ORIGIN | Mobile payment solutions are taking off in Southeast Asia

By Suzanne Loo
3 min read
Aiza Azreen Ahmad, Director of Strategic Partnership, at TechNode Global’s ORIGIN conference on June 21, 2019. (Image credit: TechNode)

TechNode gathered four industry experts at its ORIGIN conference, during Malaysia Tech Week 2019, for a discussion of “Payment Solutions in Southeast Asia.” Kenneth Tan, CEO of the cross-border business matching engine company BEAM  and moderator for the panel, began the discussion with a question: “What is the landscape like for payments in Southeast Asia? Who do you think is going to be the dominant player? And will Grab simply kick everyone’s ass?”

A payments boom

“Every country has at least 30-40 e-wallets. Competition is definitely going to be high in Southeast Asia because of the low barriers of entry,” said Jeremy Wong, Head of Partnership at e-commerce company FAVE. Aiza Azreen Ahmad, Director of Strategic Partnership at lifestyle e-wallet company Boost, said: “For Malaysians today, I’m sure your phones would easily have three e-wallets.”

However, Ahmad said that adoption rates of cashless payment among both merchants and consumers are worryingly low. Given the competition and adoption rate in Southeast Asia, digital payment solutions are still a work in progress. Despite the growing number of players providing mobile payment solutions, Patrick Ngan, CEO & Co-founder of mobile payment technology, service and solution provider QFPay (Qianfang), said that mobile payments in Southeast Asia are just starting to take off and that this region is still barely scratching the surface.

Ngan said that the key to surviving in this region is to establish strong partnerships with the existing dominant players. “Mobile payment eventually should not be restricted to Southeast Asia. Instead, companies should all aim to transcend their own borders to truly succeed. Mobile solutions should be borderless,” said Ngan.

QR codes VS near field communication

While it seems like QR code payment may be the future, Wong cautions that it is not necessarily suitable for all countries in the region.

Obstacles

Since e-wallets are relatively new to this region, Wong said, regulations are lagging behind adoption. “The regulations around e-wallets need to be loosened for them to see greater adoption among merchants and consumers,” said Ahmad. Ngan also emphasises that getting the blessing of the government is very important, as they play a big part in pushing the initiative and making adoption easier.

Left to right: Jeremy Wong, Head of Strategic Partnership at Fave; Aiza Azreen Ahmad, Director of Strategic Development at Boost; Patrick Ngan, CEO and Co-founder at QFPay; and Kenneth Ho, CEO at BEAM. (Image credit: TechNode)

Learning from China

When asked what lessons Southeast Asian companies can learn from China, Ngan said that companies shouldn’t think about learning from China—but what knowledge and insights they can share. Although the technology behind mobile payment and e-wallets may be the same, he said, the differences between Southeast Asian and Chinese cultures and markets meant that companies cannot simply duplicate their strategies. Rather, there is a need to localise the system to meet the market.

Ahmad said that she admired China’s bravery, citing the recent investment by Alipay into Touch and Go as an example of the risks that China companies were willing to take.

Threatened by giants?  

China’s digital payments companies are titans—and their looming presence in Southeast Asia casts a shadow over local firms. However, although our speakers recognised their presence as a threat, they did not emphasize competition with international players.

“Competition can help us to educate the users, and we welcome that,” said Ahmad. “When Boost first started, we were struggling. But, with greater competition, our company began growing.” Likewise, Ngan said that focusing on China and the competition that they bring would be generating unnecessary worries.

“I often tell my team to forget about the competition and do what you do best. Focus on what you are asked to do and focus on developing the product. If you do a very good job in both, people will naturally use your product because it is well developed,” exclaimed Ngan.

Wong encouraged Southeast Asian digital payment companies to take heart, saying that the war is not lost just because Chinese companies are pouring investments into the region. Rather, he said, the key in the Southeast Asian market is to understand what locals want and understand what merchants need.