Supercharged by the pandemic, digital transformation has been accelerated, fuelling the shift to cashless payments and greater innovation in digital technology. Backed by a projected consumer base of 623 million people by 2030, Southeast Asia, the fourth largest global economy, presents an exciting landscape for digital finance. This idea was presented during the 2023 CamTech Summit by Angela Lim, Executive Vice President for Product Development at Liquid Group.
In her presentation entitled "A New Era in Payments”, Lim noted that the digital payment industry in Southeast Asia is expected to reach USD $1.5 trillion by 2030, while initiatives like the Financial Transparency Corridor (FTC) between the Monetary Authority of Singapore and the National Bank of Cambodia will facilitate trade and financial services between the two countries in the future. Liquid Group, a major payment institution in Singapore regulated by the Monetary Authority of Singapore, offers services related to payments, account issuance, merchant acquisition, and domestic and cross-border money transfers. Speaking with B2B Cambodia at the CamTech Summit, Lim mentioned that her trip to Cambodia included talks with local Cambodian banks such as ABA Bank and Acleda Bank to explore potential areas of cooperation.
Digital Payment Trends In Southeast Asia
Lim identified three significant trends impacting the future of payments in Southeast Asia:
- Digital Transformation Accelerated by the Pandemic: The pandemic-induced digital shift has led to increased adoption of digital financial products. Examples include the use of digital platforms for COVID-19 financial aid in the Philippines, and Thailand's PromptPay service. Singapore's Hawker Go Digital program also encourages contactless QR payments among hawkers.
- Inclusion and Trust in Digital Payments: A study by Visa shows a high adoption rate of cashless payments in Southeast Asia, with a significant number of consumers preferring cashless methods. This trend supports the move towards cashless societies.
- Growth of Mobile Phone Usage: The increasing prevalence of mobile phones facilitates the use of more banking tools.
QR Payments On The Rise
QR payment systems are gaining traction in Southeast Asia, with examples such as SGQR in Singapore, PromptPay in Thailand, Maya Pay in the Philippines, and Bakong (KHQR) in Cambodia. Lim also highlighted the significant growth of QR code payments in China and India. "When we walk down the streets of China or India now, it becomes very apparent that QR is the main way to pay,” said Lim. “It's woven into everybody's life. QR code payments can greatly reduce the cost of acceptance and integration. There is no need to invest in rent and payment terminals."
Cross-Border Payment Solutions
Lim underscored the importance of creating platforms for simpler and cheaper cross-border payments. Initiatives like the PayNow-PromptPay linkage between Singapore and Thailand, and similar linkages with Malaysia, represent positive steps in this direction. Liquid Group also has a growing merchant base and plans to expand into the Middle East, South America, and the United States. The company seeks partnerships with banks and financial institutions to enhance QR network acceptance.
Financial Cooperation Prospects Between Singapore And Cambodia
Lim told B2B Cambodia that despite Singapore being more advanced than Cambodia in digital finance, she does not foresee any conflict in perspectives on priorities. "From the eKYC (electronic Know Your Customer) and eKYB (electronic Know Your Business (KYB)) perspectives, all that needs to be done is establish the agreed type of credentials so that we can ensure that all trades are legitimate,” she stated. Furthermore, she discussed additional documents that could be considered for business-to-business transactions, including invoices, bills of lading, and information from trusted third parties like logistics companies, service providers, or main distributors. "All of these are trusted credentials that we can leverage, and what Singapore is striving to do is also work with Cambodia in order to come up with some unified, trusted credentials,” commented Lim. “We are also working with the United Nations digital program, just to ensure that small and medium enterprises are also included in the financial stream."
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