When the idea of writing an article about APAC payments challenges came across my desk, my dilemma was where to start? This region is undergoing an immense transformation in the payments landscape. Here is my attempt to point out top three challenges and the ways merchants can better prepare themselves.
Regulators: Each country has its own regulatory framework for payments and banking, with hardly any overarching common themes to scale in the region. This leads to various compliance and legal issues for both merchants and payment providers in the ecosystem. For example, unlike Europe’s GDPR, Asia doesn’t have any universal data and privacy regulation. Each country has defined its own laws when it comes to data sharing and storage. One can only imagine how complex payments compliance can get with every country in Asia. At times, tackling regulatory aspects is the long pole versus the technical integrations, unlike other markets
E-wallets Acceptance: The increasing number of e-wallets in the region is the writing on the wall and is no longer a surprise. If any merchant or payment provider wants to remain relevant in the region, they cannot avoid offering alternate payment methods on their platform; yet merchants’ acceptance of e-wallets is low due to poor understanding of the process, complex merchant payments processing setup, and high fees.
High Underbanked Population: The region has varied percentages of underbanked or unbanked populations in large markets like Indonesia, Philippines, and Vietnam. The most common global form of payments - credit or debit card – are not common in this region. The penetration of credit cards in markets like Thailand is only 30 percent. Alternate payments methods have shot up in prominence with the rise of e-wallets in the region.
This is just the tip of the iceberg. It is a promising region with huge economies like India and China to tap on for any foreign entity. The first step to enter the region is to understand the market, to understand the nuances from regulatory and payments trends aspects, and to identify or learn from fellow merchants on how they overcome their set of problems in the region.
The MAG APAC chapter offers a platform for all merchants to share their views, challenges, and concerns about payments. It is a forum where merchants can voice out their opinions to a broader community. Payments is complex, but a conversation with fellow merchants can help overcome many hurdles which would otherwise be discussed in only in our board rooms or with a closed group of people.
In order to create that environment of learning and sharing, we have come up with series of Merchant Roundtables and webinars every alternate month. The Merchant Roundtable is a ‘merchant only’ series which has merchants coming together and sharing their perspectives on regulators, BNPL, cross border payments, acquirers, PGs or anything under the payments landscape. Webinars are a series where stakeholders like acquirers, APM providers, BNPL providers, issuers, scheme owners, fraud and risk providers and merchants come together and share their perspective on distinct topics. In August, we hosted a webinar on BNPL acceptance and processor resiliency.
The MAG APAC chapter is our initiative to help overcome complex environments by first educating and training the merchant payments teams so that they are better prepared for upcoming challenges. If you are merchant and want to be up to speed on APAC payments trends, join us for our next Merchant Roundtable in September or drop me a note.