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How Southeast Asia is Playing a Crucial Role in Driving Payment Flexibility Asia's digital payments are expected to reach over $1 trillion by 2025, according to a Google-led study

By Jem Francisco

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.


Imagine waiting for the latest release of your favorite video game. Credit card in hand, you run to the store on the first sale day and start lining up only to find out that they are only accepting cash. Since you won't have money until the next payday, you miss your chance of getting the video game as soon as you had wanted.

Situations like this were not rare a few years ago. Today however, fintech and online shopping have propelled the growth of ecommerce and a number of payment options, making it easier for customers to purchase products in their preferred payment terms through a gateway of their choice.

According to a story published by Entrepreneur Asia Pacific, Asia's digital payments are expected to reach over $1 trillion by 2025, with the market for e-wallets reaching $114 billion in the same year. This number is up 500 per cent from just $22 billion in 2019. This shows how Asia has become a force in the digital age, soon overtaking other regions when it comes to digital transformation.

Zeroing in on Southeast Asia, the subregion's most familiar payment platforms and apps include Stashaway (Singapore), Momo (Vietnam), Akulaku (Indonesia), and Gcash (Philippines). All of these solutions market convenience, transparency, and access, which can help improve the low level of financial inclusion in ASEAN.

The World Bank reports that more than 50 per cent of the population in most ASEAN countries do not own an account at a formal financial institution. While this gap is currently being bridged by governments through the banking sector, it is also important to develop national financial inclusion strategies that emphasize the need for diverse digital financial services.

ASEAN still relies heavily on cash, and a huge chunk of digital payments in the region come from similar sources: ride hailing apps such as Grab and Gojek, e-commerce platforms like Lazada and Shopee, and social media platforms like Instagram and Facebook.

Most of these companies are homegrown, a testament to the thriving startup community in ASEAN. Here, startups that are able to scale and grow their business encourage greater innovation among their peers and competitors, resulting in better and more sophisticated payments solutions across the board. However, if digital financial services in the region are to truly succeed, then services that accept digital payments must go beyond the usual.

It is also important to note that the acceleration of digital financial services in each country largely depends on the level of support from the public and private sectors, as well as coordination mechanisms between the two. Countries such as Singapore, Thailand, and Indonesia are well supported by their governments and are thus leading the way for their neighbors.

Payment Flexibility as a Barometer of Technological Advancement

As digital disruptions take place and people explore various innovations set before them, blockchain and cryptocurrencies naturally emerged, and with a strong following. There are as many as 991 blockchain companies in Asia-Pacific, evidence of the region's drive to become recognized in the area of digital technologies.

Pundi X, a cryptocurrency-based blockchain platform founded in Jakarta is one of the more successful blockchain startups that have come out of ASEAN. Pundi X's platform allows accessible cryptocurrency payments anywhere in the world where their XPOS, the world's first blockchain-powered Point of Sales device and system, may be found.

One transacts with XPOS given a physical card XPASS or the mobile app X-Wallet both of which support all major cryptocurrencies. To date, the company has deployed thousands of this device to restaurants, department stores, and grocery shops across 25 countries in Europe, the Americas, Africa, and Asia Pacific.

Another company that is making strides in the payments space is Swift, a banking cooperative that accomplished a cross-border transfer in just 13 seconds last July 2019. Swift's gpi instant allows transfers without the hidden costs and long processing times associated with cross-border transactions. It has been reported that accessibility and ease-of-use in cross-border payments can boost the tourism and remittance markets.

More than anything, it is important for ASEAN to level the playing field in terms of standards and regulations, as national legal frameworks still vary from country to country. There have also been discussions around a regional e-payment platform for ASEAN, but geographical and cultural differences are deemed to be major barriers to this platform's success.

Ultimately, the number of payment methods available for customers signals the level of technological advancement for countries. Today's businesses should always remember the word "choice", and provide their customers with as many options as possible, whether that is in terms of the product iterations that they offer or the payment gateways that are available.

Jem Francisco

Former CPA, SGV & Co

Moderator of The Holistic Strategy in Stock Market, a Facebook group. Former CPA at SGV & Co.
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