Professional Documents
Culture Documents
PLATFORMS
October 2019
INTRODUCTION
MOBILE PAYMENTS AND WALLETS
REMITTANCES AND INTERNATIONAL
TRANSFERS
MOBILE POINT OF SALE
CONCLUSION
APPENDIX
REPORT DEFINITIONS
INTRODUCTION
▪ The impact of fintech over the past five years has profoundly transformed the Disclaimer
financial services and payment spaces globally. The region that has been Much of the information in this
briefing is of a statistical nature and,
impacted most is Asia Pacific, which, as the largest region for payments, while every attempt has been made
population and economic output, has created the framework for other regions. to ensure accuracy and reliability,
The companies which constitute fintech have expanded, and cover a wide range Euromonitor International cannot be
held responsible for omissions or
of products and services. In this report, the focus is on digital payment solutions, errors.
which will be covered by a series of case studies across the Asia Pacific region. Figures in tables and analyses are
calculated from unrounded data and
To further narrow the definition of digital payment solutions, the three categories may not sum. Analyses found in the
that are covered are mobile payments and wallets, international money transfers briefings may not totally reflect the
and remittances, and mobile points of sale. The innovative companies covered companies’ opinions, reader
discretion is advised.
are relatively young companies that have developed solutions in areas which Fintech is transforming
traditional financial institutions offer services which are inadequate in some financial products and services
respect, or areas which have been either unable or unwilling to address. This at a rapid rate around the world.
can make fintech either complementary to, or in direct competition with The Asia Pacific region is the
most obvious example of the
traditional financial institutions. The relationship between fintech and banks in transformation, and the
these markets varies on this spectrum in Asia Pacific, as it does globally, and is payments industry is a perfect
determined by a number of factors. example of what is happening.
This strategy brief will use case
Digital payment studies to illustrate how fintech
through digital payment
platforms platforms has fundamentally
changed the payments industry.
The categories discussed are
mobile payments and wallets,
Mobile payments and International money
Mobile points of sale remittances and mobile point of
wallets transfers and remittances sale.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 3
INTRODUCTION
▪ The most prominent factor in the development of Asia Pacific Markets Policy Effectiveness
fintech is the regulatory environment, as this can Score 2018
determine which companies are able to perform 5.0 50
which functions. Globally there is a trend to reduce
restrictions and increase access to who can 4.5 45
perform which function, but in many markets,
4.0 40
financial institutions are viewed as a matter of
national security, and are therefore partially or fully 3.5 35
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 4
INTRODUCTION
Mobile payments and wallets Remittances and international Mobile point of sales
money transfers
▪ This category has received a ▪ The limitations of international ▪ A leading hurdle to financial
great deal of attention, because money transfers a decade ago card adoption in Asia Pacific
it is converting cash and made the practice expensive has been the lack of merchant
reaching unbanked consumers and inefficient. The rapid acceptance. This lack of critical
throughout developing markets evolution of mobile devices and mass in turn greatly reduced the
in Asia. Many technology international networks has incentive for merchants to invest
companies and retailers have greatly reduced this cost, and in accepting financial cards.
filled a void left by traditional provided all income segments Fintech has transformed this
financial institutions. However, with simple and low-cost dynamic by lowering the
as the category develops, there options. We have also seen infrastructure cost for merchants
are more partnerships between cryptocurrencies utilised as a to accept. QR codes also make
fintech companies and financial means to move money from accepting payments and
institutions creating a market to market and avoid the transferring funds available to
cooperative environment. On traditional fees. In Asia Pacific, anyone with a mobile device.
the other hand, online specifically, there has been an QR codes have been adopted
merchants are also providing increase in the number of guest more widely in Asia Pacific than
solutions, not necessarily to workers who send a portion of in any other region. This also
gain significant share in the their income to their home allows merchants in markets
financial services sector, but country. Fintech has made this with regulation that provides
rather to facilitate commerce to process easier and more incentives to utilise only cash
drive retail volume on their own affordable for a large segment alternatives to take part in the
marketplaces. of this population. benefit.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 5
INTRODUCTION
Key findings
Pursuit of going Governments in many Asia Pacific markets have made going “cashless” a key priority
“cashless” is in recent years, and we are now seeing positive results from previously adopted
working regulations. Cash use is down throughout the region, more consumers are banked,
and competition has increased in financial products and services.
