The payments landscape in Asia Pacific (APAC) is rapidly evolving due to the integration of advanced technologies, increasing use of alternative payment methods, and the rise of digital currencies.
New Analysis from Forrester Explore This dynamic ecosystem highlights the key trends and innovations that are transforming the payments landscape.
Integration of cutting edge technologies
The report highlights the innovative payments landscape in Asia Pacific, which has evolved from QR code payments in China to the integration of AI and blockchain, with AI in particular transforming payment processing, enhancing transaction speed, accuracy, security, customer experience and fraud detection, the report said.
For example, Visa Use Since 1993, the company has developed AI-based technologies for risk and fraud management. Today, the company Some There are 100 AI models in production that power more than 100 products. Klarnaa buy now, pay later (BNPL) leader; Fiserva global fintech and payments company, is leveraging AI to deliver personalized shopping experiences, streamline the payment process and enhance security.
In Japan, three megabanks – Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group – are conducting trials of blockchain technology to enable real-time international payments, with the aim of commercializing it in 2024, reports the Nikkei newspaper. Reported It is scheduled to be released on September 5, 2024. In the future, the system is expected to be used by consumers and also handle corporate transactions.
The rise of alternative payment methods
Forrester’s report also highlights the growing importance of alternative payment methods beyond QR codes and digital wallets, noting that innovations such as biometric payments, buy now, pay later (BNPL) schemes and mobile payment solutions such as Apple Pay and Google Pay are becoming increasingly popular.
In particular, BNPL has seen a surge. 1.6% of e-commerce payments in 2022 To 4.4% in 2023According to GlobalData, BNPL is predicted to reach 7.7% by 2028, especially in markets with limited access to credit such as India.
Biometric payments, which use facial recognition or other biological characteristics for authentication, are also on the rise. For example, biometric payments are already widely used in China, where services such as Alipay have been using facial recognition for payments since 2015.
Juniper Research predicts that global biometric payments will grow by more than 100% between 2024 and 2028, $3 trillion Introducing secure mobile biometric payments by 2025.
Asia Pacific leads the world in digital wallet adoption: Last year, 70% of online payments and 50% of in-store payments in Asia Pacific were made with digital wallets, the highest of any region. According to Total spending on digital wallets in the region is set to reach nearly US$10 trillion in 2023, with China leading the majority of the spending, according to a new report from payment processing company Worldpay.
Digital Currencies and Stablecoins
Finally, the Forrester report notes that stablecoins, digital currencies pegged to traditional assets such as the U.S. dollar, are gaining momentum in the Asia-Pacific region.
March 2024: Southeast Asian super app Grab Teamed up The company has partnered with payments firm Triple-A to enable users to make payments in cryptocurrencies including Bitcoin, Ether, StraitsX’s Singapore dollar-backed stablecoin XSGD, and Circle’s USDC stablecoin.
Global payments company Circle Internet Financial I believe The company argues that stablecoins are particularly promising in the Asia-Pacific region, where many people lack access to traditional banks and rely on digital apps for financial transactions. The region is also leading the way in digital asset adoption, it claims, accounting for 29% of the value of digital currencies received in 2022, ahead of North America’s 19% and Western Europe’s 22%.
As stablecoins grow in popularity, regulatory frameworks are being developed across the region.
In Singapore, the Monetary Authority of Singapore (MAS) regulates stablecoins through the Payment Services Act. In August 2023, the regulator built on existing rules to allow stablecoins to be issued. Suggested A framework for establishing MAS-regulated stable coins. In Japan, the rules for stable coins are Came The rules will come into force in June 2023. These rules aim to strengthen oversight of stablecoins in the country and ensure their stability and security. Finally, in Hong Kong, financial regulators Plan The stablecoin bill is expected to be submitted to the Legislative Council later this year.
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