Payment systems across the Asia-Pacific (APAC) region are expected to increasingly rely on direct bank transfers by 2035 as the use of cash continues to decline.
Account-to-account (A2A) payments, which enable funds to move directly between bank accounts without relying on card networks, are forecast to see wider adoption across the region between 2026 and 2035, according to McKinsey & Company.
In India, A2A payments are expected to remain a dominant payment method through 2035, supported by the Unified Payments Interface (UPI), which enables consumers and businesses to transfer money directly between bank accounts. UPI has already replaced cash for certain transactions, with low transaction costs further encouraging adoption.
China is also projected to maintain strong use of direct bank transfers, while cash withdrawals from automated teller machines (ATMs) are expected to decline.
Across other Asian markets, excluding China, A2A payments are likely to remain widely adopted through 2035. Card-based transactions, including payments through digital wallets, are also expected to retain significant market penetration.
In Oceania, card payments are projected to remain popular, alongside increasing adoption of direct bank transfers.
Meanwhile, stablecoin usage across APAC is expected to remain relatively limited compared with established payment methods through 2035. McKinsey noted that stablecoins and tokenised bank deposits are primarily being used for corporate transactions rather than everyday consumer payments.
These digital payment instruments offer businesses an alternative for cross-border transfers, which can take three to five business days through conventional banking channels.
The report also highlighted rising technology costs for payment providers as markets continue to develop different payment infrastructures and systems.
Global spending on payments technology is forecast to grow by approximately 9% annually through 2030, outpacing the projected 4% annual growth in payments revenue.
To manage this complexity, payment providers are increasingly adopting software that automatically selects suitable payment networks and establishing partnerships with local operators to navigate different payment ecosystems.
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