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Mobile payment options continue to expand in Southeast Asia

September 1, 2021

Asian woman use her phone to pay

Filippo Giachi

SVP – Asia Pacific, Middle East & Africa

The mobile payments landscape in Southeast Asia continues to evolve as consumers embrace mCommerce. Still, merchants need to offer flexible billing mechanisms to reach as many customers as possible and partner with the right payment providers to make the most of the opportunity.

The recent collaboration between PromptPay and Rapyd in Thailand is an example of that innovation. Developed by the Thai government and launched in 2017, PromptPay enables its users to make real-time payments or transfer funds using a mobile phone number or national ID. After partnering with payments platform provider Rapyd in August, PromptPay users in Thailand can now pay for a range of premium digital content on the Google Play Store for the first time, including in-app purchases of music, movies, games and video streaming subscriptions and downloads.

Mobile payments in Thailand growing in popularity

Thailand represents fertile ground for mobile payment adoption. A young population with a median age of just 40 spends almost nine hours a day using the Internet, aided by average mobile data speeds approaching 52Mbit/s and high smartphone penetration.

GlobalWebIndex estimates that over 68% of Internet users aged between 16 and 64 used some form of banking or financial services app in the third quarter of 2020, with over 98% owning smartphones. At last count, PromptPay had around 55m registered users, for example, almost 80% of the country’s population (70m).

Those that support carrier billing are also popular. TrueMoney’s eWallet – which integrates with mobile networks including TrueMove H, AIS and Dtac – allows users to make cashless and cardless payments using their mobile phones. According to App Annie statistics, it was the 8th most downloaded app in January 2021, ahead of mobile banking app MyMo.

Another mobile wallet offered in Thailand and other countries in Southeast Asia is ShopeePay (formerly AirPay), the integrated mobile wallet app from Shopee whose owner SEA saw its eCommerce revenue expand 142% year on year in the second quarter of 2021. Customers can use the app to conduct mobile top-ups, bill payments and online/offline purchases using QR code and Scan & Pay functions alongside money transfers and withdrawals.

World Bank global financial inclusion data suggests 8.3% of adults aged 15 and above in Thailand have a mobile money account that links their eWallets directly to a mobile phone number. In comparison, 45% of Internet users aged between 16 and 64 used an OEM smartphone app like Apple Pay, Google Pay or Samsung Pay which stores bank details to buy goods or services in the third quarter of 2020.

eCommerce activity surges during pandemic

As in other countries, the volume and value of eCommerce purchases in Thailand surged during 2020 as lockdown restrictions forced the closure of shops and other venues. Statista estimates the total value of consumer goods brought online in the country reached US$7.3bn during the year, up almost 43% in 2019. Around three-quarters of Thai Internet users aged between 16 and 64 purchased a product online in the third quarter of 2020, according to GlobalWebIndex.

JP Morgan estimated the total value of the online shopping sector in Thailand at US$26.2bn in 2019, of which mCommerce purchases conducted using a mobile phone accounted for 52% of the total. At that point, online sales were still less than 1% of the country’s total retail sales, leaving ample headroom for growth – the bank is forecasting double-digit expansion in both eCommerce and mCommerce activity over the next few years.

Competition for payments customers intensifies

The PromptPay Google Play tie-up highlights the competitive nature of the consumer mobile money market in Southeast Asia, which has once again proved too hot for some to handle. August 2021 saw multinational gaming company Razer shut down its eWallet services in Singapore and Malaysia after launching in 2018.

Mobile payments represented a small but growing part of the company’s portfolio. Razer’s heritage is in gaming hardware and software, including peripherals and laptops, and it released its own smartphone after the acquisition of Nextbit in 2018. The company simultaneously moved into electronic payments with MOL’s US$61m acquisition, then launched its Razer Pay eWallet, again aimed at its core gaming audience, in Malaysia in the same year.

Razer had planned to compete in the digital banking market with what may have been the world’s first ‘Global Youth Bank’ targeted at the younger demographic, but it reconsidered after the Monetary Authority of Singapore refused to grant the provider a virtual banking license. The company remains committed to its eCommerce, offline payment processing and logistics business and continues to see impressive growth from its core business activities.

The company’s revenue expanded 48% year on year to US1.2bn in FY20, almost double the US$518m posted in its IPO year in FY17. Most of that turnover (nearly US$1.1bn, or 89%) comes from hardware sales. Razer’s software and services business – which included its payments services for youth, millennials and Generation Z as well as gaming, electronic sports (eSports) and live streaming platforms – contributed 11% (US$128m), having grown 67% from US$77m in FY19.

Rapyd too remains very much in growth mode, now valued at up to US$8.75bn after raising an additional US$300m of Series E funding in August this year[i] (more than triple the price estimated as after its round of US$300m Series D funding the previous January). It offers payments and eWallets and transfers, card issuing, and fraud protection via an application programming interface (API) that makes it easy for third parties to integrate their services.

Like other providers which focus on contactless payment technology, Rapyd saw demand for its services soar after the onset of coronavirus. And the widespread change in behaviour in this region precipitated by the benefit will continue to benefit companies specialising in mobile payments for some time to come.

 


[i] Rapyd raises $300m on $8.75B valuation as fintech-as-a-service continues to boom, TechCrunch, 3rd August 2021

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