Unfolding the payment behaviours of Southeast Asians

Southeast Asia is now open to more options of payment. However, the lack of awareness about the options resulted to limited online payment usage in micro-sized businesses and rural areas. Many efforts have been done to narrow down the gap where we can even see e-wallet options getting accepted in retail stores.

But, is it the right time for Southeast Asia to move to e-wallet? How about the parts that has not even been reached by online payment? Let’s see how the pattern has become recently.

More unfolds of Southeast Asia

The greater digitalization that took place in Southeast Asia has become the reason why the region is one of the strategic location for data centres - which will soon nurture many other business opportunities. This is also a sign that the population here has been digitalized and ready for a massive online penetration.

Payment Behaviours in Southeast Asia

We wrote our detailed overview about the same topic last year since you might want to read it. So, here is the follow-up to look at how we have grown over the past year.

Malaysia

Malaysians has been using real-time payment actively in their online shopping activity. It connects to the major banks which lead to an increase of 283.3% volume in 2017. This is proven in the recent report that Malaysia has an overall higher e-commerce rate adoption (90%) compared to other markets in Asia Pacific.

However, cash still dominates in the physical retails and online-to-offline payment at convenience store - considering that cash withdrawal record remains high.

Preferred payment methods:

• Real-time online payment (FPX)
• Cash
• Internet Banking
• Credit Card

If we look into the trend, contactless payment has become a practical option loved by Malaysians which volume is totaled to US$23 billion last year, processed by Visa. This trend is expected to rise, together with a number of local e-wallet app entering the market, after Alipay’s entrance last year.

Indonesia

Debit purchases are popular in Indonesia and trends are expected to continue with more people to enter the banking system. Due to its large population, the fragmentation is even more complicated compared to its neighbours. In the past 2 years, it recorded 64% unbanked population and 10% cashless adoption.

It is recently reported by Bank Indonesia (BI) that 937,000 debit cards have been printed and 53% of them has been issued.

Preferred payment methods:

• Cash
• ATM Transfer
• Debit Card
• Online banking

This year, the country’s government has been actively pushing the use of national payment gateway to allay its people’s fear of online frauds. Its interbank cost was also cut off to encourage online and cashless transactions, which is also a friendly approach to the localites.

Singapore

Singapore is famous for being a business tourism destination, with 40% of its receipts are contributed by business purposes. It has an easy connectivity to Asia Pacific and strong network infrastructure. With its stability in business, financial and political, it has made the population and even the visitors to find it easy to perform their business and transaction in the country.

Preferred payment methods:

• Credit Card
• Debit Card
• Cash
• ATM Transfer

Recently, it is reported that hawkers have started to accept QR code payment in Singapore. However, credit card is still the preferred option before the authority has fully set up a unified payment system, which is now in the planning.

Thailand

Thailand has been greatly improving its market by incorporating tech initiatives in the traditional markets. Other than that, its series of digital banking services launches have resulted to the rise of e-payment transaction to be faster than expected. Not only that, the number of merchants who have registered for QR code payment has reached 2 million and expected to rise.

Preferred payment methods:

• Cash
• Internet Banking
• Payment via Electronic Data Capture (EDC)
• ATM Transfer

Thailand’s value of e-commerce market is expected to reach 3.06 trillion baht this year, which is 8.5% increase from last year. Hence, they will focus on educating more customers and raise the awareness for the newer option of payment, such as QR code payment.

Philippines

The cashless transaction growth in the Philippines are very encouraging. Majority of the respondent are eager to pay without cash but were held back due to lack of internet and bank connectivity. Compared to its neighbours, Filipino views cashless transaction faster, more convenient and faster.

Preferred payment methods:

• Debit Card
• Credit Card
• Prepaid Card
• Cash

Even though some retailers have started accepting cryptocurrencies including bitcoin, customers of micro-sized business still transact with traditional methods. However, the positive attitude of its people will soon turn the traditional practice to digital due to its high digital adoption and request from customers.

Vietnam

It was reported that cash is used in 90% of payment transaction, which still represents a massive majority. However, the adoption rate of the digital payment has been very encouraging. They also expect to lower down the cash payment to be below 10% by 2020.

Preferred payment methods:

• Cash
• Debit Cards
• Online Banking

Vietnamese are more prone to localized approach, hence, it is very important for investors or innovators to understand the market. However, with the ASEAN movement towards the digital economy, Vietnam will further boost the business up to 20-22% next year.

Southeast Asia will be the pool of e-wallet users

Recent statistics has proven that the countries in Southeast Asia will see at least 30% increase in four years from now. There are many e-wallets starting to hit in the market almost every day and each e-wallet has gained its very own users. An e-wallet could reach to 300,000 users in Malaysia within 2 days after its launch. With the entrance of Alipay last year, Chinese tourists can even rely on their e-wallet while travelling now.

The urgent need to integrate
High economic growth rate and digital adoption are making ASEAN more attractive. It can be concluded that these markets have its different points to be approached. It is also proven that this change of behaviours and preferences should also be supported by many parties, especially the authority.

In the areas where cash are still king, merchants should encourage the customers through online-to-offline approach and raise the awareness about the improved speed of online transaction. This should be done with a sense of urgency due to more innovative options have started to dominate the market.

For more information about Southeast Asia payment methods, read here. Feel free to contact us for more information about our Southeast Asia payment gateway.