Digitalisation is the name of the game, having experienced a dramatic acceleration during the COVID-19 outbreak. In Asia Pacific, consumers are moving to e-commerce, contactless and electronic payments and in response, many businesses jumped onto the digital bandwagon too – if not, it will be difficult to survive.
The past few years saw significant developments in the payments industry, many spearheaded by fintechs. Fintechs play a significant role in addressing challenges and opportunities in areas like data security, fuelling growth for blockchain and data encryption, and building mobile and tech expertise to answer to consumer demands for convenience and easy navigation.
What are the key opportunities in 2023 for fintechs, and how can you scale your business in tomorrow’s hyper-digitalised world? Here are five trends we think fintechs should absolutely look out for.
Also read: China Mobile International launches iSolutions Carnival
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Web 3.0
Imagine a universe where payments run on blockchains and digital currencies are used widely to purchase goods and services. The reality isn’t that far away. Innovations are already rapidly scaling up in Web 3.0 and the metaverse, where banking is decentralised and where money can be moved quickly.
As Web 3.0 comes into maturity and with the rise of the metaverse, more use cases will develop. Connecting and engaging digitally will only become easier and both businesses and consumers will also experience a proliferation of payment methods in virtual reality.
Other than digital currencies, non-Fungible Tokens (NFT) may also gain wider acceptance as a form of payment, as they are a way to transfer value securely.
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Global money movement
Cross-border payments will not be unfamiliar to many, from sending remittances, buying or selling in social media platforms or eCommerce, working and getting paid in the gig economy, or simply just travelling abroad, we would have crossed paths with cross-border payments many times before.
In the coming future, all eyes will be on digitalising supply chain payments and government disbursements, and gaining traction are new buzzwords — Treasury-as-a-Service and Payment-as-a-Service, where banks and other financial institutions offer their customers advanced payment or financial management solutions through cloud platforms.
These developments matter because it impacts the build of national technical infrastructure to facilitate global money movements.
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Embedded finance
We are looking at a very near future where individuals nor businesses may never need to interact with a conventional bank ever again. Gone are the days when a bank or financial institution is the place to apply for credit, with embedded finance becoming another talk of the town. Simply put, fintechs are putting payment and finance experiences into a single seamless, convenient, and easy-to-use customer journey.
Embedded finance embodies the integration of financial services like lending, payment processing, or insurance into non-financial businesses’ platforms. On the consumer end, users will be able to access the services they need wherever and whenever they need it. Imagine being able to shop online and collect consumer loyalty and rewards points on the same platform as you would use to purchase and get credit, buy travel insurance and manage store inventory.
The evolution of embedded finance will fundamentally change experiences in commerce and impact merchant and consumer behaviour.
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Merchant and small business enablers
It cannot be understated that small and medium businesses (SMBs) are key drivers of economies globally. They may be small, but they pack a punch — SMBs represent about 90% of businesses and more than 50% of employment worldwide.
For SMBs to thrive in the digital economy, they must evolve their operations and platforms with new payment experiences that will enhance the customer experience, be it face-to-face or online. Omni-channel retail is essential for businesses of all sizes, because customers expect to be able to seamlessly move from browsing on a mobile device to picking up their ordered item in-store without a hitch.
With the current economic uncertainty, capital is getting more expensive, with lenders and investors deploying their funds with more scrutiny. With new payment innovations, SMBs can gain access to more efficient working capital that can free up liquidity for other essential business obligations.
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Open banking
Open banking has immense potential to enhance user experiences through improved credit decisioning, expedited on-boarding experiences and digital identity, by making crucial financial data accessible to promote more transparent relationships among consumers, businesses, and banks and also allow third parties to offer more customised financial services.
Regulators across Asia Pacific are also seeing the potential of open data and open banking. Leading the charge in the region is Australia, while other central banks in the region are starting to make good strides in developing open data frameworks that will shape future open banking practices. Think of this as paving the way for more potential new digital bank launches in the future, as well as introduction of more financial solutions embedded into consumer platforms such as marketplaces and super-apps.
Also read: Achieving a sustainable future by harnessing IoT and data
Visa Accelerator Program: A gateway to digital payments
The payments landscape is ever-evolving and opportunities are abound for the year ahead. Startups and fintechs must arm themselves with the right tools and knowledge to maximise their business potential. A wealth of support, resources, and expertise are available through myriad of corporate innovation programs in Asia Pacific to help startups unlock the next big breakthrough in payments.
On the Visa Accelerator Program as one such opportunity for startups and innovators to become a catalyst of change in the payments industry, Kunal Chatterjee, Head of Innovation, Asia Pacific, Visa says, “We want to help startups unlock their growth potential and scale across the Asia Pacific region, and our six-month program is designed with broader market reach, product solutions, technical integration, and rapid commercialisation in mind. In fact, many of our startups have uncovered new commercial opportunities with Visa and our client partners during, and even after completing the program.”
There are many reasons to apply for the program, including rapid testing, access and partnership, exclusive mentorship, and business scaling. During the program, startups will collaborate to address challenges and explore opportunities in the digital payment field. Participants will also have the chance to receive mentorship from experts while co-developing, testing, and iterating new solutions.
Application to the program is ongoing and will run until January 10, 2023. Learn more about the program and how to register here: https://www.visa.com.sg/apaccelerator
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This article is produced by the e27 team, sponsored by Visa
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