Capgemini and RBC Wealth Management recent World Wealth Report revealed the Asian-Pacific region became home to the most high-net wealth individuals, or HWNI, in the world. The finding marks an emerging shift in wealth for the first time ever. North America is now second to Asia, and with current and future demographic factors including population size and economic growth, it appears that Asia-Pacific will continue to expand its HNWI base.
So what are the impacts for the payments industry? Well, as non-cash based transactions continue to grow, particularly in developing countries, one should expect both debit and credit cards witness robust growth, especially as it appears as the biggest market in the region. China is relaxing some of its strict regulatory positions. The Chinese government recently gave Citibank approval to issue Citi-branded credit cards in the country, a first for foreign banks. Furthermore, with the growing HNWI class across the Asian-Pacific region, one should expect that premium or platinum credit cards will improve market share, particularly around the major cities of the region and areas like Hong Kong and Singapore.
Credit and debit cards still are relatively in their infancy in the region. Trends have emerged, however, showing consumer spending is slowly increasing on plastic and as the economies mature, traditional payment methods such as cash will likely cede market share to credit and debit cards. Although developing countries are often overlooked by the high-end market of many sectors, the premium credit card industry has a small, but growing foothold in the region, which is only expected to grow as the number of HNWI also grows in parallel.
The easing of some regulatory practices, strong and consistent economic growth as well as current and future population forecasts make the Asia-Pacific region arguably the most intriguing of payment landscapes among emerging-country regions. From basic banking services to premium credit cards, the future of payments in the region is undoubtedly bright. The Asia-Pacific premium credit card market will be more closely examined in an upcoming Mercator report, scheduled for later this year.
