Mobile Payments in Southeast Asia
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17 March 2015KyongSun Kong
With the rapid growth of smartphone penetration in Southeast Asia, e-commerce and mobile commerce is one of the hottest issues in the region. Not only local players but also global e-commerce players have entered into the region to expand their business. However, a number of Southeast Asian countries still have low banking account penetration rates, hence people may not have access to payment methods for e-commerce and mobile commerce. Mobile payments may be one of the solutions for e-commerce payment. With the growing popularity of e-commerce and m-commerce, mobile payments is receiving more attention than before. Not only global mobile payments players such as PayPal but also local players like MOL, Fasspay, 2C2P, Smart Money, and GCash operate business in Southeast Asia. Some Southeast Asian countries still have a relatively high level of unbanked population but mobile payments is rapidly being accepted in the region because smartphone penetration rates are growing much faster than bank account penetration rates. Also, people can hold a mobile payments account without a banking account at some mobile payments services. However, there are some obstacles to the future growth of mobile payments in Southeast Asia. A number of people are not well aware of mobile payments services, hence mobile payments players should invest more into marketing activities, although investment in infrastructure and equipment is also important. A number of payments players are considering entering into the Southeast Asian mobile payments market, but they may face difficulties to set up their business in the region. Each country has different regulations, telecommunications infrastructure, payments infrastructure and financial environment. Players who consider entering into the market should develop strategies to fit each country’s conditions. Celent believes that mobile payments in Southeast Asia will grow strongly for the next few years because the infrastructure is already in hand and smartphone penetration is still growing swiftly. Celent will keep an eye on this trend and update the trends in upcoming reports and blogs.