COVID Digitising Payments

Singapore, Sept 5: The pandemic has brought many changes to our lives but in the business world, the most evident one would be the transition towards digital payments. 
WadzPay Blockchain Marketing Vice President Stas Madorski (pictured above) said the move towards a cashless society contributed towards a digital payments segment that is projected to reach US$2.9 trillion this year in Asia alone – which is the market-dominating global growth and commanding over 50 per cent of global digital payments.
“Mobile payments drove 1.2 trillion in transactions in Asia last year and are projected to reach an astounding 2.1 trillion transactions by 2024,” he said in an informative paper published by the company, recently.
“This represents a US$1.2 trillion gap and opportunity for WadzPay in the next three years.”
Mordorski said South East Asia dominates digital currency ownership globally with Vietnam leading the pack, followed by  Indonesia (#2), Malaysia (#4), Philippines (#5), having the highest per capita ownership in the world and it is a key market within the region. 
Mordoski also noted that despite one in three Indonesians being underbanked, it did not stop them from owning digital currencies.
“One in nine Indonesians own a digital currency, spurred by the deflationary Indonesian Rupiah (IDR) fiat currency and the opportunity to access financial services,” he said. 
He added that the estimated 1.7 billion adults in the world mostly who are from Asia and the Middle East remain unbanked and don’t have enough access to financial institutions with more than 64 percent of the payments still transacted in cash, with the pandemic driving preference towards digital payments and bringing existing fiat into the payments grid.
He said fintech and blockchain through the increased awareness of digital currencies, stablecoins (privately-issued cryptographic digital currencies pegged to a physical or stable store of value) and Central Bank Digital Currencies (CBDC) are bringing about the next evolution of payments. 
“As of today, digital assets have an estimated US$2 trillion market cap but acceptance and use-ability have not yet been unlocked. 
“Global consensus from governments, stakeholders, corporates and the unbanked directs that digital assets are expected to continue to grow and be the norm of the future. 
“The move towards cashless societies contributes towards a digital payments segment valued at US$5.4 trillion last year and is expected to grow by 27 per cent this year,” he added.
Another reason why digital payments were on the rise was because of the number of websites and mobile applications that are using such transactions, and the evolving payment landscape, e-Commerce has flourished and thrived. 
Since 2001, with recorded sales of about  US$550 billion, retail e-Commerce has burgeoned into a US$4.3 trillion behemoth tripling from just a mere five years ago. 
Further continuous growth from e-commerce is expected to hit US$5.3 trillion this year and is projected to exceed US$6.3 trillion in the next three years. 
Global retail revenue has been growing five per cent annually, reaching US$25 trillion last year and is expected to grow by over seven per cent this year.
At present,  17 per cent of global retail revenues comes from e-Commerce. 
With the continued gloom of COVID, financial and technological accessibility of the world, we will see the continued transition of retail revenues to e-commerce. 
While retail revenue dipped 5.7 per cent during the pandemic, e-Commerce continued its growth by 13 per cent for this year and will remain on this course for the foreseeable future.
He also said that governments and regulators have in recent years, recognised the importance of digital currencies – stablecoins, CBDCs as well as the relevance of blockchain to revolutionise antiquated banking and payment systems. 
Blockchain is now legally recognised along with SWIFT and ACH (an Ethereum token that powers Alchemy Pay) for transaction processing and settlements. 
“Even Mastercard, Visa, PayPal and many others have openly announced plans to allow settlements in digital currencies in the later part of the year. 
“They are embracing the consumer movement towards e-Commerce, as well as the desire to leapfrog traditional banking and financial systems,” he added. 

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