A boom in mobile payments is pushing a drive for cashless economies ahead in some South East Asian countries.
The springboard is easy access to technology and tech-savvy young populations without bank accounts in countries like Vietnam and Thailand.
Both nations are leading the way in electronic payments.
Fewer than half of Vietnam’s 95 million young adults have a bank account, so look elsewhere for paying for transactions – and for millions that means an e-wallet on a smartphone.
While millions do not have access to a bank, 120 million young adults in the country do have a smartphone.
Widespread acceptance in emerging markets
Financial and business consultancy PwC says cashless payments are surging to new records in Vietnam, which is ahead of any other South east Asian nation in the field.
Consumers use their smartphone wallets for almost two out of three transactions – a figure that has nearly doubled in a year.
“Mobile payment services also are gaining widespread acceptance, especially in emerging regions that have leapfrogged past landline-based telephone systems and gone straight to mobile and smartphones,” said PwC.
Thailand’s government wants to encourage cashless payments to help business grow and to crack down on bribery. Going digital would give businesses a trading history and deliver an audit trail for detecting corrupt payments.
Many Thais have no bank account or credit cards, so rely on paying their bills in cash.
Countries nearest to going cashless
Banks have been persuaded to cut fees for digital payments and consumers are urged to pay with their smartphones rather than with hard cash.
Countries in the region with healthier economies, such as Singapore and Malaysia have less penetration cashless solutions despite efforts by governments and banks to push digital transactions.
The government wants Singapore cash-free by 2025, but cash and cheques still account for 40% of financial transactions.
Elsewhere, says PwC, the countries closest to a cashless society are Belgium, Denmark, Sweden, Finland and Estonia
The company argues banks need to develop their cashless services to allow consumers to go digital – but the move is risky because the institutions could encourage customers to close their accounts.