
Asia’s digital and real-time payments market is one of the most dynamic in the world, but also one of the most fragmented.
Each economy has developed its own payment systems, so the adoption curve and rate vary greatly. Few links exist across borders, and this patchwork creates barriers to scale and reduces the ability of consumers and businesses to benefit from seamless, real-time transactions.
Governments across Asia are stepping in with coordinated initiatives for the next decade. Their actions will determine how quickly real-time payments expand, how effectively economies will be interconnected and how much trust consumers and businesses will place in emerging digital solutions.
Governments enacting change
Government support and regulatory harmonisation have already shown positive outcomes. Singapore’s PayNow and Malaysia’s DuitNow are leading examples. They enable instant transfers between participating banks and wallets by offering interoperability across banks, e-wallets, and QR codes, and creating a nationwide standard for peer-to-peer payments. Both initiatives demonstrate what happens when regulators and industry participants align on standards to accelerate adoption.
The Bank for International Settlements (BIS) has gone further with its ambitious initiative, Project Nexus. Led by BIS Innovation Hub with participation from key markets including, Malaysia, Singapore, Thailand, the Philippines and India, it aims to interconnect Asia’s domestic instant payment systems through a single multilateral framework. Unlike bilateral links such as PayNow and PromptPay, Project Nexus is designed to scale by reducing the complexity of multiple connections.
Australia also offers a valuable case study in government-instigated adoption. The 2018 launch of the New Payments Platform was a direct result of collaboration between the Reserve Bank of Australia, domestic banks and technology providers. In setting clear regulatory expectations and encouraging partnerships with global payments providers, the Australian government accelerated adoption of real-time payments across the economy with backing from early adopters.
In 2022, Australians were sending more than US$1.2 billion real-time transactions annually, with volumes increasing by double digits year-on-year. The combination of government incentives and industry execution created a virtuous cycle of growth and trust, manifesting in increased business and consumer adoption of this technology.
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Asia’s challenge and opportunity
Asia holds the greatest potential as a global frontier for cross border payments, while enterprises and small-medium businesses (SMBs) have emerged as key drivers of digital payment adoption. However, three major obstacles stand in the way for Asia to make the leap towards a unified payments ecosystem.
- Regulatory divergence across APAC remains one of the biggest issues, as each country has its own and separate standards for data privacy, anti-money laundering and consumer protection. Without harmonisation, real-time cross-border payments raise the costs and risks of being further slowed by compliance checks and inconsistent requirements.
- Uneven infrastructure in Asia’s developing economies is another challenge, as many lack the digital structure to reliably support large scale real time transactions. Upgrading these systems requires investment from governments in partnership with global providers who can deliver resilience and scalability.
- Trust and risk are central hurdles. Coordinated standards for fraud prevention, authentication and dispute resolution are essential to alleviating reputational and client risk.
Despite these challenges, Asia’s opportunities are significant. ASEAN trade reached more than US$3560.1 billion in 2023, with cross-border e-commerce surging. Real-time payments can be a key enabler to meet this demand thanks to reduced settlement risk, increased liquidity and faster commerce.
For SMBs and enterprises, they cut costs associated with traditional bank transfers or card fees. For consumers, they provide instant, low-cost access to funds, which in those markets with large unbanked populations.
Incentives and partnerships are key
Governments must work together through shared goals, strengthened incentives and common frameworks for digital payment adoption.
The ASEAN Payment Connectivity initiative seeks to link national systems underpinned by QR code standardisation, while Project Nexus represents a technical pathway to make this a reality. This approach reflects a broader recognition that payments is a network business.
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While governments are starting to set the direction, the rest of the ecosystem must step up to deliver scale and industrial collaboration will be critical. Proven cross-border providers bring compliance, security, technology and infrastructure expertise.
We’ve seen firsthand what a coordinated and unified regional approach can bring in tangible productivity and commercial benefits for merchants of scale. The combined ability to build and operate infrastructure at scale is critical for achieving the interoperability that Asia’s governments envision.
Partnerships between governments, local banks and providers will be the defining feature of this next stage. No single player can solve these challenges alone.
The path forward
Real-time payments are projected to grow rapidly across APAC in the next five years, supported by increasing digital literacy, cross-border e-commerce growth, stronger regulatory frameworks and government incentives.
The shared focus must now shift to increasing interoperability, both within markets and across borders. Without this, Asia risks replicating fragmentation on a larger scale.
An Asian payments ecosystem where consumers and businesses move money instantaneously and securely across member states would accelerate trade and reduce cross-border friction.
Underpinning this needs to be dependable, proven payments providers who know how to scale emerging technologies across borders while meeting the nuanced client needs of each market.
Through sustained government support, coordinated regulation and partnerships with leading providers, Asia has the opportunity to set the global standard for real-time payments adoption.
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