APAC payments industry remains attractive to investors: analyst

The industry recorded 29 deals in Q1 from only 23 in Q4.

Asia Pacific’s payment industry reported 29 deals in Q1, up from only 23 in Q4 2019, implying that the region remains attractive to venture financing (VF) despite slowdowns caused by the COVID-19 pandemic, according to a report by data and analytics firm GlobalData.

“With rapid digitalization, electronic payments tools are gaining prominence. This trend is more prevalent in emerging markets such as India and China, where a large number of consumers leapfrogged card payments by switching directly from cash to alternative payment methods,” noted Ravi Sharma, banking and payments lead analyst for GlobalData.

India attracted 48.3% of the VF payment deals in Q1 in the APAC region, followed by China with 17.2% of the deals.

Traditional payment companies are not to be left behind, however, and are noted for exploring new avenues in these countries. For example, Mastercard invested in Digiasia Bios, an Indonesian financial technology company that offers digital payment and peer-to-peer (P2P) lending services, in March 2020.

“The pandemic has accelerated a shift towards a cashless economy, increasing the demand for digital payments among consumers and businesses alike. As a result, the payments industry in APAC will continue to attract investments over the coming years,” concluded Sharma.

Globally, there were 89 deals recorded in the payments scene in Q1, unchanged from Q4 2019. However, total VF deals declined to 361 during the quarter from 389 deals recorded in the Q4 2019.