Southeast Asia Payment Methods Data: Cash-on-Delivery Up, Despite Onslaught of Fintech

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Credit cards. Not a thing in emerging Southeast Asia.

Fintech is quickly becoming the next big thing in Southeast Asia. According to recent data from Tech in Asia, the number of venture capital deals in fintech has outpaced ecommerce for the last two quarters – something that hasn’t gone unnoticed by the big players.

Alibaba is on a mission to bring in Alipay and Ant Financial into Southeast Asia through its $1 billion Lazada acquisition. Indonesia’s Go-Jek recently launched Go-Pay and Grab is said to be raising a massive $1.5 billion round to fuel its nascent payment platform.

Despite an increasing influx of money into the payments ecosystem in Southeast Asia, cash-on-delivery (COD) remains the most popular payment method in emerging Southeast Asian markets. Aggregated data shared by aCommerce indicates that the share of COD orders has increased over the last 12 months.

Of course, the data is limited to the orders processed by the regional ecommerce enabler and skewed by individual client preferences, but given their size and reach, offers a good representation of the market.

What then could explain the increase in COD share in markets like Indonesia, Thailand and the Philippines? One hypothesis could be that as ecommerce continues to gain widespread adoption, new users are the late majority and laggards. These groups are less likely to have access to credit cards and some won’t even have bank accounts. This means COD will still be essential for continued ecommerce growth in emerging Southeast Asia.

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