Loyalty and rewards In developed Asia Pacific markets, competition has intensified as markets are flooded
driving fintech with payment platforms. This has rapidly increased adoption and made companies
adoption look to reduce costs and provide additional value to payments.
Rethinking Traditional financial institutions’ approach to determining creditworthiness resulted in
creditworthiness many qualified consumers not having access. Fintech’s development of alternative
measures, like shopping behaviour, might provide a better guide.
Demographic Throughout the region, younger consumers have more disposable income, greater
factors point to access to technology and a better understanding of how to use it. This will ensure
sustained growth continued growth of fintech throughout the forecast period.
Consumer demand A strong economic performance throughout the region over the past decade is
for financial services producing a large middle class in the region. This consumer segment is fuelling the
increasing need for financial products and services.
Digital payment Digital payment platforms are increasing the value of transactions by leveraging the
platforms increasing data created. This additional value can be distributed to merchants to increase
transaction value acceptance, and to consumers to increase adoption.
Fintech is taking a Many successful fintechs have become regional and international companies, with
regional approach customers around the world. A clearer regulatory environment is breaking down
borders and providing greater opportunities for expansion.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 6
INTRODUCTION
MOBILE PAYMENTS AND WALLETS
REMITTANCES AND INTERNATIONAL
TRANSFERS
MOBILE POINT OF SALE
CONCLUSION
APPENDIX
REPORT DEFINITIONS
MOBILE PAYMENTS AND WALLETS
▪ Due in part to its sheer population size, Consumer Payment Transactions: Southeast Asia
Indonesia is the largest market in Southeast Breakdown by Country 2014-2019
Asia in terms of consumer payment value. With
approximately 41% of the region being
unbanked, it is no surprise that cash is still king.
▪ Singapore stands out as the only market where
cards have leapfrogged cash. The country’s
advanced payments infrastructure has helped
promote the use of credit and debit cards.
Consumers value the speed, convenience,
security and rewards that card payments bring.
▪ Governments in the region are pushing for a
cashless economy. The Indonesian government
is investing in the development of a robust
infrastructure to support the growth of digital
payments. Bank Indonesia recently launched the
Quick Response Indonesia Standard (QRIS)
code system to boost interoperability between
the various digital wallets. Southeast Asia has
been a hotbed for fintech innovation. According
to a Google-Temasek study, fintechs in
Southeast Asia received USD500 million in
funding in the first half of 2018 alone, more than
twice as much in all of 2017.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 8
MOBILE PAYMENTS AND WALLETS
of USD14 billion.
▪ M-commerce in Southeast Asia experienced a
USD mn
20,000
more than six-fold increase in transaction value
over 2015-2019. Grab plans to capitalise on this
10,000
opportunity, demonstrating its ambitions to expand
its footprint in digital payments and financial
services in ways that address the region’s 0
unbanked and underbanked population. 2015 2016 2017 2018 2019
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MOBILE PAYMENTS AND WALLETS
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 10
MOBILE PAYMENTS AND WALLETS
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MOBILE PAYMENTS AND WALLETS
▪ Per capita disposable income is forecast to see Disposable Income per Capita
healthy growth across the region over 2019- 2020-2024
2024, with Malaysia, the Philippines and Vietnam 40,000 8%
expected to perform particularly strongly, with
30,000 6%
CAGRs of 4-6%. The region’s income growth,
% CAGR
USD
high smartphone penetration and huge 20,000 4%
unbanked population will drive demand for on-
10,000 2%
demand services and digital finance.
