Credit Card Adoption in Asia

Credit card penetration across Asia is very low when compared to places like the US and Europe. Many people in Asia are underbanked leading to difficulties in even obtaining credit cards. As a result, the ability to pay by credit is drastically reduced; although things can differ widely.


In Vietnam, a sub $1 taxi can be paid for on a credit card while in Thailand, you can’t even use a credit card at an electronics shop. In Singapore, it varies though the NETS card, a debit card, is much more widely accepted than traditional credit cards.

Most telling perhaps, is that 7-11’s, a staple of Asians cities large and small, does not accept credit card.


The slow adoption of credit cards by Asian consumers has been a challenge for technology companies looking to do business Asia. Considering that the region will overtake North America as the largest e-commerce market by 2018, it’s imperative that companies find ways to work within the system. While credit card adoption is definitely on the rise, particularly in developed countries such as Korea and Singapore, there are still massive challenges that lie ahead for many of SE Asian’s cities. Poorer countries such as Thailand and Indonesia, for example, have less than 6% credit card penetration. According to a variety of studies on the topic, in countries like Thailand, Indonesia and Vietnam 70-80% of e-commerce is paid through bank transfers or cash. This leads to tech companies to adjust their strategies, software and payment systems for the region.


Take Uber for example. While many Westerners find their no cash policy convenient, it discourages use by many Asians without credit cards. Hence, Uber’s recent policy changes in Asia, such as the ability to pay drivers in cash, shows the kind of adjustments companies must make when doing business in Asia. In addition, many e-commerce sites find a payment system challenging and often create their own systems, particularly often offering cash upon delivery. More regional apps such as Go-Jek, Indonesia hot startup for everything from transportation to food delivery, relies on cash payments. In addition, larger companies such as Lazada and Groupon offer cash upon delivery options in certain markets.

Despite the low credit card numbers across Asian Pacific, research has shown that consumers are not necessarily against electronic payment. As a matter of fact, many of them felt more secure using companies that had online payment systems. This is clear from the massive growth AliPay has experienced in China. AliPay works as a placeholder for the money between the buyer and seller, allowing the buyer to receive and confirm the product before money is shared with the seller. This kind of system has been hugely popular and many studies suggest that rather than invest in credit cards for e-commerce, new forms of payment may overtake the need for a credit card.


Today, credit card adoption across Asia varies widely, though overall there is not a culture of largely accepted credit card payments. Even in countries like Singapore and Korea which have some of the highest numbers of credit card owners, there are still many places that do not accept credit card-such as many taxis in Singapore.


Ultimately, however, Asian consumers may have no need for credit cards in the long run as companies find ways around the credit card and eventually create whole new systems of money transfers for the next generation.