More than half of all transactions in APAC could be cashless by 2022.
Global non-cash transaction volumes are growing by over 12% per annum and topped $482.6 billion in 2018. Emerging markets including Asia are growing almost twice as quickly and the Asia-Pacific region accounts for nearly half of global payments revenue compared to less than a quarter just six years earlier.
This shouldn’t come as a surprise, as Asia-Pacific accounts for over 60% of the world’s population and two-thirds of global transactions. Across the region, the growing popularity of alternative payments solutions, and digital commerce in general is fuelling the trend away from cash.
This shift is partly demographic. Millennials addiction to smartphones and online shopping, coupled with up-graded network bandwidth is driving mobile commerce across the region. By 2022 it is predicted that Asia-Pacific will account for 70% of all global payments, up to half of which will take place via mobile app.
Alternative payment methods
If cash is no longer kind, how are payments being made? Credit and debit card usage is still growing but that growth has been eroded by the adoption of contactless and real-time payments.
Contactless payments have already revolutionised how travel is bought and paid for. In London, half of all transit commutes are now contactless, Since being introduced to Vancouver’s transport system, contactless payments accounted for a million trips within two months.
The global eWallet market is growing furiously, accounting for 8.6% of global non-cash transactions. Alibaba, Tencent, Google, Facebook and Amazon have all captured significant market share. Mobile wallets dominate Chinese payments unlike anywhere else on the planet. Almost two-thirds of eCommerce spend in China is made through eWallets.
Digital currencies have also come onto the scene. Blockchain, an ever-growing database of transactions linked securely via cryptography is accessible yet secure. We expect more industries to join the Asian banking and finance sectors as adopters as the region’s spending on blockchain has doubled in the last year to $282 million.
Blockchain will not replace credit cards but can help verify the sending of card numbers during transactions. For multiple-party transactions such as those involving travel management companies (TMCs), airlines, and enterprises, blockchain enables all parties to work on the same ledger. This allows instant payment between TMCs and airlines, reduces customer costs and enhances customer satisfaction.
Impact on business travel
So what does cashless business travel mean for travel managers? The sheer size of the region’s business travel spend – expected to reach $900 billion by 2025 – means that the benefits of cashless payments could be significant for the sector.
For business travellers, contactless technology provides a secure experience that moves them from car to bus or train seamlessly. For their employers, the chore (and cost) of manually processing expense claims becomes unnecessary, travel spend becomes more visible and leakage is more easily tracked.
There are issues to be overcome though. Despite the rush to electronification of payments, the quality of business travel booking tools is poor compared to other regions. Inventory is often limited and local language support is missing.
The challenge for travel managers is to ensure that booking tools make compliance with company travel policy easier instead of harder. Currently, the shortcomings of existing tools encourage travellers to choose more expensive – but more reliable - options.
Next generation technology
To fill this gap, a number of venture-capital-backed starts ups are joining the established global payment providers like Mastercard, Visa and business travel payments specialists like Concur and AirPlus in developing smart solutions.
The new generation of business travel technology combines AI-driven personalisation with integrated expense management and a data-driven insights. Their functionality includes sourcing, booking and payment tools with itinerary management, travel delay, disruption and destination information. The user experience is the same, regardless of whether the application is desktop or mobile based and include sharing economy options too.
The real opportunity cashless travel presents to travel managers however, is to bring the estimated 90% of business travel spend by Asian companies under management.
Back in 2016, research found that business travellers across Asia want digitally enabled booking tools. They value the transparency of choice and information that autonomous digital booking channels provide. Even then, digital booking channels including company Online Booking Tools (OBTs) were 28% more popular than offline channels.
The mobile revolution has happened. Now, it’s up to travel managers to worth with their Travel Management Companies and external suppliers to invest in the new generation of business travel tools that will power Asia’s business community into the second half of the 21st century.
 World Payments Report 2018 – Capgemini/BNP Paribas
 Global payments 2018: A dynamic industry continues to break new ground – McKinsey & Company
 Asian Business Travellers: Five things you need to know – McKinsey & Company