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The Sweeping Impact of Real-Time Payments in Southeast Asia

Boaz Gam

Boaz Gam


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Article content
  1. The Reasons Behind RTPs’ Popularity in Southeast Asia
  2. The Current Situation with RTPs Across SEA
  3. The Future of Real-Time Payments in Southeast Asia

Real-Time Payments in SEA: Current State & Future Trends

Due to their fast development pace and a variety of associated benefits, real-time payments are no longer an optional feature but rather an essential element of long-term success. As a result, they have gained wide recognition in the modern world and are revolutionizing the way transactions are conducted across the globe.

In this article, we will examine how exactly RTPs are transforming the payments landscape in Southeast Asia. Read ahead to find out how real-time transactions have achieved popularity across this vast region, which factors are promoting their growth, and what their future looks like!

The Reasons Behind RTPs’ Popularity in Southeast Asia

Real-Time Payments in SEA: Current State & Future Trends

The key event that has played a critical role in accelerating the growing adoption of real-time payments around the world and in Southeast Asia in particular was the COVID-19 outbreak. The pandemic has highlighted the need for fast and contactless digital payments, as people were trying to avoid physical contact and the use of cash.

Other significant factors that have contributed to the spread of RTP networks across SEA include:

  • Convenience. RTPs are more convenient than traditional payment methods like bank transfers or cheques, as they allow users to send and receive money instantly, 24/7, and internationally.
  • Lower transaction costs. RTPs typically have lower transaction costs compared to traditional payment methods, making them an attractive option for both consumers and businesses.
  • Security. instant payments offer a high level of security and protection against fraud, making them a safe way to transfer funds.
  • Growing eCommerce market. eCommerce in Southeast Asia is growing rapidly, and RTPs have become an essential part of this ecosystem, enabling seamless transactions for online purchases.
  • Mobile-first population. Southeast Asia has a high mobile phone penetration rate, and RTPs can be easily accessed and used through apps, which makes them a popular payment method for mobile-first consumers.
  • Government support. Many governments in Southeast Asia have recognized the benefits of RTPs and are actively promoting and supporting their adoption as a means to drive financial inclusion and promote economic growth.

Notably, the popularity of RTPs is forecast to continue rising in the near future, with the RTP networks expected to top $2.4 trillion by 2025, demonstrating a 2.3 times increase compared to 2020. Such growth is largely attributed to the factors listed above as well as to the ongoing local efforts throughout the region.

The Current Situation with RTPs Across SEA

Real-Time Payments in SEA: Current State & Future Trends

The regulation of real-time payments varies across Southeast Asia, with some countries having more advanced frameworks than others. Here is a brief overview of the current situation with the legislation of RTPs across the region:

  • Singapore has a well-developed regulatory framework for RTPs, with the Monetary Authority of Singapore (MAS) playing an active role in promoting their adoption. The MAS has issued guidelines for the implementation of RTPs and has launched initiatives like the Fast and Secure Transfers (FAST) system, which enables simpler near-instant fund transfers between participating banks and e-wallets.
  • Thailand has made significant progress in the RTP sphere with the launch of its PromptPay system, which allows users to transfer funds instantly between bank accounts and e-wallets. The Bank of Thailand has also introduced regulations for the implementation of RTPs, including the requirements for interoperability and customer protection.
  • Indonesia has the regulation of RTPs overseen by Bank Indonesia. The country is continuously working on the National Clearing System (SKNBI), which currently enables near-instant transfers between participating banks. However, it’s worth noting that at the moment the usage of SKNBI is still relatively low compared to other locally used payment methods.
  • In Malaysia, real-time payments are overseen by Bank Negara Malaysia, which has issued guidelines for the implementation of RTPs and other digital payment services. The country has also implemented the Instant Transfer (IBFT) system, which enables near-instant transactions between participating banks.
  • The Philippines features multiple major instant payment systems, such as InstaPay, PESONet, and PayMaya. RTPs are regulated by the Bangko Sentral ng Pilipinas (BSP), the country's central bank. The BSP has issued several regulations and circulars aimed at promoting the development of instant transactions in the country.
  • The regulation of RTPs in Vietnam is conducted by the State Bank of Vietnam. The country has launched its NAPAS Instant Transfer (NIT) system, which is used for a variety of payment transactions, including e-commerce payments, bill payments, and person-to-person (P2P) transfers.

Overall, while some countries in Southeast Asia have made significant progress in the regulation and promotion of RTPs, there is still room for improvement in terms of interoperability and adoption rates.

As real-time transactions become more widespread across the region, it is expected that a growing number of countries will introduce efforts to ensure that these payment initiatives are more secure, reliable, and accessible to all.

One major step toward this vision is the agreement forged in July 2022 between the central banks of five Southeast Asian nations (Singapore, Malaysia, Thailand, Indonesia, and the Philippines) to connect their payment systems. This initiative is expected to not only boost the spread of RTP but also to offer a practical solution to the scattered landscape of e-payments in SEA.

The Future of Real-Time Payments in Southeast Asia

Real-Time Payments in SEA: Current State & Future Trends

As the digital economy continues to thrive across Southeast Asia, there is significant potential for the further development of real-time payments in the region. With the convenience, speed, and security that RTPs offer, they are poised to become even more popular in the coming years as more people adopt digital payments.

Open banking and APIs are expected to be a major trend shaping the future of real-time transfers in SEA. These solutions allow financial institutions and service providers to share data, enabling customers to access a wider range of financial services and products, which could lead to the development of new RTPs that are more seamless, interoperable, and customer-centric.

Overall, as RTPs become increasingly ubiquitous in the region, they are likely to play a crucial role in driving financial inclusion and economic growth.

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