Interview

Asia's payments landscape and new business opportunities

Tuesday 8 March 2022 11:03 CET | Editor: Vlad Macovei | Interview

Joseph Chan of AsiaPay is taking the pulse of Asia’s payments landscape, providing insights into digital payment trends and new business opportunities

Looking amid and beyond the pandemic, what are the megatrends accelerating Asia’s payments revolution? 

Asia’s payment landscape has witnessed an unprecedented change with continued rise in digital transactions – with a 20% increase in consumers base across the overall industry and an 80% retention rate – and this digital acceleration has recently pushed forward several trends that were already gaining momentum. E-wallets and QR codes will become the next normal. The recent momentum achieved by e-wallet providers and QR-enabled solutions is likely to further decrease the use of cash, particularly in emerging markets like ASEAN, with contactless cards serving as a driver in developed Asian countries.

As real-time payments become the norm, banks have a boon: banks and bank wallets continue to win emerging Asia. Platforms excel at customer experience: ecosystem players tied with banks in developed Asia offer superior user experience and captivating use cases. Cross-border payments in Asia have been plagued by the twin challenges of long settlement times and high costs,but new bilateral cross-border partnerships have the potential to overcome this. Regional ecosystem players could disrupt this space by providing comprehensive cross-border digital payment services – for instance, we could soon see a Singapore-issued e-wallet used to scan and pay for a meal in Jakarta or Bangkok.

How do you see the partnerships of big international companies with local players working further in digitising payments and shaping consumer behaviour?

In this era of digital globalisation, innovation, and disruption change the way we live and do business. AsiaPay has been striving to increase its corporate value for long-term financial health growth. Our partnership with PayPal Pay in 4 actively explores the APAC regional markets, and we believe that in the future more and more people will be using this payment method. Overall, the partnerships between local players and BigTechs could be valued by:

  • driving innovation and reaching new customer segments;
  • navigating regional ownership constraints;
  • leveraging each other’s core technologies and products to provide more valuable experiences for consumers and merchants;
  • customer data (readily available with local players and BigTechs), which can be analysed to understand customer behaviour needs, being critical factors for success in the payments ecosystem.

What business opportunities could enable the region’s SMEs to engage more in international ecommerce? 

Being successful while engaging more in the ecommerce sector requires:

  • the ability to embrace the change;
  • readiness and ability to use information and communication technologies for establishing or expanding to be a digital business and conducting international payments;
  • access to services, networks, and platforms that feed into the ecommerce process chain;
  • access to customer-friendly checkout experience;
  • access to integrated payment service providers with connections to domestic banks and prevailing alternate payment methods across the region;
  • access to post and express delivery services with a tracking feature;
  • a multistep process of shipping, clearing customs, and delivery;
  • collaboration with ecommerce platforms and social media channels for selling and extra values.

For setting up a digital ecommerce business, several enabling policies are key to meet that regard: seller registration on online ecommerce platforms; IP-related issues in ecommerce; solid ICT infrastructure, smartphone penetration, and affordable access to the Internet and mobile network; access to a skilled labour market, especially IT; simple business registration process with the local authorities; successful implementation of e-signatures and e-contract laws.

What could be the solution to improve the payments interoperable infrastructure and expedite global partnerships for seamless cross-border commerce?

A regional infrastructure like the Single Euro Payments Area (SEPA) would be beneficial for the Association of Southeast Asian Nations (ASEAN), along with bilateral agreements like the one between the Network for Electronic Transfers from Singapore and the National Payments Corporation of India (NPCI). In addition, regional ecosystem players could disrupt this space by providing comprehensive cross-border services, while governments are heading their way on collaboration on digital currencies.

What is your take on the rise of super apps and QR-based payments? Do these options truly have the potential to further disrupt the payments industry?

The increased use of smartphones and e-wallets is likely to boost financial inclusion. So, at least for this particular reason, super apps and QR code-based payments are ramping up in Asia and will continue to do so. The use of mobile payments is on an inexorable upward trajectory – according to a report by FIS, digital wallets will account for more than half of all ecommerce payments worldwide by 2024, as consumers shift from card-based payments to Account-to-Account and QR code-based transactions. This payment means also brings a lot of convenience, driving users to e-wallets as the first point of contact and away from traditional cards and banking interfaces, along with proximity payment via NFC. E-wallets allow consumers to load and store payment methods and access funding sources, such as cards or accounts, on their mobile devices. These wallets will be increasingly pivotal as a payment ‘front end’, as illustrated by Apple Pay, the relaunched Google Pay, and the rise of super apps WeChat Pay and Alipay in China. And traditional payment from bank accounts and credit cards will fund these wallets. 

AsiaPay has partnered this year with several BNPL providers. How do you see the potential of BNPL across APAC?

The payments space was incredibly robust across the Asia-Pacific in the first half of 2021, with the Buy Now, Pay Later (BNPL) space considered to be one of the fastest-growing subsectors, as per a KPMG report. The pandemic has not only adversely affected businesses, but also consumers’ disposable income. As a result, with the rising demand for consumer financing and the growing ecommerce sales, BNPL services have emerged as a major new payment and short-term borrowing tool for consumers. At AsiaPay, we are partnering with BNPL providers such as Atome, Zip, Pace, PayPal, Kredivo, Hoola, PayLater by Grab – to name a few – to increase the potential of BNPL service adoption and gain access to a wide range of merchants currently using our digital payment solutions.

This interview was first published in our Cross-Border Payments and Ecommerce Report 2021–2022, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally.

About Joseph Chan

Joseph Chan founded the company in August 2000. He spearheaded the company and product development together with his management team to become one of the most successful digital payment services and technology companies in Asia. Through successive positions in banking and finance industries, Joseph has consolidated his expertise and experience in strategic planning, management and implementation of financial, electronic banking, Internet, and mobile product services and systems in Asia.

About AsiaPay

Founded in 2000, AsiaPay, a premier digital payment solution and technology player in Asia, strives to bring advanced, secure, integrated, and cost-effective digital payment processing solutions and services to banks and e-businesses around the world. Its integrated omnichannel payment services cover credit and debit cards, bank account/net banking, digital wallets, over-the-counters, prepaid cards, and other digital means. We are an accredited payment processor and payment gateway solution vendor for banks, and a certified international 3-D Secure vendor of Visa, Mastercard, American Express, JCB, Discover Global Network, and UnionPay.


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Keywords: AsiaPay, cross-border payments, BNPL, QR payments, SEPA
Categories: Payments & Commerce
Companies:
Countries: Asia
This article is part of category

Payments & Commerce






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