▪ M-commerce in Southeast Asia is expected to 0 0%
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 12
MOBILE PAYMENTS AND WALLETS
▪ China is the largest market in Asia Pacific by total China: Consumer Payment by Type
card payment value, at USD17.6 trillion in 2019, 2014/2019/2024
accounting for 80% of total card transaction value
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 13
MOBILE PAYMENTS AND WALLETS
Alipay/ANT Financial
1000
Million users
800
600
▪ Alipay, established by Alibaba Group and its founder 400
Jack Ma in 2004, is China’s leading third party 200
payment company. In 2014, Alipay rebranded as an
0
affiliate company of Ant Financial, which has raised 2013 2014 2015 2016 2017 2018
investment from CCB Fund, PICC Capital, China
Alipay Yu'E Bao
Post Capital, Alibaba, China Pacific Insurance and
others through multiple financing rounds. As of 31
M-commerce in China 2013-2019
March 2018, Alipay had 870 million users, becoming
1200000
the largest mobile payment service provider in the
world. It has played a key role in shifting the Chinese 1000000
payment landscape from cash to cashless, and has 800000
USD mn
influenced other countries by offering similar
600000
payment solutions and financial services, particularly
in Southeast Asia. Alipay has developed into an 400000
open platform, integrating multiple services across 200000
different industries, providing payment, bill payment,
0
government service, social networking financial 2013 2014 2015 2016 2017 2018 2019
management, insurance and investment services.
Mobile M-Commerce Proximity Mobile M-Commerce Remote
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MOBILE PAYMENTS AND WALLETS
▪ The unique connection with Taobao/Tmall paved the ▪ Following Yu’E Bao’s success, Alipay extended the
way for Alipay’s success. Alipay started as Taobao’s credit pay service Huabei (or Ant Check Later) to
online payment solution, processing all transactions its users in the latter part of 2014. Catering to
on the platform to solve the problem of trust among Chinese millennials’ growing “buy now, pay later”
users. Given the substantial transaction volume from lifestyle, Huabei offers credit of CNY500-50,000,
Taobao, Alipay took off early, with few competitors in with an interest free period of up to 41 days.
the market, and continued to see dramatic growth. In According to Alibaba’s public report in 2017, over
the following years, the company brought a number 45 million consumers were born in 1990 or later.
of innovations to financial services. Chinese users had registered for its credit pay
▪ Yu’E Bao, an investment service offered by Alipay service for online shopping.
since 2013, mainly serves as a financial product ▪ Huabei owes a large part of its success to its in-
integrated with an E-wallet function. It has almost no house credit score system – Sesame Credit. A lack
entry barrier in terms of deposit (CNY0.01) and of formal credit scores is one of the main reasons
processes payments simply as an embedded E- why younger Chinese consumers do not apply for
wallet. Thanks to the high return on funds and credit cards from formal financial institutions.
flexibility, Yu’E Bao has grown rapidly and has been Sesame Credit solves this problem by combining
able to reach millions of unbanked consumers. three different data points: shopping data from all
▪ Yu’E Bao has been successful because it competes the companies in Alibaba's ecosystem, data from
with traditional banks –most of which are state-run external cooperation agencies and self-submitted
and operate under strict government rules capping user information. Using the data, Huabei is able to
annual interest at 3.3%. Another factor is the create a consumer profile. This allows loans to be
unbanked population, for whom Yu’E Bao serves as granted more easily, and targets a large base of
a convenient method of deposit and earning interest. unbanked consumers previously overlooked by
traditional financial institutions.
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MOBILE PAYMENTS AND WALLETS
▪ Alipay’s potential is significant, given cash ▪ Total disposable income in China is expected to rise
alternative consumer payments have become by 34% between 2018 and 2023, from CNY54.2
standard. Because it was one of the first digital trillion to CNY72.6 trillion, which offers a significant
payment platforms, it has already accumulated a opportunity for the digital payment industry.
number of users who use the platform on a daily ▪ Apart from its core business, Alipay offers huge
basis. The company’s future potential lies with the opportunities in the payment industry by offering a
data behind the transactions, which can be further wider range of digital services, including insurance,
leveraged to expand into business units that can medical care, technology support and even
be incorporated into the consumer payment environmental protection, empowered by the
experience. Not only can the company improve the significant amount of data generated from shopping
online shopping experience for consumers, it can transactions.
