Driven by increased smartphone penetration and a rise in digital payments adoption, Asia is widely accepted to be leading in mobile payments globally. A study by Kantar TNS found that over half of connected consumers in the Asia Pacific region use mobile to pay for goods and services via apps, compared to consumers in North America and Europe. In Malaysia smartphone penetration grew from 68.7% in 2016 to 75.9% in 2017, according to SKMM’s latest study.
Consumers today are embracing e-payments in almost every aspect of their daily lives due to the convenience and speed they bring. This is made possible with the increasing array of solutions such as digital wallets, mobile payment apps and stored value cards. At the same time, there’s been increased awareness of going cashless recently, as more governments in Asia are driving the payments transformation.
With e-commerce expected to be worth $90 billion USD by 2025, the majority of FinTech companies in the region have made payments their focus. According to statistics fro United Overseas Bank (UOB), 43% of FinTech companies in the region focused on payments and they are in the driver’s seat of making a cashless society turn into a reality.
However, Asia remains a fragmented market in the digital payments space with varying levels of readiness; as well as differing payments infrastructure and emerging technologies. Businesses that can navigate the opportunities and challenges of the digital economy both regionally and locally will be best poised to harness the growth potential of the payments space.
Singapore has consistently led in digital transformation both regionally and globally. It’s no surprise that they are making headways in mobile payments given the Government’s push to drive the Smart Nation agenda.
Recently, the country announced that starting next year, customers dining at coffee shops, hawker centers and industrial canteens (all of which make up a significant portion of dining locations in the country) can choose from all 20-payment schemes through unified touchpoints.
It’s the first time the country is unifying behind an integrated system that provides options for consumers. Across the country, there has also been a wave of e-banking and peer-to-peer electronic fund transfers rolled out by financial institutions in Singapore, which have been readily adopted by consumers.
Earlier this year, several payment companies came together to develop a universal unified payment QR code SGQR to allow consumers to scan and transfer funds from as many as 27 e-payments apps. This was a win for both consumers and merchants. Consumers don’t have to worry about not having options and merchants need not display multiple QR codes and payment options at their stalls.
Malaysia has also been making in-roads to become a cashless society. There are now a variety of digital payments platforms in Malaysia, as FinTech players tie up to provide more payment options for consumers.
The entry of mobile payment services providers – AliPay and WeChat Pay, also boasts an array of offline and online partnerships, accelerating the country’s migration to e-payments. And recently, Razer partnered with Berjaya to launch the digital wallet, Razer Pay, which enables Malaysians to transfer funds to each other and top-up at more than 2,200 7-Eleven stores across the country or via their bank account.