Mobile & Cashless Payments Implementation In Southeast Asia
In Southeast Asia, there’s no doubt that cash is still the king but the situation is slowly but steadily taking a headwind as newer and more efficient technologies pioneered by mobile and cashless payment methodologies are making its way into the daily lives of the people.
Southeast Asia, as a market is highly diverse and the need for local solutions for local problems has led to the creation of multitude of enterprises catering to the financial problems of the particular counties. To start off, let’s talk about one of the rising star in the Thailand market, Rabbit line Pay which was developed by the Bangkok Mass transit system in connivance with the Japanese messaging platform, Line. A Nikkei study shows that the current number of customers for this particular mobile app stands at 7 million. The app itself can be used, other than the MRT system at various retail outlets and is slowly becoming the de facto standard of cashless transactions in Thailand.
Let’s shift our focus towards the developed markets of the region- Singapore. Even mature banks like OCBC & DBS have come out with their own mobile banking platform which can be used across more than 100 retailers, varying from local eateries to departmental stores like Robinson’s.
The current ecosystem of interdependence across industry sectors is very much prevalent for mobile cash payments as well. Taking cue from the importance that sharing economy is gaining, it is not surprising to see smartphone payments in Indonesia skyrocketing among motorcycle taxi users, courtesy, ride-hailing company Go-Jek. With its current penetration of cashless wallet, the company has managed to eliminate around 50 % cash transactions. The list goes on and on with similar success stories for GrabPay, Kudos, Liquid Pay etc. all ventures catering to the ease and efficiency of the mobile cash payment methodology.
Now let’s focus on the conditions that will make this particular trend so conducive for our current supposition. Southeast Asia with its huge population has a huge percentage of unbanked population. To put into perspective, according to a World Bank report, only 30 % of Indonesians and Filipinos have bank accounts, while plastic money is limited mainly to the developed regions of Malaysia and Singapore. With traditional banking services out of bounds for millions, it goes without saying that unconventional transactional practices like mobile payments are destined to dominate this region. According to market research firm, Accenture, the private consumption for the region is expected to double to $2. 3 trillion by 2020 while Euromonitor predicts $32 Billion worth of mobile payments to be made in 2021. All these developments are attracting global investors to this particular area of interest. One cannot deny another factor behind the boom of this particular sector, the advent of Cashless payment and mobile payments ibn China. Ant financial and Tencent Holdings are shoring up their resources in most of these countries, sensing the opportunity and this number shoots up to the billions, with payment centres spreading across Hotels, convenient stores, Departmental stores and more.
According to a Nikkei review report, Mike Ghasemi, research director at U. S. market intelligence firm IDC, mobile payments represent a chance to capture a large number of consumers who don’t have bank accounts. “Mobile payment can replace the low credit card usage among the unbanked demographic, and solve the major headwind for payments in emerging markets, ” said Ghasemi.
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