provide valuable insight to the merchants that
operate on its various platforms. Disposable Income in China 2013-2023
80,000
▪ With the E-commerce market in China expected to
reach USD1.9 trillion at constant 2019 prices by 70,000
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 16
INTRODUCTION
MOBILE PAYMENTS AND WALLETS
REMITTANCES AND INTERNATIONAL
TRANSFERS
MOBILE POINT OF SALE
CONCLUSION
APPENDIX
REPORT DEFINITIONS
REMITTANCES AND INTERNATIONAL TRANSFERS
▪ The total remittance flows of Hong Kong (sum of Remittance Flows in Hong Kong
inflows and outflows) grew at a CAGR of 6% over 2008-2018
2008-2018, on the back of stronger migration 1,000
trends. This is expected to continue to boost 800
USD million
household incomes, enhance consumer 600
purchasing power and enable more spending on
400
non-necessities. The high cost of sending
remittances through mainstream financial 200
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 18
REMITTANCES AND INTERNATIONAL TRANSFERS
▪ Founded in 2015 by Benjamin Wong, Transwap is ▪ Founded in 2014 by George Harrap and Maxine
a fintech platform based in Singapore and also Ryan, Bitspark is a Hong Kong-native fintech
incorporated in Hong Kong, with operating platform that claims to be the “world’s first crypto
licensees currently in Singapore, Hong Kong and money transfer ecosystem”. The company
Indonesia. Focusing mainly on small and medium- promotes itself as a “bankless money transfer
sized enterprises (SMEs), Transwap allows ecosystem that enables businesses and people to
businesses to send money across 160 different cash in and cash out cryptocurrencies across Asia
countries and in 120 currencies in a seamless and and Africa”.
cost-effective manner.
▪ Bitspark builds on blockchain technology and uses
▪ Transwap’s proprietary online platform and API, cryptocurrency to “create a parallel financial
coupled with its network of foreign exchange system that allows for liquidity and direct
partners, allows it to offer more competitive rates settlement on nearly every currency in the world”.
than traditional remittance companies or banks.
▪ Bitspark’s network covers eight countries in the
▪ The company is backed by Quest Ventures, a Asia Pacific and Africa regions: Hong Kong,
venture fund based in Beijing and Singapore Malaysia, the Philippines, Indonesia, Vietnam,
targeting early-stage tech Internet start-ups. Pakistan, Ghana and Nigeria.
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REMITTANCES AND INTERNATIONAL TRANSFERS
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 20
REMITTANCES AND INTERNATIONAL TRANSFERS
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REMITTANCES AND INTERNATIONAL TRANSFERS
▪Domestic helpers are one of the main drivers of the remittance market in Hong Kong. Over the last
decade, their number has been growing at a much faster rate than that of the total population.
400000 6,000
‘000 people
Number
300000
4,000
200000
2,000
100000
0
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
▪ The number of domestic helpers rose by close to 60% between 2008 and 2018. Over the next three
decades, it is estimated that the number of domestic helpers needed in Hong Kong will rise to 600,000.
This is mainly due to the ageing of the population.
▪ As well as the ageing population driving higher demand for domestic helpers, growing internet penetration
will also provide a boost to the remittances market.
