Revolutionizing APAC Payments: A Digital Transformation Story

The APAC region is experiencing a rapid shift in the mode of payment from cash to digital processes, which is contributing to the economic growth of the region.

FREMONT, CA: The APAC payments sector, which serves two-thirds of the world's population, has witnessed substantial innovation in recent years. Significant improvements have been made to e-commerce, cross-border real-time payments, and central bank digital currency (CBDC) as a result of a number of advances. This has assisted in transforming the cash-based market into a digital payment environment. With a compound annual growth rate (CAGR) of six per cent, digital payment transactions in APAC increased as a result, reaching USD 427 billion in 2030.

In the realm of modern payment methods, real-time solutions like QR codes, IMPS, and NFC are gaining prominence. Simultaneously, the cross-border payment landscape is evolving with the adoption of distributed ledger technology (DLT), APIs, and automation, promoting swifter, more secure, and transparent transactions. Additionally, CBDCs are gaining acceptance and scalability in APAC countries like China, Singapore, and India.

Digital banks are expanding their reach, offering cost-effective banking services through fully digital platforms. Furthermore, digital lending is flourishing in both B2B and B2C sectors, driven by online loan platforms, corporate cards, FinTech co-branded cards, and buy now pay later (BNPL) solutions.

The surge in new payment projects is driven by advancements in technology and infrastructure, responding to the rising demand. Factors like FinTech-driven and consumer-oriented initiatives influence the success of these payment innovations. Financial institutions with advanced technology are teaming up with FinTech partners at the module level to deliver innovative and efficient solutions. Blockchain technology, particularly DLT, has played a significant role in enhancing the payment landscape, enabling smooth real-time transactions and reducing payment-related friction.

The APAC region has witnessed a remarkable rise in the adoption of modern payment options, largely attributed to the impact of consumer and market-driven factors. This surge can be attributed to the fact that 62 per cent of the APAC population has embraced smartphones, while 64 per cent have adopted the internet, creating a fertile ground for digital payment solutions. Moreover, 76 per cent of the APAC population is now actively engaging with banking services, further facilitating the widespread acceptance and utilisation of contemporary payment methods in the region.

The APAC region, characterised by rapid growth and technological advancement, stands at the forefront of digital payment innovation and adoption. While certain countries like Thailand, Japan, and Vietnam still favour cash over digital methods, recent trends indicate a gradual decline in cash usage. Notably, it is anticipated that the value of cash transactions in retail will be halved by 2026, decreasing from 16 per cent to 8 per cent. This shift is primarily driven by active government initiatives and digital players promoting real-time payments through mobile wallets and QR codes, solidifying APAC's position as a dynamic hub for digital payment solutions.

Key factors driving the adoption of mobile and QR-based real-time payments include streamlined onboarding processes that offer instant activation, simplified transaction steps, and promoting user engagement. These digital methods enhance transaction transparency, enabling customers to track receipts, prevent fraud, and combat money laundering, a feature lacking in cash transactions. Furthermore, the pace and convenience of real-time payments, accessible anytime and anywhere, contribute to their popularity. Additionally, these payment solutions optimise operational costs, benefiting both businesses and consumers alike.

The ongoing transformation of the APAC region, marked by the rising adoption of digital payments for secure and convenient transactions, will be further fueled by disruptive technological advancements. This trajectory is expected to contribute significantly to economic growth and deeper global economic integration in the region.