Is APAC’s Desire to Lead Global Innovation in Digital Payments Working?
Asia Pacific (APAC) payments markets are poised for hearty growth on the back of innovative services and influential megatrends. Payments revenue will reach US$1 trillion around 2020 in APAC – up from $0.7 trillion in 2016 – and the market will be double the size of anywhere else on the globe. Fintech innovation, a large populace of unbanked, digital savvy millennials, instant payments, micro payments, mobile or e-wallets, artificial intelligence (AI) and contactless payments are burgeoning in the region. Nothing is as it was. Regulation is also supporting the market shifts.
Banks must evolve their core and focus on delivering a faster, seamless omni-channel customer experience in what will only become a more competitive market. This Tech Research Asia (TRA) report outlines the key payments trends that banks and payment service providers (PSPs) must address to win by 2020 and beyond. We’ve also included a handy checklist at the end of the document for banks and PSPs.
- Rapid change to real time to continue. Everyone wants and expects real time payments (both international and domestic) across Asia Pacific. Banks and PSPs with platforms that enable this to happen will find themselves in an advantageous position and will also be in a better position for open banking ecosystems.
- Changes in customer demographics and behaviours to accelerate. Across Asia Pacific consumers want a great payment experience that is secure, seamless, and convenient across whatever channel or device they want to use, wherever they are. Younger generations are driving and embracing payments innovation, but older generations are also changing. The unbanked are also going digital and mobile to access basic financial services.
- APAC will give birth to more new payments technology innovations than anywhere else by 2020. Users in the region also have an appetite and willingness to adopt new ways of paying. AI, open banking and the API economy, predictive analytics, mobile and contactless, blockchain and crypto currencies will all help further accelerate innovation as more providers jump into the payments’ industry.
- Great customer experiences coupled with security and convenience will be the key differentiator. Banks are urged to embrace technology advances and re-examine their core processes and business models to win customers and to monetize new revenue opportunities.