The impact of fintech over the past five years has profoundly transformed the financial services and payment space globally. The region that has been impacted most is Asia Pacific, which, as the largest region for payments, population and economic output, has created the framework for others to follow.
The Asia Pacific region provides the most obvious and dynamic example of this transformation as digital payment platforms have fundamentally changed the payments industry. This strategy briefing spotlights three platforms: mobile payments and wallets, international money transfers and remittances and mobile points of sale.
Fintech in the mobile payments and wallets space has not transferred value from traditional payment players. Instead, it has created additional value. Beyond enhancing the consumer purchasing experience, shopping and post-purchase processing have improved as fintech provides an open and consistent line of communication between the merchant and consumer.
When it comes to international money transfers and remittances, companies like Transwap and Bitspark have increased the simplicity and reduced the cost of transferring funds internationally. There is greater potential for this field in other regions, and continued disruption is inevitable.
Removing barriers to merchants accepting cash alternatives has always been a central issue in payments. Fintech solutions within the mobile points of sale space increase the convenience and overall security of consumer payments. The technology that will prove most popular among consumers may differ by region and country. With several cost-effective solutions, more and more merchants will be able to move away from cash, adding to the consumer purchasing experience.
The companies which constitute fintech have expanded and cover a wide range of products and services. They are relatively young and have developed solutions in areas where traditional financial institutions offer inadequate services or are unable or unwilling to address.
This can make fintech either complementary to or in direct competition with traditional financial institutions. The relationship between fintech and banks in these markets varies on the spectrum in Asia Pacific, as it does globally, and is determined by a number of factors.