#Asia Why physical wallets might become extinct in Asia in 2017


M-payments in Asia is expected to grow from US$85M in 2012 to US$163.6M in 2016, which means the field of m-wallet is wide open for the taking, says the author

In today’s digitised world, paying for goods and services has increasingly moved from cash to cashless. In this post, I would like to explore the potential for mobile payments particularly as smartphones gain widespread adoption, all over the world.

Market potential and profitability

As you can see from the above chart, Cisco measured the growth of mobile traffic for different devices from 2012 to expected growth to 2017. Smartphones (in dark blue) had the greatest growth over the six years.

This will translate into increased demand for mobile payment across the world and Asia is leading the charge.

Mobile payments in Asia is expected to grow from US$85 million in 2012 to US$163.6 million in 2016. They require the building of the mobile application, gathering of users and businesses which are highly capital intensive. Any business that wants to enter the mobile payment space to tap this potential would have to go through the three phases as seen below.

It is only after it gathered enough critical mass would the mobile payment platform be profitable. Studies done by the International Telecommunication Union in November 2014 expects these providers to be profitable after three years.

Image Credit: ITU

For companies with deep pockets, they are willing to spend millions of capital expenditure to build up the infrastructure and acquire agents such as merchants to sign on to their network. McKinsey conducted a survey in the Philippines which showed that the general public is aware of mobile money, but they are very much unwilling to use it.

Hence, the potential for mobile payment remains large and untapped.

Also Read: Are mobile wallets the future of Asian economy?

Mobile payment works on Near Field Communication (NFC) devices that are embedded in the phone. The source of cash could be your credit or debit card that you enter into your mobile. The NFC will be authenticated with your fingerprint and the phone unlocking pattern.

These are the three leading mobile payment platforms despite the expected rapid growth of the industry.

1. Apple Pay

2. Samsung Pay

3. Android Pay

Apple Pay

Image Credit: Apple

Apple Pay is automatically installed in all iPhones 6 and above and can be used for iPad and Apple Watch. The unique feature about Apple Pay is its security where your card information is not sent to the retailer when you make a purchase. Instead, Apple Pay creates a one-time unique number for the retailer that they can access to receive payment. This minimises the possibility of fraud.

Apple had first-mover advantage when its CEO Tim Cook announced the launch on September 9, 2014. Apple Pay had signed up leading physical retailers such as MacDonalds, Lego and Macy’s and online apps such as Uber, Airbnb and Groupon for its payment platform.

Currently, Apple Pay is available in the US, the UK, Canada and Australia.

Apple Pay is most thoroughly accepted in the US across major and minor banks including Citibank, Peoplesbank and more. It is followed by the UK with HSBC and RBS on board. For Canada and Australia, you must have an American Express card to join the Apple Pay revolution.

Apple Pay has also announced that it will partner with Union Pay to invade the Chinese market in 2016. This is not an exclusive partnership as Union Pay will also work with Samsung Pay. In addition, Apple announced on October 28 that it will enter the Singapore market by 2016.

Samsung Pay

Image Credit: Samsung

Samsung Pay does not provide a depth of privacy to its users as compared to Apple, and it is available only on Galaxy S6 devices. In other ways to entice the public to join, it had offered a US$50 Best Buy e-Gift Card if they signed up by December 31.

Currently, Samsung Pay is only available in the US and Korea.

As mentioned, it is also invading the Chinese market next year with Apple. Samsung Pay users have a smaller list of US banks that accept it. Samsung Pay has an advantage in Korea where there are more retailers that are willing to accept Samsung Pay.

Samsung is not about to let its arch-rival Apple steal the thunder from it. Less than three months after Apple’s announcement, Samsung declared its intention on January 5, 2016 to contest the Singapore market in the coming months.

Android Pay

Android Pay is the open source e-wallet created by Google. You still need to have your NFC-enabled device and credit card ready to use it. The distinguishing factor is that it is widely available accepted by over one million retailers and online apps.

Image Credit: Android

Android Pay is relatively new as it launched on September 11, 2015. Currently, it is only available in the US. Google has plans to expand Android Pay to Australia in 2016.

After Apple Pay and Samsung Pay declared their intention to enter Singapore’s market, all eyes are on Android Pay’s next move. Singapore is the launch pad to Asia and it is unlikely that Google will allow its rivals to get too far ahead of it.

Singapore is fertile ground

As you can see, none of these e-wallets have expanded to Singapore yet. So banks and carriers in Singapore have had to improvise. For example, Standard Chartered Bank and Singtel teamed up to create Dash and it is an e-wallet that can be used for payment in NTUC Fairprice and Cheers outlets. Dash is also offering five per cent cashback for its purchase usage.

DBS created PayLah! DBS created Paylah! which has been accepted by online retailers Qoo10, Busticketonline and 32 other businesses and 21 charities. It is also available on Apple and Android devices. Paylah! is open to non-DBS/POSB users who have a bank account that accept FAST (Fast and secure transfer) transfers to accept mobile cash transfer.

Also Read: What is stopping you from making mobile payments?


Mobile payment is only now starting to gain momentum globally. Apple Pay is the leading m-wallet platform today, with Samsung Pay and Android Pay right behind. M-wallet payments will also allow users to keep track of their expenses more effectively and budget without hassle.

In Singapore, we have Dash and PayLah!, but their usage is limited to a small group of retailers. However, the convenience and security of mobile payment will make it a universal payment method going forward.

It is likely that, by 2017, mobile payment will become a mainstream form of payment like our EZ-link card or Visa Paywave. Apple and Samsung have already committed to Singapore and, given their marketing muscle, physical wallets might soon be extinct.

The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, please send us an email at writers[at]e27[dot]co

The post Why physical wallets might become extinct in Asia in 2017 appeared first on e27.

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