Source: Euromonitor International 2019, Hong Kong Census Bureau
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 22
REMITTANCES AND INTERNATIONAL TRANSFERS
▪ The share of the Hong Kong Hong Kong Population by Age 2019/2030
population accounted for 100%
consumers aged 65 years or
80%
over is predicted to increase
from 18% in 2019 to 27% in 60%
2030. This is expected to drive 40%
strong demand for foreign
domestic helpers, which in turn 20%
2,000
1,000
0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 23
REMITTANCES AND INTERNATIONAL TRANSFERS
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 24
REMITTANCES AND INTERNATIONAL TRANSFERS
Four main types of companies are currently active or are looking to become involved in the remittance
industry globally:
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 25
INTRODUCTION
MOBILE PAYMENTS AND WALLETS
REMITTANCES AND INTERNATIONAL
TRANSFERS
MOBILE POINT OF SALE
CONCLUSION
APPENDIX
REPORT DEFINITIONS
MOBILE POINT OF SALE
JPY billion
800
▪ LINE Pay Corporation is a group company of LINE
600
Corporation, owned by South Korean online
400
platform provider Naver Corporation. In 2014, LINE
Pay Corporation started an in-app payment 200
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 27
MOBILE POINT OF SALE
▪ LINE Pay credit can be used to pay for online and ▪ LINE Pay has also worked to expand offline and to
offline shopping, utility fees and insurance, and increase merchant acceptance by providing QR
allows consumers to send each other online credit. code functionality for free to merchants. Whilst the
▪ The fact that LINE Pay is highly connected with the Japanese government has been eager to expand
LINE app gives it an advantage over other non-cash payment methods, many SMEs have
competitors. Domestic active users of LINE been hesitant to invest in new POS systems or
numbered nearly 81 million per month by June card reader devices. LINE Pay provides
2019, which is over 64% of the Japanese specialised hardware, an app and printed QR
population. LINE is also widely used in some other codes that merchants can use, making acceptance
Asian countries, such as Taiwan, Thailand and
more convenient.
Indonesia. LINE Pay has been taking advantage of
this, transferring LINE users through various Global Monthly Active Users of LINE Pay
promotional campaigns, such as cashback and 8,000
rewards.
▪ LINE aims to provide a holistic marketing tool by
6,000
connecting the LINE for Business service (which
provides an official account for companies and
merchants) with LINE Pay. Each time consumers 4,000
place a purchase by LINE Pay it will automatically ‘000
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 28
MOBILE POINT OF SALE
▪ Since the Japanese government is keen to promote Personal Credit Card Transactions in
non-cash payment methods, transactions for Japan 2019-2024
personal financial cards such as credit cards, debit 800 8%
cards and pre-paid cards are expected to grow over
the forecast period. By 2024, personal credit card 600 6%
% value growth
transactions in Japan are expected to reach USD752
USD billion
billion, with a 5% CAGR between 2019 and 2024. 400 4%
The expansion of non-cash payment methods profits
some of the QR payment providers which allow 200 2%
users to link a code to a card or account.
▪ LINE Pay is in a unique position as a messaging 0 0%
app-based service, which no other competitor has 2019 2020 2021 2022 2023 2024
been able to copy so far. Transaction value Year-on-year growth
▪ Whilst LINE Pay has some advantages over other
players, competition is greater than ever in the QR ▪ As the QR code and mPOS markets are very
payment business. Over the past few years, multiple competitive, without any definite winner, such
players from various markets have been entering the promotions and campaigns seem to be inevitable
non-cash payment method business, such as for the business, but are risky. Over January-June
Paypay by SoftBank and Rakuten Pay by Rakuten. A 2019, LINE reported a huge financial deficit due to
few convenience store brands have also launched the “30 Billion Yen Festival” campaign, which
their own QR code payment services. Each of these promoted LINE Pay by providing LINE Pay credit of
brands has been running aggressive campaigns with up to JPY30 billion. The race has just started, and
high cash-back or reward points ratios to attract all players are still in the early stages of building a
consumers. loyal customer base.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 29
MOBILE POINT OF SALE
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 30
MOBILE POINT OF SALE
telecommunication companies.
▪ As South Korea is already becoming a cashless 120
society, and South Korean consumers are
highly tech savvy, mobile-based payment
100
solutions are rapidly increasing.
▪ In addition, Kakao Group has opened the digital
USD bn
only bank Kakao Bank, which is expected to 80
appeal to its Kakao Pay customers.
▪ Kakao Group has various other services, such 60
as Kakao Taxi, which is a platform to call a taxi,
and Kakao Shopping, which is an e-commerce
platform. Kakao Pay is expected to be 40
expanded along with Kakao Group’s other
businesses by being the exclusive payment 20
option. As Kakao offers a wide variety of
services and products, Kakao customers do not
need to use a variety of apps and can stay in a 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
single app for all their daily needs, whether it be
shopping, communication or transportation. Mobile M-Commerce Proximity Mobile M-Commerce Remote
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 31
MOBILE POINT OF SALE
▪ South Korean Consumers are tech savvy, and Card Payment Transactions in South Korea
the penetration rate of financial cards transaction 2014-2024
is already high. It is expected that digital mobile 900
POS will grow rapidly, as small merchants want 800
to reach more customers. 700
USD billion
600
▪ M-commerce in South Korea is predicted to
500
grow substantially, with a 20% CAGR over 2019-
400
2024, to reach USD256 trillion.
