Cash is rapidly disappearing from consumer transactions across Asia, giving way to QR codes and other smartphone-driven technologies.
This shift is fueled by the growing penetration of mobile devices, widespread internet access, and the convenience these payment methods offer. Governments and businesses alike are embracing this digital transformation, promoting cashless ecosystems to enhance efficiency and reduce transaction costs.
Key Insights
- Cash transactions in Asia are rapidly declining, with physical money expected to account for just 14% of total transactions by 2027, down from 47% in 2019.
- Efforts by countries like India and China to promote domestic digital payment systems and challenge Western credit card brands are accelerating the shift to cashless payments.
- The increasing use of smartphones is driving the adoption of cashless payments across Asia, making transactions easier and more accessible for consumers.
According to Worldpay, a U.S.-based payment processing company, physical money is projected to account for just 14% of total transactions by 2027, a sharp decline from approximately 47% in 2019. This shift highlights the rapid adoption of digital payment methods, driven by advancements in technology and changing consumer preferences. Mobile wallets, contactless payments, and online transactions are becoming increasingly dominant, reshaping the global financial landscape.
As a result, mobile wallets and digital payment platforms have become integral to daily life, from buying groceries to paying utility bills. This trend is not only reshaping consumer behavior but also driving financial inclusion, enabling previously unbanked populations to participate in the digital economy.
Domestic digital payment systems preferred
The move towards cashless payments is also being driven by efforts in India and other countries to promote domestic digital settlement systems while reducing the influence of Western credit card brands.
In Mumbai, for instance, motorcycle couriers deliver food and daily essentials swiftly, often within 10 minutes, with the entire transaction conducted through smartphones. Many of these services no longer accept cash.
The share of cash payments by value is expected to plummet to just 10% by 2027, down from 71% in 2019.
In 2016, the Indian government, in collaboration with financial institutions, introduced the Unified Payments Interface (UPI), a mobile payment system enabling real-time transactions.
This system powers app-based delivery services and other businesses. According to PwC India, more than 131 billion transactions were processed through UPI in fiscal year 2023.
In mainland China, where over 1 billion people use Alipay and other digital payment apps, cash transactions are expected to fall to just 3% by 2027. This shift highlights the rapid adoption of digital payment methods, driven by convenience, security, and widespread smartphone usage. As a result, traditional banking and cash-based transactions are steadily declining, signaling a transformative change in consumer behavior and financial ecosystems.
Douglas Feagin, president of Ant International, the operator of Alipay outside of China, stated that the company aims to expand its merchant network across Asia and other markets. Alipay is already accepted in over 10 million overseas stores.
The cashless trend is advancing rapidly across Asia. The average share of cash transactions in 14 countries and regions is expected to decrease by 33 percentage points, from 47% in 2019 to just 14% in 2027, slightly above Europe’s projected 12%.
Smartphones are spearheading the shift toward cashless payments throughout Asia
While cashless payments initially struggled to gain traction in Southeast Asia, where fewer people had bank accounts and limited credit card usage, smartphones have since transformed the landscape.
With just a phone number and a few additional details, transactions have become easier, enabling more people to go cashless.
Globally, the share of smartphone-based payments at storefronts is expected to reach 46% by 2027, more than double the 22% share of credit card payments.
Nationalism is also driving the cashless shift in Asia. Governments in India and China are promoting their payment networks to challenge international credit card giants like Visa and MasterCard, which charge transaction fees of several percent and collect large amounts of data from both cardholders and merchants.
In Southeast Asia, countries are collaborating on QR code-based digital payments. Users of Thailand’s PromptPay and Singapore’s PayNow can now transfer money between the two countries. Studies are underway to create a real-time, cross-border settlement system within the region.
