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Jerry Li, Antom's Director of Strategic Partnerships, dives into Asia's thriving payment landscape and discusses how businesses expanding in the region can increase their cost effectiveness:
According to the International Data Corporation (IDC), the total digital economy of Southeast Asia is set to grow to over USD $900 bn by 2027. So, the growth opportunity is tremendous. Payment user coverage is particularly important for seizing this opportunity. In the region, credit cards are quickly losing market share to alternative payment methods like digital wallets, Buy Now, Pay Later, and real-time account-to-account transfers.
By 2026, there will be an estimated 426 million digital wallet users in Southeast Asia. That's 62% of the total population. In short, the world's payment ecosystem is becoming increasingly diverse and localised, so, for any business looking to expand in Asia and indeed globally, it will inevitably have to consider offering more local payment methods.
Another very important consideration for merchants is controlling costs. Cash management is key and loss from fraud is top of the list in this regard. Fraudsters are becoming increasingly sophisticated and targeting specific markets. As such, choosing anti-fraud technology and tools that have evolved to combat fraud in real-time is an essential part of your business expansion plans.
Hear more from Jerry in our video below and discover how Antom's solutions tackle fragmented payment systems, optimise growth, and reduce fraud with AI-driven solutions for businesses expanding into Asia.
Transcript
My name is Jerry and I am the Director of Strategic Partnerships at Antom, Ant International's Global Merchant Services platform.
What should companies consider when expanding to Asia?
Many businesses have been interested about payments in Asia, because Asia is one of the fastest growing regions in the world.
According to IDC, the total digital economy of Southeast Asia – Japan, Korea – is set to grow to over USD $900 billion by 2027, so the growth opportunity is tremendous.
When I'm meeting with CFOs or payment heads from our customers and partners, I can feel that people always care about business growth, cost reduction, and optimising efficiencies.
The payment user coverage is particularly important. After a company has set up a strong product line and supply chain, spent a lot of money on marketing to get traffic to the checkout page the very last thing they want to find out is that the payment method doesn't work for the consumers.
Offering credit cards and PayPal is good to start with, but not enough for the mid or long-term growth, especially if you want to expand into Asia.
What are the top payment methods to consider?
Globally, credit cards remain the leading payment method in e-commerce payments, but are quickly losing market share to alternative payment methods, like digital wallets, Buy Now, Pay Later, and real-time account-to-account transfers. By 2026, there will be an estimated 426 million digital wallet users in Southeast Asia, representing 62% of the total population. Indonesia, Malaysia and Vietnam will see the highest penetration, which is around 70%, by 2026.
Beyond cards, digital wallets, and Buy Now, Pay Later, the world's payment landscape is highly diverse and localised. The more markets that a business wants to expand into, the more local payment methods it will have to consider. For example, there are currently more than 60 real-time payment schemes around the world – UPI in India, PromptPay in Thailand and so many more. This is also thanks to the efforts of central banks in making traditional account-to-account bank transfers more efficient and cost effective.
How can brands be more cost effective?
Cost is always on top of merchants' considerations. So, when it comes to cost management, fraud loss is top of the list. Merchant losses due to online payment fraud is expected to exceed USD $206 billion by 2025. Around 4% of e-commerce revenue is lost due to payment fraud. Fraud is fast evolving and fraudsters are becoming more sophisticated in selecting markets and businesses.
Fortunately, technology and tools are also constantly evolving to combat fraud. Antom has developed a real-time fraud prevention solution. It adopts the most cutting-edge AI technology and algorithms. Our best practice case shows that we can reduce the fraud loss up to 57%, and at the same time recover 59% of orders that would have been otherwise rejected.
In terms of efficiency, we have developed the Antom Payment Orchestration platform, that can connect the merchant to multiple acquirers through us and do smart routing with AI technologies, for the transactions to achieve best possible authorisation rate and costs.
In short, there are many factors to consider when expanding into new markets and continuing to grow your customer base, but it doesn't have to be complicated, even if you could be dealing with a fragmented payment landscape like Asia.
One of the easiest thing you can do is to speak with our team and we can find a business solution that work best for you and create better value for you.
