Payment trends in Southeast Asia

22 June 2018

The majority of consumers in Southeast Asia do not have a bank account. This has created two very different trends across the region. We have selected two articles that focus on each of these major trends, and explain why Southeast Asian business owners need to be aware of them when engaging with consumers in the region.

How bitcoin and cryptocurrencies went from Wall Street to the high streets of Southeast Asia

While the usage of cryptocurrencies is growing across Southeast Asia, many businesses are yet to embrace the potential and implement cryptocurrencies in their operations. Currencies such as bitcoin have been in use in developed countries for a number of years. However, in Southeast Asia cryptocurrencies are being used not to generate wealth, but to help businesses lower the cost of operations, which translates to lower interest rates to help the poorer communities develop. Over 70% of Southeast Asians do not have a bank account, but spend more time on their smartphones than US or European consumers, which creates further opportunities for cryptocurrencies in the region. Initial coin offerings (ICOs) are also helping poorer Southeast Asian countries to raise funds by allowing companies to create and sell their own virtual currency in exchange for cash or other, more widely accepted cryptocurrencies. Consumers can then use this money to pay for the company’s goods or services or put it towards investment.

Read the full article on the South China Morning Post website.

Mobile payment firms struggle to dethrone cash in Southeast Asia

Online shopping is growing at a fast pace across Southeast Asia. However, the majority of consumers in this region still prefer to pay with cash. Over 70% avoid banks or mobile payments due to a lack of knowledge of how to use them. As a result, cash on delivery for e-commerce transactions remains the most popular payment method. The two main reasons why Southeast Asian consumers are unwilling to switch to mobile payments are 1) the prevalent view that there is no point in having a bank account and 2) low internet speeds. The preference for cash payment is a major concern for businesses in the region as it contributes to higher operations and logistics costs. This means that businesses need to either make cash payments a part of their strategy or offer alternative payment methods that have ease of use equal to or better than cash.

Read the full article on The Insider website.

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