300
▪ Competition is expected to increase, owing to 200
the shift to retailing online, with many non- 100
traditional payment players entering the space. 0
With the popularity of Samsung Galaxy 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
smartphones in South Korea, Samsung Pay is
Leading South Korean Retailers 2015-2018
also growing rapidly, with its NFC-based
12%
payment solution. Although usage is limited to
users of Samsung devices, Samsung Pay can be 10%
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 32
INTRODUCTION
MOBILE PAYMENTS AND WALLETS
REMITTANCES AND INTERNATIONAL
TRANSFERS
MOBILE POINT OF SALE
CONCLUSION
APPENDIX
REPORT DEFINITIONS
CONCLUSION
Key findings
Pursuit of going Governments in many Asia Pacific markets have made going “cashless” a key
“cashless” is working priority in recent years, and we are now seeing positive results from previously
adopted regulations. Cash use is down throughout the region, more consumers are
banked, and competition has increased in financial products and services.
Loyalty and rewards In developed Asia Pacific markets, competition has intensified as markets are
driving fintech adoption flooded with payment platforms. This has rapidly increased adoption and made
companies look to reduce costs and provide additional value to payments.
Rethinking Traditional financial institutions’ approach to determining creditworthiness resulted
creditworthiness in many qualified consumers not having access. Fintech’s development of
alternative measures, like shopping behaviour, might provide a better guide.
Demographic factors Throughout the region, younger consumers have more disposable income, greater
point to sustained access to technology and a better understanding of how to use it. This will ensure
growth continued growth of fintech throughout the forecast period.
Consumer demand for A strong economic performance throughout the region over the past decade is
financial services producing a large middle class in the region. This consumer segment is fuelling the
increasing need for financial products and services.
Digital payment Digital payment platforms are increasing the value of transactions by leveraging
platforms increasing the data created. This additional value can be distributed to merchants to increase
transaction value acceptance, and to consumers to increase adoption.
Fintech is taking a Many successful fintechs have become regional and international companies, with
regional approach customers around the world. A clearer regulatory environment is blurring borders
and providing greater opportunities for expansion.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 34
CONCLUSION
Mobile payments and wallets Remittances and international Mobile point of sale
transfers
▪ Asia Pacific demonstrates the ▪ Transwap and Bitspark have ▪ Removing barriers to merchants
potential for mobile devices and increased the simplicity and accepting cash alternatives has
direct electronic or card reduced the cost of transferring always been a central issue in
payments. Fintech in this space funds internationally. These payments. Both the initial
has not transferred value from examples illustrate the potential investment in the POS terminals
traditional payment players – it for this field in other regions, as well as the fees have
has created additional value. and continued disruption is discouraged small merchants.
