Southeast Asia’s Cross-Border Real-Time Payments Network Emerges with Payments Innovation as Driving Force, New Research fr...
June 24 2020 - 10:00PM
Business Wire
New report envisions the development of
Southeast Asia’s pan-regional real-time payments ecosystem
Southeast Asia is emerging as a global focal point for
cross-border real-time payments growth, with ISO 20022 and QR codes
as key drivers, according to Envisioning a pan-regional real-time
payment ecosystem in Southeast Asia. The new research, published by
ACI Worldwide (NASDAQ: ACIW) and financial technology market
research and consulting firm Kapronasia, reveals real-time payments
innovation as a key enabler for Southeast Asia as the region
pursues economic recovery and further digital transformation as a
result of COVID-19.
Southeast Asia, as represented by the intergovernmental
Association of Southeast Asian Nations (ASEAN), saw total
merchandise trade grow from US$1.2 trillion in 2005 to US$2.8
trillion in 2018, with a quarter related to intra-ASEAN trade.
Growth in eCommerce has been even more pronounced, rising from
US$11 billion in 2017 to US$24 billion in 2018, while the overall
internet economy is projected to triple in size by 2025 and reach
US$300 billion.
Increasing regional and global trade, paired with the
rapid-growth internet economy, has led stakeholders to focus on
deeper integration of financial services and put in place the
foundations for a pan-Southeast Asia real-time payments ecosystem.
Standardized, instant and seamless payments could boost
intra-regional economic activity at a lower cost — and encourage
future growth across the region.
“Southeast Asian countries are making significant strides in
payments modernization, with nearly every major country in the
region having robust domestic real-time payments infrastructure in
place,” said Leslie Choo, managing director – Asia, ACI Worldwide.
“Despite the lack of uniform regulations and disparate economic
priorities across the region, it’s clear that market forces —
driven by the needs of businesses and consumers — will propel
Southeast Asia towards the realization of a multi-country real-time
network. It is a complex undertaking, but one that ACI is committed
to supporting through market-proven solutions for banks and central
infrastructures. The emerging ecosystem promises significant
benefits and will greatly support growth and economic prosperity in
the broader region.”
Adoption of the ISO 20022 standard is already enabling more
streamlined communication between payment systems and additional
overlay services like DuitNow in Malaysia, PayNow in Singapore and
PromptPay in Thailand. Standards and technologies such as ISO 20022
and QR codes are among the critical enabling components that
provide essential “on-ramps” to drive usage and participation in
these schemes.
“Consumers across Asia have been quick to adopt real-time
payments — delivered through a broad range of overlay services —
because of the convenience and functionality they offer,” said
Zennon Kapron, founder & director, Kapronasia. “Unencumbered by
legacy payment systems, which can impede innovation in many mature
markets, Southeast Asian countries are starting to leverage
domestic central payment infrastructures as a basis for
cross-border linkages for both retail and commercial real-time
payments. The massive payment system modernization already taking
place across Southeast Asia will result in further bilateral
cross-border linkages, which will eventually coalesce into a larger
payment network.”
The new paper outlines key learnings for banks and central
infrastructures (CIs), including:
Banks
- Banks that implemented short-term solutions to gain access to
real-time payments rails are now taking a longer, more strategic
view. Adopting a more agile approach will be key to their success
and help extend real-time payments and related overlay services
into the SME/merchant space.
- Continual system upgrades will be needed for banks and
financial institutions to remain compatible with emerging
cross-border electronic transfer networks.
- Increasing competition from fintechs, for example in
cross-border remittances, is putting cost pressure on banks;
value-added services that can be layered on top of payments will
become increasingly important as revenues shift from payment fees
to ancillary services.
Central Infrastructures
- Working with proven technology providers and leveraging
standards such as ISO 20022 will help CIs to transition to a
pan-regional cross-border payment network while retaining
extensibility for future upgrades and extensions.
- Meeting individual country compliance requirements and
considering future regulatory plans will be a critical challenge
for CIs as a regional network emerges.
- Standardized interfaces make it easier for merchants, billers,
fintechs and intermediaries to access and leverage the value of any
platform — open APIs will be key to ensuring that technology is not
a barrier to adoption.
“The cross-border payments market in Asia is shifting rapidly,
as market dynamics, growing competition and an increasingly
demanding customer base drive change,” continued Choo. “As payment
systems continue to modernize and the market innovates, it is
important for banks and governments to stay on top of trends.”
Download the complete paper “Envisioning a pan-regional
real-time payment ecosystem in Southeast Asia,” from Kapronasia and
ACI Worldwide: www.aciworldwide.com/SEAreport
About ACI Worldwide ACI Worldwide, the Universal Payments
(UP) company, powers electronic payments for more than 6,000
organizations around the world. More than 1,000 of the largest
financial institutions and intermediaries, as well as thousands of
global merchants, rely on ACI to execute $14 trillion each day in
payments and securities. In addition, myriad organizations utilize
our electronic bill presentment and payment services. Through our
comprehensive suite of software solutions delivered on customers’
premises or through ACI’s private cloud, we provide real-time,
immediate payments capabilities and enable the industry’s most
complete omni-channel payments experience. To learn more about ACI,
please visit www.aciworldwide.com. You can also find us on Twitter
@ACI_Worldwide.
© Copyright ACI Worldwide, Inc. 2020 ACI, ACI Worldwide, the ACI
logo, ACI Universal Payments, UP, the UP logo and all ACI
product/solution names are trademarks or registered trademarks of
ACI Worldwide, Inc., or one of its subsidiaries, in the United
States, other countries or both. Other parties' trademarks
referenced are the property of their respective owners.
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