The heavy selling in the top cryptocurrencies (dubbed as 'crypto winter') has affected many companies in the field. Celsius halted withdrawals for almost 3 weeks, Three Arrows Capital (3AC) and Voyager Digital Holdings both filed for bankruptcy , job cuts and more.
With a potentially new covid-10 vaccine-resistant strain, how is the payments industry reacting to these changes?
Visa recently published the annual Visa Consumer Payment Attitudes Study with some interesting findings. The study focused on the Asian payments sector.
Due to covid-19, digital payments have accelerated. According to the study, Southeast Asia is expected to reach $1 trillion by 2030. Consumers said that they will use cashless payments more often (77% according to the survey).
The use of Buy Now Pay Later (BNPL) solutions is gaining more interest (63%). According to Stripe, "businesses that accept buy now, pay later services on Stripe have seen a 27% incremental uplift in sales volume."
A different survey found that millennial and Gen Z use BNPL more often than other generations. 15% of millennials and 5.7% of Gen Z used BNPL in-store compared to 3% of older generations.
For online shopping, 26% of millennials and 11% of Gen Z (approx.) used BNPL compared to only 7.5% of older generations.
Digital Payments in Asia
According to the study, 93% of consumers are using cashless payments. Singapore and Malaysia are leading the Asian countries in cashless payments.
source: visa
BNPL is most common in Thailand with nearly 41% of consumers using it more than twice in 2021. Consumers were asked what is their concern with BNPL: 51% responded with high-interest rates and 41% were concerned with their ability to pay in full.
Some interest was also seen in biometric payments. In May 2022, MasterCard announced it is piloting payments using facial recognition or palm of the hand recognition.
The biometric program is already live in some of St Marche grocery stores in Sao Paulo, Brazil. A study by Jupiter Research shows that approximately 1.4 billion people will use biometrics for payments by 2025.
According to Jupiter Research, "the value of biometrically authenticated remote mobile payments will reach $1.2 trillion globally by 2027; rising from $332 billion in 2022."
When asked about biometrics for payments, Visa's study shows there is some interest in payments via fingerprints but voice recognition and retina scans have less interest.
source: visa
While the majority of the study's participants found that biometrics payments are more convenient, many are concerned with securing the data. Consumers are more accustomed to fingerprint scans due to smartphones.
Ajay Bhalla, Mastercard’s president of cyber and intelligence said: “All the research that we’ve done has told us that consumers love biometrics. They want to make a payment at a store to be as convenient as opening their phone."
The interest in cryptocurrencies remains elevated, which is led by Thailand.
Payments Trends in 2022
We are at the very beginning of the digital era. The traditional ticketing system that is used for flights, public transport, events etc. will be replaced with non-fungible tokens (NFTs).
The world is heading towards cashless payments. Despite the crypto winter, businesses can still accept stablecoins that are backed by physical assets (as opposed to algorithmic stablecoins that have some risks as seen in Terra and USDD).
Since covid-19, Asian consumers are more inclined to order online than to physically shop at the mall.
Digital identity platforms such as NDID, which is used in Thailand, will be in high demand. Securing digital identities may create a market for security firms to step in.
