It is undeniable that cryptocurrencies are slowly becoming a vital part of the world’s conventional economy. Throughout the world, consumers are showing increased interest in digital currencies. The number of blockchain wallet users has been growing rapidly. North America and Europe provide an estimated 81% of wallets we have today. However, only 61% of wallet users are located in these two regions. With over 100 million users, the USA is leading the adoption of digital wallets. Similarly, many Europeans are swapping conventional banking and payment methods for more sophisticated digital wallets. The most widely used wallets in the USA include: the Google Wallet, Apple Pay, Venmo, and Massbook. Digital wallets are evidently gaining traction and shaking up conventional banking by allowing transfers of money between different parties at much faster speeds, which are often cheaper and sometimes free of charge as well, not to mention being extremely convenient and flexible. In 2016, digital wallet transactions were valued at $594 billion and are expected to reach $3.1 trillion by 2022.

Michelle Hutchison, a money expert, says “Traditionally, banks have charged high fees for transferring money from your bank account to other people. But payment apps allow you to sidestep those fees by removing the bank as the middleman. For instance, major banks may charge up to $10 in next-day transfer fees, compared to digital provider Venmo, which offers one-day transfers without incurring transaction fees.”

Millennials are leading the quest for digital wallets. At 64%, they pretty much appear to be spearheading the adoption of digital wallets. The digital paper trail is enhancing the payment experience, making it even easier for friends to contribute for drinks at a café, for example, or other payments. Among the millennials, the leading users of these wallets are the more educated lot that boasts high incomes. Men are also found to make use of these wallets more frequently than women.

The switch to digital wallets is largely driven by three factors:

  1. Transfer of money is a walk in the park: you won’t have to worry about having the same bank. Most digital wallets enable you to send or receive money for free at any time of the day.
  2. You don’t have to keep track of what you owe: digital wallets enable you to charge people in real time. Money requests can be sent immediately and exchanges done within no time.
  3. Digital wallets enable you to streamline your charges and make payments directly through your service. This saves you the need to carry wallets full of credit and debit cards.

Let’s take a look at how digital wallets are being adopted, especially in Asia.

Summary Of Digital Wallets By Country

Malaysia

Malaysia seems to be following in the footsteps of neighboring Singapore and the Netherlands towards achieving a cashless society by 2050. Digital payments have mushroomed across the country. A study done by Nielsen found that 34% of Malaysians use their mobile devices to make payments. The country’s Youth and Sports Minister, Khairy Jamaluddin, says the country cannot run away from how its people will make payments in the future, adding that “it will have to be cashless and contactless.”

Indonesia

According to Indonesia’s Information Minister, the government is targeting $130 million in electronic payments by 2020. This has seen several banks, telcos, government agencies, and fintech startups scramble to lead the shift of over 320 million people away from cash. Although Indonesia’s adoption is relatively low, 91% of the population own mobile phones – 47% of which are payment-ready smartphones.

Myanmar

In Myanmar, 80% of mobile users have smartphones, yet only close to 6% of the population makes use of the formal financial institutions. This makes Myanmar quite ripe for digital payments. Digital payments will spur financial inclusion among millions of the unbanked population. A notable service provider is OK Dollar, operated by Super Group. OK Dollar has come to the aid of those transferring payments to unbanked recipients. “I use it to transfer money to my parents, who are living in the Ayeyarwaddy region” said Said Sandar – an elated supermarket attendant.

Bangladesh

The huge rural populations of Bangladesh are still heavily reliant on cash. However, the growth of ecommerce is underpinning the uptake of digital wallets. Also, the use of smartphones is remarkably high in Bangladesh, a key factor that gears it up for digital transformation. Internet penetration stands at 65 million while the entire population is 170 million. Seemingly, the country has a long way to go in terms of digital payments.

