China leads global digital payments as market hits $4.7t in 2020

The country is expected to have 49% of the global share by 2023.

China is expected to remain dominant in the digital payments market and secure 49% of the global share by 2023, as the market’s transaction value is projected to skyrocket to a record $4.7t this year, according to financial research website LearnBonds.com.

With a 15.3% YoY growth rate, the market is expected to hit $6.7t (S$9.09t) in 2023.

E-commerce giant Alibaba and gaming firm Tencent utilised China’s high smartphone ownership rate and propelled a massive shift amongst the Chinese to digital payments, the report noted. Together with the United States, the two countries will account for nearly 70% of the global digital payments transaction value by 2023.

The United Kingdom placed third behind China and the US with $176b (S$239b) transaction value in 2020, followed by Japan with $173.1b (S$235b) and Germany with $127.4b (S$173b). Statistics indicate that this rank will remain the same over the next three years, LearnBonds said.

The global peer-to-peer (P2P) digital payments market is also booming, with the US having the biggest market globally anchored by apps such as Venmo, Zelle, and Square. The unified market is posed to grown at a compound annual growth rate (CAGR) of over 20% and hit a $381b value by 2022.

The Indian market is the fastest-growing P2P market globally with an average annual growth rate of over 72% from $10.5b in 2017 to $159.2b in 2022, the report said. The launch of government-owned instant real-time payment system Unified Payments Interface (UPI) in 2016 is one of the biggest drivers of the growth, LearnBonds added.