More than 70 percent of southeast Asia’s 600 million consumers do not use bank financial services, 30 percent higher than the global average.
Mobile payment providers see the Southeast Asian market as a gold mine, and the E-commerce market in the region is expected to reach $88 billion trillion by 2025.
But there are many challenges to promoting mobile payments, and many consumers are less receptive and less trusting of mobile payments and prefer to use cash.
According to IDC, a market research firm, about 44% of the total E-commerce transactions in Southeast Asia were paid in cash in 2017, and the agency predicts that cash payments will remain the most popular form of payment for the next 3 years.
South East Asia car rental service company Grab has launched the electronic wallet business, trying to preempt the mobile payment market, the biggest challenge of promoting cashless payment is that cash is ubiquitous, easy to use and cheap to use.
For a market that is still in its early stages of development, there is a chance for all participants to become leaders.
Companies from different industries have launched mobile payment services, in addition to car rental companies Grab, Go-jek launched mobile payment services, Japan’s Instant messaging service line launched Line Pay, Vietnam M_service Company launched the MOMO Electronic Wallet, the Philippines Voyager in Novations launched the Paymaya, gaming company Razer also eyeing the Southeast Asian mobile payment market.
Lazada alibaba’s electronics company also push in mobile payment, because a large number of customers to use cash payments must choose cash on delivery, if the arrival of the goods when the customer does not have enough cash or goods, goods won’t be sent back to the seller, the increased electric business platform of logistics costs, cash payment against the development of electrical business.
In order to break the user’s cash payment habits, Grab is creating more daily use scenarios for cashless payments, and transportation, catering and other services can be paid with grabpay electronic wallets.
Every company that launches the mobile payment service wants to build the network financial service platform with the service as its core, providing the clients with various financial services such as loan, insurance and financial management.
The particularity of the Southeast Asian market makes the promotion of no cash payment extremely difficult, the most successful case of mobile payment is in China.
China USES Alipay and WeChat payments in some big cities and can spend almost no cash at all.
However, the penetration rate of banking services in southeast Asia market is not high. Consumers lack trust in financial institutions and even need to transfer accounts in different places.
At the same time, some Southeast Asian market network access speed is slow, this is the mobile payment in the promotion process needs to face the challenge.