Market Trends of Third Party Payment Industry
Mobile Witness Major Growth
- The advancement of information technology has led to a growing number of end users, such as those in retail and e-commerce, collaborating with third-party payment platforms (3PPs) to offer mobile payment services to consumers. The integration of 3PPs into supply chains not only alters cash flow dynamics but also reduces consumer price sensitivity and enhances demand by promoting credit-based purchases. Mobile payment solutions enable the seamless acceptance of payments for goods or services at any location, utilizing mobile point-of-sale systems or devices such as smartphones and tablets.
- Mobile third-party payment systems have gained significant popularity for facilitating in-person customer transactions, primarily due to their security, efficiency, and convenience. In recent years, the ongoing advancement of the Internet and the widespread adoption of smart mobile devices have significantly transformed individuals' lifestyles and entertainment preferences. The rise and evolution of third-party mobile payment solutions are among the key factors contributing to these changes. As third-party mobile payment continues to evolve, the determinants influencing users' willingness to adopt these payment methods will also undergo continuous updates.
- The rise in internet access and smartphone usage has been instrumental in enhancing the digital landscape in India. A report from the Internet and Mobile Association of India projects that the number of Internet users in the country will approach 800 million by 2023. This surge in internet connectivity is anticipated to contribute to a corresponding increase in mobile wallet users, which is expected to reach 900 million by 2025.
- GSMA said that by the end of 2023, 5.6 billion individuals, or 69% of the global population, had subscribed to a mobile service. This marks an increase of 1.6 billion since 2015. The expansion of mobile internet usage has been even more pronounced. By the end of 2023, 58% of the global population utilized mobile internet, amounting to 4.7 billion users, which represents a rise of 2.1 billion since 2015. Moreover, it said that by the end of 2023, the number of 5G connections reached 1.6 billion, and it is projected to increase to 5.5 billion by the year 2030. Such significant growth in mobile internet connectivity will drive the potential of the third-party payment market.
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Asia-Pacific Witness Major Growth
- Technological innovations, regulatory shifts, and changing consumer preferences are reshaping the payment landscape in the Asia-Pacific region.
- According to the Global Payments Report 2024, published by Worldpay in March 2024, Chinese companies such as Alipay and WeChat Pay, along with Malaysia's GrabPay, command a dominant position in Singapore's e-wallet market, collectively holding an impressive 35.3% market share. However, it's worth noting that Indonesia's GoPay, developed by Gojek, is also a significant player. In a strategic move, PayPal, a wallet with a truly global presence, announced its acquisition of GoPay in December 2023.
- These payment platforms seamlessly integrate financial services, e-commerce, and daily utilities, forming an ecosystem that addresses diverse consumer needs. E-wallets, prevalent in various Asian regions, provide tourists and local vendors on even the most remote Thai and Vietnamese islands with alternative payment options, such as PromptPay and MoMo. Furthermore, mobile payment methods have been revolutionary, especially in promoting financial inclusion for the unbanked.
- Additionally, countries like China and India are increasingly embracing mobile wallets for digital payments, fueling significant growth in the Asia-Pacific market. Widespread mobile device usage, a robust digital infrastructure, and the rising popularity of applications propel the rapid expansion of digital/mobile wallets in the Asia-Pacific region.
- Banks in the region are collaborating with third-party payment service providers to facilitate secure transactions and support the tourism industry. For instance, in June 2024, owing to a collaboration between Khan Bank, Mongolia's premier full-service bank, and Alipay+, a suite of cross-border mobile payment solutions by Ant International, users of 12 popular overseas e-wallets from eight countries and regions can now seamlessly make digital mobile payments in Mongolia.
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