The Race For Mobile Payments In Southeast Asia Is Heating Up

Mobile payments adoption in Southeast Asia will increase over the next five years, creating revenue opportunities for the region’s mobile operators, banks, credit card networks, and financial technology startups, according to a new Forrester report. Driving this growth is the surging smartphone penetration (Forrester forecasts the local smartphone installed base to grow from 175 million units in 2015 to 230 million units by 2017), a booming market for digital content and favorable government policies, spurring an array of new players to enter the Southeast Asian mobile payments arena.

In the report, Forrester highlights the following key mobile payments trends for Southeast Asia:

• Remittances continue to spur peer-to-peer (P2P) payment growth in emerging markets. Third-party money transfer networks are increasingly disrupted as migrant workers turn to telcos and fintech startups such as Xoom, Remitly, TransferTo, TransferWise, and MatchMove to remit money via their mobile phones.
• Cross-border mCommerce is putting remote payments on a growth trajectory. In countries like Singapore and Malaysia, many online consumers are shopping on their mobile devices, with a significant percentage of sales coming from cross-border orders using credit cards and PayPal.
• Growth in P2P and remote payments are setting the stage for digital wallets. More players are incorporating features such as coupons and loyalty rewards into their mobile payment systems, which somewhat resemble digital wallets but do not qualify as such — yet. Nabilah Alsagoff, founder and COO of Doku, told Forester  the firm is starting to build loyalty and reward functionality into Doku Wallet as a complement to bill, remote, and in-person payments in Indonesia.

Banks looking to get in on the mobile payment opportunity must decide if they want to build their own mobile payment systems or partner with business/technology vendors. Having a clearly defined mobile payment strategy will protect and deepen the bank’s relationships with both retail and business customers.

Forrester has also published a second report on the vendor landscape on mobile payment partners in the region. Here’s a summary of the vendors included in this second report:

You can read more about the research in Researcher Zhi Ying Ng’s blog here.