the most popular payment method at 69%, with debit cards in second place at 67%. In Japan, credit cards remain the most popular payment method, while e-wallet Paypay ranks as the country’s fourth most popular. Cash over the counter, such as Konbini, is strongly preferred and ranks second. 

This points to the revelation that more developed countries, which adopted cards long ago, have been slower in the adoption of APMs. Emerging economies are doing something new; they are bypassing the cards stage altogether in favour of finding other ways to pay online and embracing APMs. Remember – these are the countries where respondents said they were hungry for innovation.

What does this mean for merchants?

Clearly, a blanket approach to payment solutions for APAC consumers can never work. Merchants are presented with a potential quagmire of APMs in active use across the region, and the costly challenge of integrating these. Payment orchestration is a vital piece of the puzzle. According to PYMNTs, the global market for payment orchestration platforms is also expected to grow 20% every year between 2021 and 2026.

Merchants may be staggered to learn, or already painfully aware, that 44% of consumers abandon a purchase if their favourite payment method isn’t available, which increases to 51% for Millennials

As this research confirms that across APAC nearly all consumers (94%) would consider using an APM in 2022, a deep understanding of the diversity of consumer preferences is crucial for supporting merchants to create tailored payment systems. Through integrating the most relevant APMs for a given market, payment orchestration can dramatically improve the customer experience, increasing brand loyalty and conversions, and allowing merchants to succeed in every region.


About Kristian Gjerding

Kristian Gjerding is CEO of CellPoint Digital and held leadership positions at Network Appliance and Sun Microsystems before co-founding CellPoint. A skilled payment and commerce orchestration professional, he has a background in business-critical technology as well as Payment Orchestration Platforms and is a frequent speaker at airline, financial service and retail events.


About CellPoint Digital 

CellPoint Digital is a fintech leader in payment orchestration. Its main solution, Velocity, is a Payment Orchestration Platform that optimises digital payment transactions and accelerates the deployment of new payment options. Merchants can easily scale their own payment ecosystem across the world, unify the customer payment experience across their website, mobile apps, and other channels, optimize the routing of each transaction, increase conversion rates, and minimise payment costs.

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Keywords: ecommerce, ecommerce platform, online payments, local payment method, digital payments, digital wallet
Categories: Payments & Commerce
Countries: Asia, Australia, Oceania, Pacific
This article is part of category

Payments & Commerce