Cash transaction rate across Asia expected to drop to 14% by 2027

The volume of cash transactions in Asia is expected to drop to an unprecedented low, approaching the level of cashless payments seen in developed regions such as Northern Europe. This shift is driven by several factors, including technological advancements and the increasing adoption of smartphones.

India, the world's most populous country, is leading the push toward a cashless economy, supported by its indigenous Unified Payments Interface (UPI) system. Launched in 2016, UPI has been a key initiative in India's efforts to reduce cash transactions. In 2023 alone, the system processed over 131 billion transactions.

In China, more than a billion people have adopted Alipay and other digital payment platforms. By 2027, cash transactions in mainland China are expected to account for only 3% of total transaction value, marking a significant shift toward cashless payments.

Meanwhile, Japan, Thailand, Indonesia, and Malaysia are gradually transitioning toward a cashless economy through the adoption of Central Bank Digital Currencies (CBDCs), stablecoins, and alternative payment systems.

This trend is spreading across Asia, with cash transaction rates in 14 countries and territories projected to drop from 47% in 2019 to just 14% in 2027—only slightly higher than Europe's 12%.

French consulting firm Capgemini forecasts that by 2028, the Asia-Pacific region will process up to 1.46 trillion cashless transactions annually—more than four times the volume in North America, where credit cards are widely used.

Globally, smartphone payments at retail stores are expected to account for 46% of transactions by 2027—more than double the 22% share of credit cards.

Additionally, Southeast Asian nations are actively collaborating in the digital payments sector, particularly through QR code transactions. Governments are not only promoting domestic cashless payments but also working toward real-time cross-border payment systems. For instance, users of PromptPay in Thailand and PayNow in Singapore can now transfer funds between the two countries seamlessly.

Similarly, Vietnam has successfully established cross-border QR code payment connectivity with Thailand, Cambodia, and Laos and is set to expand cooperation with other ASEAN and global partners. According to the State Bank of Vietnam, the country aims to accelerate digital banking efforts in major financial markets such as China, South Korea, Japan, and Singapore to enhance trade and cross-border economic integration.

As of 2024, Vietnam has over 200 million personal payment accounts—an increase of more than 50% year-on-year. Additionally, cashless transactions in Vietnam have surpassed 17 billion transactions, with a total value of approximately 280 quadrillion VND (a 120% increase in value compared to the previous year).

While contactless payment methods such as QR codes and NFC are gaining popularity, growing at an average rate of 6% per month, traditional payment methods (such as swipe and chip insert transactions) are declining by 2%–3% per month.

Under Decision No. 1813/QĐ-TTg, Vietnam aims to achieve a cashless payment value equivalent to 25 times its Gross Domestic Product (GDP) by the end of this year. The country also targets 80% of individuals aged 15 and above to have a transaction account at a bank or other authorized financial institution.

Source: vneconomy