How payment trends are set to evolve across Asia in 2023

The way we pay for goods and services is constantly evolving, and payment trends in Asia will only accelerate in 2023 as digital innovations are increasingly leveraged to offer ease and convenience to consumers in a competitive retail environment.

In 2023, we can expect to see even more changes in trends in the payments landscape across Asia as new technologies and consumer preferences enter. Here are some of the top payment trends to watch out for in Asia in 2023 and beyond.

Buy Now Pay Later (BNPL) will gain more popularity in Asia

For a while there, it really seemed like “buy now, pay later” (BNPL) options were seen as a financially inclusive alternative to credit or interest-heavy repayments. While valuations for some of the most notable global BNPLs have had to be reassessed in recent times, BNPL remains a popular source of alternative financing for online purchases in Asia, particularly among the younger and less banked segments of the regional population.

BNPL allows consumers to split the cost of a purchase into interest-free installments, making it a convenient and affordable way to shop. With more and more retailers and online marketplaces offers BNPL optionsis it likely that this payment method will still be relevant across Asia in 2023.

APAC e-commerce payment methods, Source: 2022 Global Payments Report by Worldpay from FIS

The BNPL payments industry in Asia Pacific is incredibly robust, with trends expected to pay off later grow by 45.3% annually to reach USD 201.9 billion by the end of 2022. The momentum is set to continue with BNPL operators expanding into new categories to drive growth amid increasing competition. Australia-based early adopter Afterpay, for example, was acquired by POS payment specialists Square and is now integrating BNPL options into Square’s retail solutions.

International players such as Klarna and Afterpay as well as regional ones like Atom invests in the China BNPL area, where cross-border e-commerce has flourished alongside the domestic e-commerce market. At the same time, Chinese BNPL companies are expected to expand across APAC in the coming years.

Cross-border payment bridges will make it easier to pay abroad

Speaking of cross-border, one of the biggest challenges of international travel is dealing with different currencies. When trying to make a purchase in foreign currency, travelers often have to rely on expensive and inconvenient methods such as currency conversion. However, this is set to change the emergence of cross-border payment bridges.

Cross-border payment bridges are platforms that allow users to link their bank account to a foreign account, allowing them to easily make and receive payments in different currencies. This will make it much easier (and cheaper) to shop abroad, and we can expect more companies to start offering products and services in more countries. Central banks and financial hubs in fast-growing Asian territories, such as Southeast Asia, are working together to create better payment links between their areas of operation, not only to facilitate payments, but to prepare for better cross-border trade, investment and other economic activities.

The bridges will also make it easier for people to send money to family and friends abroad, pay for goods and services, and make room for more cost-effective B2B payments. Cryptocurrency trading and cross-border fintech bridging agreements between countries can often offer a lot lower transaction rates as well as minor transaction issues, but have yet to reach the point of seamless real-time money transfers. Both incumbents and fintech startups are looking to disrupt this space, which can happen already in 2023

Personalized loyalty offers are becoming more crucial

Personalized loyalty offers are a great way to increase customer engagement and retention. With the right strategy, you can target customers with specific products or services that they are likely to be interested in.

There are a few things for businesses to keep in mind when developing a personal loyalty offer. The offer must be relevant to the customer, be easy to understand, and must be easy to redeem. Among the payment trends highlighted here, this one is growing fast access to customer data is exploding and is becoming common for companies to exploit when trying to differentiate themselves from the competition.

In a video interview with Fintech News Singapore, experts agree that hyper-personalization will be essential for financial services to remain relevant.



Data from McKinsey and Salesforce support that this will be the key for businesses to remain competitive in an age of digitization, with 71% of consumers expecting personalized experiences from companies they support. This will only increase in the future, as already three-quarters (74%) of Gen Z consumers demand personalized products or services.

Loyalty programs have always been a central part of retail, but in recent years we have seen a shift towards more personalization in these programs. Retailers use data to segment their customers and target them with specific offers which are tailored to their individual needs and preferences – making them that much more compelling as opposed to generalized offers.

Contactless payment trends will take off in 2023

The COVID-19 pandemic has drove a huge increase in the use of contactless payments, as consumers seek to minimize the risk of infection by using cash. This trend is set to continue in the months and years ahead as more and more businesses adopt contactless payment methods.

With the rise of mobile commerce and digital wallets, contactless payments are becoming more popular. In fact, a recent study found that nearly half of 3,000 consumers surveyed have used their smartphones to make in-store payments at Starbucks (49%), McDonald’s (43%) and Walmart (41%).

Besides app-based or digital wallet transactions, the majority of contactless payments will be powered by hardware that has near field communication (NFC) technology. This includes NFC-enabled smartphones and card terminals. But there are additional costs for merchants to purchase and set up NFC terminal infrastructure (POS), which is absent in ‘soft POS’ systems which are smart devices with NFC and payment data housed within.

Contactless mobile transactions are catches on as one of the dominant payment trends worldwide, with 782 million users in 2022. But this is expected to grow by almost 60% over the next two years to reach 1 billion global users by 2024,

There are many advantages to contactless payments, such as convenience, security and speed. However, there are also some disadvantages, e.g potential for fraud and lack of customer service.

Mobile will be the king among payment trends in 2023

As highlighted above, transactions made from a smartphone or tablet are one of the trends driven by consumer demand for increasingly contactless means of payment in 2023. Previously, most payments were made in cash or via cheque.

However, in recent years there has been one noticeable shift against electronic and mobile payment. This trend is only set to continue and it is important for businesses to be aware of the latest innovations in mobile payment technology.

These include the continued growth of mobile adoption increasing use of digital walletsthe aforementioned increase in contactless paymentsand the growth of payments in the app.

Mobile payments are becoming ubiquitous, with more and more people using their smart devices to make purchases. Juniper Research projects that smartphone penetration in Asia Pacific will exceed 99% by 2024, and even now, almost six out of 10 shoppers say the ability to make purchases via their mobile devices will be key to which retailers or platforms they will buy from.

Featured image credit: edited from Freepik