Long before we learnt about the coronavirus, digital money had already been gaining currency with consumers, small businesses and large institutions in recent years as it facilitates transactions in a fast-changing world driven by the forces of globalisation, urbanisation and digitisation.
Closer to home, the adoption of digital payments has been particularly rapid in ASEAN due to the region’s young and highly-connected population. In the 2019 Citi and Imperial College’s Digital Money Index, which tracks 84 countries and their digital money readiness, we saw five out of six ASEAN countries move up the ranks in the five years between 2014 and 2019. Reflecting this trend, Southeast Asia’s Internet economy has more than tripled in size over the last four years, according to the e-Conomy Southeast Asia 2019 report by Google, Temasek Holdings and Bain.
Recognising the opportunity presented by the propensity of the population to adopt digital payments, and their evident role in driving financial inclusion, governments in ASEAN have been fast transforming their payments systems. Indeed, seven of the grouping’s 10 countries have already rolled out sophisticated real-time instant payments systems, in addition to upgrading their core payment infrastructure.
For instance, the Singapore government introduced PayNow in 2017, a platform that allows customers of participating banks to perform instant peer-to-peer transfers with each other simply by entering a mobile or personal identification number. A year later, an enhancement to the platform, PayNow Corporate, was introduced to allow businesses and government agencies to pay and receive funds instantaneously using a Unique Entity Number (UEN).
Across the causeway, the Malaysian government announced in its latest Budget that it will provide all eligible Malaysians with a one-off RM 30 incentive to speed up the adoption of e-wallet usage in the country. Financial Process Exchange (FPX), the country’s new 24/7 real time payments platforms, has already clocked 174.2 million transactions in 2019 alone.
Not far behind, PromptPay in Thailand has 49.4 million registered users, which is approximately 70 per cent of its population as of January 2020 3 . Similarly, we are seeing rapid progress in Indonesia (ATM Prima), Philippines (Instapay) and Vietnam (NAPAS).
These developments are just part of an ongoing evolution of the real-time payments landscape in ASEAN that will see more advanced features being introduced to enhance the payments experience. This will drive a proliferation of use cases, which will in turn, drive even more usage, creating a virtuous cycle. One such feature is a Request-to-Pay function that gives companies an easy way to collect from consumers and businesses, and is already available in two countries, Thailand and Malaysia.
Meanwhile, the tokenisation and the use of a standardised QR code that have been adopted by many countries across their payment systems create a user-friendly environment for consumers, such as eliminating the need to share your bank account details with others.
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