Voice of the Industry

How real-time payments are transforming Southeast Asia

Thursday 2 March 2023 08:08 CET | Editor: Raluca Ochiana | Voice of the industry

Han Tun Lwin, Senior Product Manager at 2C2P, elaborates on the growing popularity of real-time payments (RTP), the main factors behind it, and the future of RTP.


The waiting game is over. From food to communication, we've gotten used to living in an instant world for a while. Then the pandemic arrived, wearing our patience down thinner still. Today, give customers just a smidge of payment friction at checkout and you risk losing them. This helps explain the growing popularity of real-time payments (RTP) – inter-bank transfers of funds initiated and settled in seconds.

As demand for an exceptional customer experience accelerates, real-time payment (RTP) networks have evolved. Gone are their domestic days when they solely served their respective countries, facilitating quick and easy local inter-bank transfers. Today, RTP networks are going international, linking Singapore, Malaysia, Thailand, Indonesia, and the Philippines.

The evolution of RTP networks doesn’t end here. An IDC InfoBrief commissioned by 2C2P predicts RTP networks in Southeast Asia to top USD 2.4 trillion by 2025 – a massive 2.3 times increase compared to 2020.

Given the rapid pace of development, it’s clear that catering to RTP is no longer a nice-to-have but a vital mechanism to remain competitive.

What are real-time payments?

Before jumping into what makes real-time payments (RTP) tick in so many countries, let’s understand what they are. The first hint is in their name: these payments are initiated and settled instantly between banks in real time. RTP also operates 24/7, 365 days a year, making it possible for you to make payments at any time at your convenience – this includes weekends and holidays.

RTP networks are also open-loop, meaning that transactions are not limited to a specific financial institution. Users can make payments as long as their bank participates in the network.

RTP networks are typically local, facilitating payments between banks within a given country. For example, we have PayNow in Singapore and Unified Payments Interface in India.

Why are real-time payments popular?

Simply because they are easy and fast. Across Southeast Asia, governments are driving RTPs to facilitate efficient and fuss-free transfers between banks.

Governments and regulators are also key to keeping transfer costs low or sometimes free of charge, working closely with banks, acquirers, and issuers to enhance the system with subsidies.

The explosive popularity is evident in the transaction volumes of RTPs across Southeast Asia. In 2021, Thailand took the lion’s share with its PromptPay scheme, recording a transaction value of over USD 1 trillion. Malaysia follows at USD 297 billion – and Singapore at USD 221 billion.

What’s driving the growth of real-time payments?

While governmental intervention paved the way for RTP to flourish, other factors have also contributed, and continue to contribute, to the growth of RTP.

According to Deloitte’s real-time payments report, technological innovation is a crucial driver of RTP growth. This finding doesn’t come as a surprise, given how prolific smartphone adoption is in both the developed and developing worlds.

It’s users like you and me who spur developers to further innovate and transform RTP.

We already see this playing out through Quick Response (QR) code payments. You only need a camera-enabled smartphone to scan these iconic black and white pixelated squares of code to make payments. Once a code is scanned and the transaction confirmed, the payment is instantly delivered to your intended recipient in real time

Since 83.72% of the global population owns smartphones today, QR code payments drive financial inclusion, giving the unbanked and underserved access to efficient and easy digital payments.

According to Juniper Research projections, global spending via QR code payments will reach over USD 3 trillion by 2025, up from USD 2.4 trillion in 2022. Much of this projected growth will be attributed to an uptick in financial inclusion in developing regions and the provision of a viable payment alternative in developed areas.

The same report also found that national schemes are pivotal to the growth of QR code payments as they tend to encourage ease of use for the consumer, where increased interoperability serves as a critical enabling factor.

Legislation of real-time payments

As mentioned earlier, governments and central banks are the most powerful drivers of RTPs in Southeast Asia. Laws surrounding RTPs in the region are therefore designed to support and encourage the use of these networks, and this begins with schemes to keep transfer costs low.

Although banks technically own the RTP infrastructure, national agendas by governments and central banks mandate that RTP costs are kept low. Although this reduces the overall fee revenue of banks, they have unique access to the power of RTP networks to expand their service offerings and drive customer loyalty.



Future of real-time payments

Real-time payments have increasingly been augmented with cross-border capabilities.

In July 2022, the central banks of five Southeast Asian countries forged an agreement to link their payment systems – a feasible way to piece the fragments in e-payments. Slated to be completed by November 2022, this agreement will connect Singapore, Malaysia, Thailand, Indonesia, and the Philippines.

This move will enable people to seamlessly make cross-border QR payments in their local currencies across the five markets. The agreement will also reduce reliance on USD as an intermediary currency, where currency pairs are directly exchanged.

By achieving seamless RTP interoperability across borders, we can possibly see the elimination of the present correspondent banking system, which handles cross-border payments in an expensive and complex manner.

Add to this the overwhelming support governments and central banks provide, and cross-border payments will only continue to become cheaper, easier, and faster well into the future.


This editorial piece was first published in The Paypers' Cross-Border Payments and Ecommerce Report 2022–2023, 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 Han Tun Lwin

Han Tun Lwin is the Senior Product Manager at 2C2P. With over 8 years in managing fintech products and digital distribution products, Han currently leads 2C2P's QR payment solution.




About 2C2P

2C2P is a full-suite payments platform, empowering global enterprises operating in Asia to securely accept payments globally across online, mobile, and offline channels, as well as providing issuing, payout, remittance, and digital goods services. It is the preferred payments platform of tech giants, online marketplaces, retailers, and more.

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Keywords: cross-border payments, ecommerce, real-time payments, payment methods
Categories: Payments & Commerce
Companies: 2C2P
Countries: World
This article is part of category

Payments & Commerce


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