Southeast Asia's digital payments are growing fast: what companies are in India's three-way payments

The 2023 Southeast Asia Digital Economy Report, jointly published by Google, Temasek and Bain & Company, noted the growing acceptance of digital financial services by consumers in the Southeast Asia region. Digital payments now account for approximately 50% of transactions in the region, while the market share of cash payments continues to decline.

Southeast Asia has a population of more than 600 million, with a high proportion of young people and considerable internet penetration. PwC analyses that Southeast Asia has a huge potential user base for digital payments. With the acceleration of the digitisation process, digital financial services are expected to be more widely promoted and applied in the region. Digital payments in Southeast Asia totalled US$22 billion in 2019 and are expected to grow to more than US$114 billion by 2025, according to the data.

In many cities in Thailand, an increasing number of shops are displaying images of QR codes and merchants are instructing customers to "scan the code to pay". This is part of QuickPay, a digital payment system developed and promoted by the Thai government. Users can register and log in to the system using their ID number or mobile phone number to make and receive payments. The Thai government aims to digitise 42% of payment transactions by the end of 2024, and it is expected that the average Thai will use digital payments 800 times per year.

Vietnam has one of the fastest rates of digital payment penetration in Southeast Asia. According to the Vietnam News Agency (VNA), the total amount of digital payments in Vietnam grew by 191 TP3T year-on-year in 2023. digital payments are expected to grow at a CAGR of 131 TP3T from 2023 to 2025. although Cambodia's digital payments industry is a latecomer to the game, it is growing fast. It is expected that digital payment transactions in Cambodia could exceed US$4.73 billion in 2023. In the Philippines, the payment system Gcash has 81 million active users and 2.5 million merchants, and more than 70% of Filipinos use Gcash, according to May 2023 statistics.

Currently, payment platforms such as WeChat Pay and Alipay are widely used in countries such as Thailand, Malaysia and Singapore. In many convenience stores and large shopping centres in Thailand, most Chinese tourists choose to use Alipay and WeChat Pay. Some Thai merchants have even launched promotions for Chinese tourists, offering discounts for code-sweeping payments. At the end of last year, the National Bank of Cambodia and Alipay signed a memorandum of understanding on code-sweeping payment cooperation, further deepening cross-border payment transactions between the two countries.

Despite the strong growth of digital payments in South-East Asia, a number of practical challenges remain. In some countries with weak financial infrastructures, parts of the population still do not have bank accounts or credit cards, which makes the roll-out of digital payments difficult. In addition, issues such as cybersecurity measures and digital cultural differences have slowed the spread of digital payments in some countries.