Unpacking payments in APAC.

The Asia-Pacific region is emerging as a payments powerhouse, with unique opportunities and challenges for businesses that know where to look.

To help make sense of this hugely complex marketplace, and shine a light on the potential opportunities, we spoke to two of our experts in the region – Cecilia Tan, Vice President of APAC Sales, and Damien Gough, Head of APAC.

The Asia-Pacific (APAC) payments landscape is unlike any other. Vastly populated and diverse, with a relatively young and growing consumer base, the region is one of the most important when it comes to the growth in digital payments. According to McKinsey1, 2022 saw global payments revenue of $2.2 trillion. Almost half – $1 trillion – came from APAC, with the region growing at twice the rate of others between 2016-2022.

Accelerated digital growth

As with much of the world, Covid-19 accelerated a push towards cashless payments. While western consumers and many countries across APAC had largely transitioned to using payment cards long before the pandemic, a high number of people in the wider region were – and remain – unbanked, although a significant portion leapfrogged straight into mobile banking as a result. “We’ve seen a huge rise in digital payments across the region in just the last few years,” explains Cecilia Tan, Vice President of APAC Sales at Thredd. “With more retailers and government services such as mass transit now supporting contactless payments, the opportunity for further user adoption and growth is significant.”

And digital payments come in many forms. While digital wallets like Apple Pay and Google Pay are popular the world over, the region also has several local players, such as ShopeePay and GrabPay in Singapore and WeChat Pay and AliPay in China. Another way in which APAC is relatively unique is in the popularity of QR codes as a method of payment. “In more developed countries like Singapore, you’ll see QR codes everywhere,” says Damien Gough, Head of APAC at Thredd.

Other key statistics by market

_{Sources: Statista, GlobalData, UN}

Manoeuvring the payments landscape 

As the chart indicates, consumers across the APAC region have a broad range of payments preferences. Governments and companies of all sizes are learning to navigate these preferences while balancing the need to support both domestic and cross-border payments in the region. Adding to this complexity is the growth of RTP programmes. In 2022, there were 195 billion RTP transactions globally2, 49.2 billion of which were in APAC. By 2027, that figure is expected to reach 300 billion – a near sevenfold increase.3  

As with other factors in the region, it’s critical to understand the individual nature of each market to see the opportunities beneath the surface. With RTP for example, creation and adoption of these systems across the region is expected to rise in all countries, but Hong Kong, Malaysia and the Philippines are growing particularly fast (with annual growth of 24%, 20% and 19% respectively) and in Indonesia predicted growth is staggering, rising from 470 million transactions to 9.2 billion by 2027.  

Cross-border collaboration is also growing, explains Gough. "Something that's unique to the region, more so than other regions, is governments are trying to interconnect their domestic payment systems to each other, facilitating real-time payments between countries. Certain pockets of Malaysia, Singapore, Thailand, and other markets are now cooperating with each other to have their RTP systems interconnect.”  

Whether this is good news for payments providers remains open to interpretation, he says. “This unique approach can be either a challenge or an opportunity depending on your role in the payments ecosystem.”  

Further examples include the Hong Kong Monetary Authority, which is developing a scheme with the Central Bank of Thailand (BOT) to allow Hong Kong’s Faster Payment System to work with Thailand’s PromptPay. Elsewhere, the BOT already has an agreement with Malaysia’s Central Bank and Singapore’s Monetary Authority for interoperability for their RTPs. 

Finding a path through 

Providing a winning payments offering in a particular APAC country – or across many – can be accomplished, as demonstrated by Thredd partners such as Nium, BigPay, Paidy, PingPong and LianLian. Many firms are finding ways to creatively navigate the space to provide consumers with payments options that fit their needs. Delivering on this opportunity is clearly a nuanced proposition, requiring knowledge, technology, and vision of the unique characteristics of each country. If you’re interested in tapping into this burgeoning payment market and want to find out more, get in touch to speak with our experts on the ground.

_{Sources (map): Statista, GlobalData, The Global Economy 
Sources: Statista, Macquarie, GlobalData}