South Korea

South Korea is also pushing for a cashless society. By mid 2017, only 20% of payments were made through cash. Digital wallets have seen remarkable growth in South Korea. For instance, Samsung Pay hit $12 billion in accumulated transactions since 2015. Several other wallet providers have hit at least $1 billion in accumulated transactions just years into their launches. South Korean researcher – Kim Seong Hoon – says the country could save a lot by going cashless and added that this will lead to “1.2 per cent extra economic growth a year.

Hong Kong

According to Google, Hong Kong’s “Think 2020: Smarter Digital City” white paper, says that an estimated 42% of Hong Kong residents utilize digital services such as mobile banking. Despite its low digital payment adoption rate, major players like Alibaba affiliate Ant Financial and Tencent introduced their mobile wallets. 56% of smartphone users in the country have used contactless payment services, while 33% of smartphone users have conducted P2P mobile transfer services. Alipay and WeChat are the country’s most popular e-wallets. However, consumers are expected to further its adoption once acceptance among merchants rises.  

India

India is witnessing a huge digital payments boom. This follows the government’s 2016 decision to eliminate high-value banknotes. The implementation of computerized identities by launching a new biometric identity card created an exceptional environment for the growth of digital wallets. India has a long list of cashless payment platforms including Tez, which was launched by Google. Indian officials project an 80% increase in digital transaction value between 2017-18.

Japan

Japan is among the countries in the forefront of digital currency adoption. Electronic money is also growing exponentially in Japan although it still lags in terms of digital payments – only 20% of the country’s payments are cashless. Japan’s digital payments were estimated at $70 billion at the end of 2017. The main setback to adoption is the high value and trust placed by Japanese on its cash, making them quite skeptical towards ‘invisible’ payment systems.

China

In 2016, China’s mobile market hit $1.83 trillion, from $31.7 million in 2012. Electronic wallets account for almost 58% of the country’s mobile payment market – the highest percentage worldwide. Wallets based on QR Codes and NFC technologies are the most common platforms in China. WeChat is still a major player in the Chinese digital market. Digital payments will likely continue being a dominant part of China’s economy.

Australia

Australia is currently ranked number four for cashless transactions per capita, behind South Korea, Denmark, and the US. Many Australian banks have shown support for digital payment technologies. However, they are not all there yet. Apple pay is the most widely used digital wallet. Other notable wallets include Samsung Pay and Android. In 2015, digital payments stood at $9.6 billion, up from $8.7 billion in 2014. However, there is a lot of potential for further growth, as cash remains in the mainstream.

As cryptocurrency adoption accelerates the world over, so does the uptake of digital wallets. In the US, 32% of consumers have digital wallets, while 78% of the overall population is aware of its existence. Even with a massive uptake, digital wallets are yet to reach the tipping point. We will likely see continued replacement of the conventional payment methods as wallets continue advancing to meet critical user requirements.

Wallets are one of the most interesting financial tools of our time. As time progresses, consumers are constantly seeking more superior digital wallets that can ensure the safety and security of their digital assets. Blockchains.my (BCMY) is a digital wallet developed using cutting-edge technology to guarantee the safety of your digital assets. It is a unique decentralized wallet developed using blockchain technology, mobile wallets, and a sophisticated biometric identification system. This alleviates the security risk which is the main issue associated with digital wallets.  Blockchains.my is safe, secure, user-friendly, mobile wallet app, and it’s equipped with every feature you’d expect from a top-notch digital wallet, and more.

Note: the information in this article is for informational and entertainment purposes only, and may or may not be entirely accurate.

 


References:

https://asia.nikkei.com/Business/Trends/Mobile-money-flourishing-in-Myanmar
https://futurestartup.com/2016/12/27/the-state-of-digital-payment-in-bangladesh/
http://www.nationmultimedia.com/detail/Startup_and_IT/30324761
http://www.scmp.com/comment/article/2111500/why-use-digital-payments-hong-kong-when-cash-quick-and-easy
https://govinsider.asia/digital-gov/five-countries-to-watch-for-e-payments/
https://www.forbes.com/sites/haroldstark/2018/01/03/digital-wallets-have-come-to-rescue-asias-unbanked-population/#1999fb566682