Beyond enhancing the consumer inevitable. Ultimately, traditional
Fintech solutions stand to
purchasing experience, fintech financial institutions stand to
increase the convenience and
has improved the shopping and lose a revenue stream from
post-purchase experience by fintech in this space if there are overall security of consumer
opening a consistent line of not regulations limiting which payments going forward. The
communication between the companies are able to exact technology that will prove
merchant and the consumer. participate in the space, or if most popular over the forecast
However, the increasing there are capital requirements period among consumers may
incentives provided to consumers or other restrictions that prevent differ by region and even by
by platforms to drive volume is fintech from entering. The country, but with several cost-
reaching unsustainable levels in introduction of cryptocurrencies effective solutions, more and
some markets, and may result in also has the potential to impact more merchants will be able to
an additional cost to the the security of transfers and move away from cash. QR in
consumer going forward. could negatively impact the Asia Pacific has a clear lead
customer experience. over alternatives in the space.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 35
CONCLUSION
▪ As covered in this briefing, there are a number of ▪ An alternative potential outcome for fintech, based
“super apps” that have the potential to provide a on the case studies in Asia Pacific, is a continued
range of services or products on a single platform: course of innovation and adoption by new
from communication, to booking a taxi, to financial companies that have yet to enter the space. It is
products and services. This certainly increases possible that instead of the convenience provided
convenience for consumers, as time is saved by to consumers by having all products and services
staying in a single ecosystem. Whether this model in a single place, consumers will instead chose the
prevails throughout Asia Pacific and then value of having smaller specialised companies that
throughout the world will depend largely on are able to provide a more premium product,
consumers’ willingness to trust a single entity. Data service or experience. Premiumisation as a
security is at the centre of consumers’ decisions, megatrend has included the rise of niche
and a single negative experience could send them companies that are able to compete directly with
elsewhere. Additionally, the line between providing large corporations, with quality and experience as
consumers with additional value through leveraging the key differentiating factors. This can equally well
their data and violating their privacy has been seen occur in financial products and services. While the
to be very thin. However, companies like Grab in current fintech wave of financial services is
Southeast Asia, Kakao in South Korea, and providing value through cutting fees, because they
Alibaba and ANT Financial in China suggest that have lower operating costs, the next generation
this balance can work, and competitors within each could have improved algorithms that can manage
industry should make partnerships or establish a or invest funds with a greater return, or make
similar set of products and services in order to financial decisions that will provide greater
remain relevant in the digital age. consumer value.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 36
INTRODUCTION
MOBILE PAYMENTS AND WALLETS
REMITTANCES AND INTERNATIONAL
TRANSFERS
MOBILE POINT OF SALE
CONCLUSION
APPENDIX
REPORT DEFINITIONS
APPENDIX
▪ For payment policy to be ▪ The cost of supporting paper ▪ There are two aspects of
considered effective it has to payment alternatives varies government involvement with
drive greater card or according to a country’s regards to a payment policy:
electronic payment value, infrastructure, but a policy can enforcement and direct cost.
while reducing overall paper determine who has to bear the The cost of enforcement takes
payments. As simple as this cost to further facilitate non-cash into account establishing an
may seem, many policies payments. The cost of a accountable entity for
adopted can have negative transition can fall on the enforcement, establishing
unintended consequences. consumer, the government, the punishment for violation, and
The effectiveness of a policy merchants, or on the card and establishing a method for
is rated on a scale of five in electronic payment players. For determining degree of success.
terms of the impact it has this particular ranking, the Direct cost takes into account
been able to have on payment players are considered how much of the transition the
reducing overall paper the card issuers and the card government sponsors. In a
payments without regard to payment networks specifically. In market where the government is
the cost it may impose. An the case of an EMV chip upgrade fully involved, it would subsidise
example of the most effective policy, a score for the highest card terminals for merchants,
policy would be banning cost going to card payment the issuance of cards and bank
paper currency, while an companies would be issuers re- accounts for consumers, and
ineffective policy might issue all cards to be compliant, create an agency that inspects
actually encourage paper and networks fund the update of the level of card or electronic
payment usage. merchant terminals. payment adoption at the POS.
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 38
INTRODUCTION
MOBILE PAYMENTS AND WALLETS
REMITTANCES AND INTERNATIONAL
TRANSFERS
MOBILE POINT OF SALE
CONCLUSION
APPENDIX
REPORT DEFINITIONS
REPORT DEFINITIONS
© Euromonitor International CONSUMER FINANCE: FINTECH IN ASIA PACIFIC – DIGITAL PAYMENT PLATFORMS PASSPORT 40
FOR FURTHER INSIGHT PLEASE CONTACT
Kendrick Sands
Head of Consumer Finance Research
Kendrick.sands@Euromonitor.com
CONTRIBUTING AUTHORS
Dorrit Chen, Analyst
Grace Chia, Senior Analyst
Simon Haven, Senior Analyst
Tatsunori Kuniyoshi, Analyst
Jade Lee, Analyst
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