‘Massive potential’ in digital payments space, says SAC

SINGAPORE (Mar 19): SAC Advisors says the electronic payments landscape could be revolutionised in the next five to 10 years, as mobile payments become mainstream, blockchain technology starts to gain traction, and the Internet of Things (IoT) drives new payment methods.

“Over the last few years, we have seen a seismic wave of alternative payments platforms emerging, says analyst Terence Chua in a report on Monday.

“There are currently a few leading players in the digital payments space, and while there is constant debate over who will eventually be the ‘winner’, we view a single winner in this space as extremely unlikely,” he adds.

Instead, Chua believes that it is more likely that a wallet payments ecosystem that houses multiple players will emerge.

Among the current leaders in the digital payments space are PayPal, amazon Pay, Visa Checkout and MasterPass. Meanwhile, Chua opines that the smartphone players will also see wider adoption of their services – Apple Pay and Samsung Pay – in the future.

But it is in China, led by Tencent Holdings’ WeChat Pay and Alibaba Group Holdings’ AliPay, where mobile payments has taken off.

According to a report by China-based iResearch Consulting Group and US-based Forrester Research, China’s total mobile payments transactions ballooned to US$9 trillion ($11.9 trillion) in 2016, from US$15 billion in 2011. By 2020, this is expected to swell to US$47 trillion.

In comparison, total mobile payments transactions in the US stood at just US$112 billion in 2016, and is expected to grow to US$283 billion by 2020.

According to Chua, Tencent and Alibaba are now expanding their services globally to other Asian markets, from Indonesia to India.