Southeast Asia witnesses a surge in cross-border payment transactions
In the dynamic landscape of Southeast Asia, digital payments are undergoing a significant transformation, propelled by advancements in real-time payment systems and cross-border connectivity. This evolution, marked by the rise of QR code payments, is set to reshape the cross-border payments industry.
According to recent estimates, the B2B cross-border payments market in Southeast Asia was approximately USD 44.5 billion in 2024, a figure that is projected to more than double to about USD 105.6 billion by 2033 [2]. This strong growth reflects the region's burgeoning digital payments ecosystem.
One key player in this digital revolution is Rapyd, a UK-based provider that has extended its services to help Small and Medium Enterprises (SMEs) accept more payment methods and transact to more countries [3]. This expansion is indicative of the growing demand for efficient and diverse payment solutions in the region.
However, many businesses in Singapore still favour legacy banks for transfers, despite long delays. The need to improve speed and reduce costs is driving real-time payments and interoperability in Southeast Asia, with Visa partnering with mobile wallet GCash and the launch of instant payment linkages between Singapore and Malaysia, as well as between Indonesia and Thailand [1].
The Regional Payment Connectivity initiative, which aims to connect the fast payment systems of its members and allow instant payments between countries, is another significant step towards cross-border collaboration [1]. Vietnam's central bank recently joined this initiative, further strengthening the region's commitment to digital payments.
The potential cost savings of QR code payments, as suggested by the Bank of Indonesia, could make them an attractive option for businesses. QR code payments avoid the need to exchange into a commonly held FX currency (i.e., the US dollar) to make payments, potentially leading to significant cost savings [5]. This could be particularly beneficial for countries like the Philippines, which received $38bn worth of remittances in 2022 [6].
If QR code payments rise rapidly, they could serve as a model for cross-border payments collaboration for other countries, particularly G20 members. Some analysts believe that the rise of QR code payments could be significant in the cross-border payments space [4]. WorldFirst reported a 50%+ increase in transactions, driven by a surge in new SME customers from Singapore and Malaysia [2], further underscoring the potential of QR code payments.
In conclusion, the rapid growth of QR code payments is set to transform the cross-border payments landscape in Southeast Asia, offering a more efficient, cost-effective, and interoperable solution for businesses. As the region continues to embrace digital transformation, the potential for further growth and innovation in the cross-border payments sector is immense.
References:
- The Asian Banker
- WorldFirst
- Rapyd
- Finextra
- Bank of Indonesia
- World Bank
The burgeoning digital payments ecosystem in Southeast Asia, led by advancements in real-time payment systems and QR code payments, is spawning a significant shift in the cross-border payments industry. The expansion of UK-based provider Rapyd, catering to Small and Medium Enterprises (SMEs), demonstrates the growing demand for efficient and diverse payment solutions in the region, and this trend is anticipated to fuel the growth of technology-driven finance solutions.
