With Southeast Asia’s booming digital economy projected to surpass the US$300 billion mark by 2026, digital payments continue to present tremendous growth opportunities for businesses, according to a new IDC report commissioned by global payments platform 2C2P and global membership association for payments and fraud prevention professionals Merchant Risk Council (MRC).
On the flip side, emerging threats and vulnerabilities create heightened fraud risks. Navigating this fast-evolving space requires companies to tap into the appropriate payments technology and security innovations to optimise growth and protect themselves and their customers from fraud.
The IDC Infobrief, “How Southeast Asia Buys and Pays 2022: New Opportunities, Connectivity, and Risks”, unravels the emerging opportunities and risks across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Key payments highlights:
- Digital economy spending will rise by 121% by 2026, and digital payments will grow to 92% of total digital economy payments by 2026, up from 80% in 2020.
- 426 million users in Southeast Asia will use mobile wallets by 2026, representing 62% of the total population.
- Buy Now Pay Later (BNPL) continues to grow in importance, with BNPL spending expanding by $9.8 billion, a 3.5X increase from 2021.
- Real-time-payments (RTP) will shape the future Southeast Asian payments landscape, with transaction values climbing 8X from US$1.428.6 billion to US$12,978.7 billion between 2021-2026.
- One in four Southeast Asia internet users were victims of fraud in 2021.
The need for businesses to support new payment methods, such as mobile wallets, RTP and BNPL, continues to create complexity in payments management and operations.
How payments are used in each Southeast Asian market also has its unique characteristics and, correspondingly, its unique vulnerabilities. Any business operating in the region requires a high degree of localisation and understanding to offer its customers the right payment options. At the same time, given the diversity of these markets and their different levels of risk, bad actors have fine-tuned their own activities to match the weaknesses.
The IDC Infobrief makes five recommendations for selecting a payments partner in 2022:
- Superior intra-ASEAN support, especially for cross-border payments
- Familiar with the intricacies of the region
- Ability to recognise and counterattack new threats
- Offers technology for more accurate authentication
- Global insight to stay on top of the latest threats and best practices
Julie Fergerson, CEO of the MRC, said, “Southeast Asia is full of exciting promise as its digital economy continues to soar to new heights. However, with the growth comes the emerging fraud menace threatening businesses and consumers across the region.
“Companies urgently need to develop resilient measures to counter the threat of fraudsters. This timely IDC Infobrief highlights suitable ways for businesses to reduce the risk of fraud by identifying the best payments partner to support their growth journey.”