Asia Pacific Outshines Globally in Instant Payments Adoption

APAC
Dominates
in
Instant
Payment
Innovations

The
Asia
Pacific
region
is
leading
the
way
in
the
adoption
and
implementation
of
instant
payments,
thanks
to
innovative
technology,
widespread
smartphone
access,
and
favorable
regulations.
This
has
positioned
the
region
as
a
global
pioneer
in
instant
payments,
facilitating
easy
access
to
real-time
settlements.
With
the
majority
of
profitable
digital-only
banks
being
based
in
the
region,
this
success
is
expected
to
thrive
with
the
increasing
adoption
of
new
fintech
models.

The
Asia
Pacific
region
houses
10
out
of
13
of
the
world’s
most
profitable
digital-only
banks.
The
region’s
eagerness
to
experiment
with
alternative
payment
options
has
led
to
improved
domestic
and
cross-border
payment
capabilities,
real-time
settlement
access,
financial
inclusion
opportunities,
and
a
leadership
position
in
financial
innovation.
The
Asia
Pacific
region
is
home
to
20%
of
the
world’s
digital
banks,
and
its
citizens
are
the
most
enthusiastic
adopters
of
digital
payments.

Emergence
of
Digital
Wallets
in
APAC

Digital
wallets
in
the
Asia
Pacific
region,
excluding
China,
have
more
than
doubled
their
share
of
e-commerce
transaction
value
in
the
last
five
years.
This
trend
is
forecasted
to
continue
growing
over
the
next
three
years.
Similarly,
the
share
of
payment
transaction
value
at
point-of-sale
from
digital
wallets
has
seen
a
six-fold
increase
in
the
last
five
years.

In
particular,
Southeast
Asia
demonstrates
substantial
regional
payments
progress.
It
is
projected
that
the
real-time
payments
network
volume
within
the
market
will
reach
$2.4
trillion
by
2025
—
a
230%
increase
from
2020.
It
is
also
predicted
that
over
400
million
people
in
Southeast
Asia
will
use
mobile
wallets
by
2026.

Spotlight
on
India’s
Payments-Driven
E-commerce
Growth

In
India,
the
National
Payments
Corporation
of
India
has
made
the
Unified
Payments
Interface
(UPI)
available
to
Indian
non-residents
in
ten
countries,
including
Australia,
Canada,
Singapore,
the
UK,
and
the
US.
This
move
is
expected
to
pave
the
way
for
a
global
remittance
network.
UPI
and
other
real-time
payment
schemes
are
also
expected
to
fuel
cross-border
commerce
in
India,
offering
online
merchants
a
significant
growth
opportunity.

Account-to-account
(A2A)
payments,
which
reduce
the
cost
of
payment
acceptance
for
merchants
while
improving
cash
flow
through
immediate
funds
availability,
have
seen
a
significant
rise
in
India.
A2A
payments
as
a
percentage
of
e-commerce
transaction
value
jumped
from
12%
in
2021
to
19%
in
2022,
and
are
projected
to
reach
24%
by
2026.

Challenges
in
the
Path
of
Digital
Payments
Transformation

Despite
the
progressive
stance
of
the
Asia
Pacific
region
on
digital
technology,
privacy
and
security
concerns
could
impede
the
adoption
of
new
payment
rails.
Research
suggests
that
over
75%
of
the
region’s
consumers
would
withdraw
their
support
of
a
brand
in
the
event
of
a
data
breach.

The
World
Economic
Forum
refers
to
the
Asia
Pacific
region
as
the ‘ground
zero
for
cybercrime
incidents’.
The
rapid
evolution
of
the
cyber
threat
landscape,
the
rise
of
malicious
software,
the
mobilization
and
organization
of
cybercriminal
groups,
geopolitical
conflicts,
and
economic
uncertainty
have
all
combined
to
create
a
conducive
environment
for
threat
actors.
In
the
region,
60%
of
surveyed
leaders
acknowledged
a
significant
lack
of
cybersecurity
staff
in
their
organizations.

The
varied
and
unpredictable
consumer
behavior
in
the
region
also
poses
a
challenge.
While
consumers
in
Hong
Kong
and
Singapore
are
historically
more
open
to
new
digital
payment
methods
like
Apple
Pay,
Google
Pay,
and
Samsung
Pay,
consumers
in
markets
like
China,
the
Philippines,
and
Vietnam
tend
to
pay
with
local
and
regional
wallets
for
reasons
of
familiarity
and
convenience.

As
the
use
of
crypto
in
payments
continues
to
expand
in
APAC,
harnessing
that
momentum
will
rely
on
close
collaboration
between
national
governments
and
private
companies
to
achieve
maximum
impact
and
ensure
the
utmost
security
for
consumers.

Image
source:
Shutterstock

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