By IT News
Southeast Asia is experiencing a financial transformation driven by digital payments, according to a new IDC report commissioned by global payments platform 2C2P. Powered by changing consumer and retail trends and more inclusive payment options, ecommerce spending will rise by 162% to reach US$179.8 billion by 2025 across the region, with digital payments accounting for 91% of transactions.
The IDC InfoBrief, "How Southeast Asia Buys and Pays: Driving New Business Value for Merchants", unravels the complexities of the fragmented Southeast Asia payments ecosystem to help businesses make more informed decisions and grasp opportunities. It tracks emerging trends such as mobile wallets, domestic payments (real-time and online banking options), and Buy Now Pay Later (BNPL) alongside traditional options like cards and cash. The report estimates the changing market share of payment options between 2019 and 2025 to help businesses strategise scaling across borders.
"There is an opportunity to ride on the growth of digital payments and provide secure and reliable financial services to meet the ever-changing needs of consumers in the region. Digital payments are no longer a nice-to-have but a must-have, and a key part of every company's business strategy," said Aung Kyaw Moe, founder and CEO of 2C2P. "The ability of businesses to optimise their payment capabilities and operations according to geographical reach will also determine how they stay competitive, agile, and successful across the region."
Changing consumer and retail trends have propelled the rapid growth of Southeast Asia's digital economy, with over 400 million ecommerce users expected in 2025. This has resulted in increased competition and collaboration by the public and private sectors to offer the payments infrastructure businesses require to reach these users. Major gainers appear to be mobile wallets, domestic payments and BNPL.
"Southeast Asia's payment landscape is incredibly fragmented, and payment systems and their adoption as well as regulations can vary from market to market. To help businesses understand and navigate the region's complexities, we've put together this comprehensive guide to the region's payments landscape featuring regional and local payment insights," said Michael Araneta, Associate Vice President, Head of Research and Consulting, IDC Financial Insights Asia-Pacific. "We hope that the report's findings will refine businesses' strategy to ride the digital wave and ultimately unlock Southeast Asia's US$276 billion digital economy."