Fintech is transforming financial products and services at a rapid rate around the world. The Asia Pacific region is the most obvious example of the transformation, and the payments industry is a perfect example of what is happening. This strategy brief will use case studies to illustrate how fintech through digital payment platforms has fundamentally changed the payments industry. The categories discussed are mobile payments and wallets, remittances and mobile point of sale.
Governments in many Asia Pacific markets have made going “cashless” a key priority in recent years, and we are now seeing positive results from previously adopted regulations. Cash use is down throughout the region, more consumers are banked, and competition has increased in financial products and services.
In developed Asia Pacific markets, competition has intensified as markets are flooded with payment platforms. This has rapidly increased adoption and made companies look to reduce costs and provide additional value to payments.
Traditional financial institutions’ approach to determining creditworthiness resulted in many qualified consumers not having access. Fintech’s development of alternative measures, like shopping behaviour, might provide a better guide.
Throughout the region, younger consumers have more disposable income, greater access to technology and a better understanding of how to use it. This will ensure continued growth of fintech throughout the forecast period.
A strong economic performance throughout the region over the past decade is producing a large middle class in the region. This consumer segment is fuelling the need for financial products and services.
Digital payment platforms are increasing the value of transactions by leveraging the data created. This additional value can be distributed to merchants to increase acceptance, and to consumers to increase adoption.
Many successful fintechs have become regional and international companies, with customers around the world. A clearer regulatory environment is breaking down borders and providing greater opportunities for expansion.
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