What will payments in Asia look like in 2020?

Mary McHale
What will payments in Asia look like in 2020?

Cash is disappearing. And that’s particularly true in parts of Asia. A recent UN1 study revealed that Alipay and WeChat Pay supported nearly US$2.9 trillion in digital payments last year (2016), representing a twenty-fold increase in the past four years.

The payments landscape is rapidly evolving in many areas, offering new ways for consumers, retailers, banks and corporations to move money. Although the traditional debit, credit, local clearing and settlement platforms, and wire transfer rails all remain in place, the ecosystem that uses them has vastly expanded due to open APIs and advanced smart phone technologies.

On a recent trip to China, my colleague paid for our lunch by scanning a QR code on her phone instead of presenting a credit card. While traveling in Singapore, I used a mobile app to hail taxis and told the driver where I wanted to go. On arrival, I said “terima kasih” and exited the cab, receiving an SMS that confirmed payment and added a receipt to my digital wallet. In Australia, I could use an app to order my coffee on the way to the office. And back in Hong Kong, after a catch-up lunch with my team, I simply shared the amount due from each person and the money was paid using a mobile messaging app. No cash or bank transfers required.

Yet, despite the surge of digital payments in the region, the ecosystem behind them remains highly fragmented, with large numbers of mobile wallet and payment gateways focused on just one part of the transaction, and an ever-increasing number of commerce driven apps being created. A single, comprehensive end-to-end solution that creates a consistent user experience which is faster, easier and more convenient than using a card or cash, has failed to fully capture the hearts and minds of the Asian consumer.

Interconnection counts

One of the things driving this fragmentation is the fact that legacy infrastructures and current architectures were not necessarily built to handle the complex web of new connectivity that is required from new products, new partners, acquisitions or global expansion.

So to help address this issue, we recently launched EPIC – the Equinix Payments Innovation Council – with chapters in Australia, Hong Kong, and Singapore. The council meets quarterly and is committed to bringing together senior business and technology leaders from the payments industry. The meetings are by invitation only and include a brief presentation from industry experts to share views and discuss current trends and future opportunities for payments. EPIC members benefit from the highly interactive format that allows every leader to exchange knowledge, perspectives, and share ideas while networking over breakfast or lunch. Here is a snapshot of our recent conversations:

In Australia, the New Payments Platform (NPP)2 is leading the way as a major industry initiative to develop national infrastructure for fast, flexible, data rich payments. As such, our discussions here have focused on hybrid cloud infrastructure as a possible road to connectivity between the banks and PSP platforms.

In Singapore, the conversation – while still cloud-based – focused on how secure cloud infrastructure is an enabler for a variety of FinTech innovations, including banking-as-a-service (BaaS) platforms. We were honored to have the Asia Cloud Computing Association (ACCA) participate in the discussion and share key updates from their report on FSI regulations impacting cloud in Asia-Pacific entitled ‘Asia’s Financial Services: Ready for the Cloud.’3

Finally, in Hong Kong, cybersecurity was the hot topic, and for good reason. It is impossible for anyone in the payment sector to create a plan for cloud adoption, without first addressing cyber security. We explored the potential use cases for Blockchain in payments, given its ability to deliver a host of advantages, from enabling irrevocable, real-time payments, to ensuring compliance and security.

In addition to market-specific topics, a question that has arisen in every EPIC discussion is how banks and FinTech companies can accelerate their collaboration, and what is the best model to leverage the strengths of both parties.

The consensus has been that the industry needs to combine the new ideas, services and delivery models developed by FinTechs, with the stability, large customer bases and regulatory support and relations that established banks provide. Add the right mix of imagination, innovation, and Interconnectivity, and the sky is the limit.

Digitization is presenting EPIC opportunities

One thing that every council, regardless of location, has agreed on is that more nimble infrastructure, cloud connectivity, and broader commerce applications are redefining what is possible at the intersection of payments and technology.

This is mirrored in the findings of the recent Global Interconnection Index, published by Equinix. It forecasts that the banking and insurance segment will be one of the largest consumer of Interconnection Bandwidth in Asia-Pacific. That is because digitization is forcing the industry – which is expected to grow at a CAGR of 61% until 2020 to 143 Tbps – to support new customer engagement models.

A new quantum leap

As a former banker, I can see that the possibilities for new models of Interconnection and the exciting new consumer experiences that they will deliver are endless. It’s up to all of us to take the next quantum leap – and jump to a digitally driven payments ecosystem based on new models of Interconnection. With EPIC, Equinix will continue to play a role as a match-maker, coordinating and building on our existing community of banks, payment providers, payment gateways, card associations, mobile wallet providers, and FinTechs across the region.

Watch this space to keep up with the latest developments and conversations. And discover how companies are leveraging new points of Interconnection to explore ways to deliver a seamless and secure customer payment experience. Join EPIC now to become part of the conversation and know what your peers are doing to embrace the digitization of payments!


1 – https://www.betterthancash.org/tools-research/case-studies/social-networks-ecommerce-platforms-and-the-growth-of-digital-payment-ecosystems-in-china

2 – http://www.apca.com.au/about-payments/future-of-payments/new-payments-platform-phases-3-4

3 – http://www.asiacloudcomputing.org/research/2015-research/fsi2015








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Mary McHale Director, Strategic Accounts for APAC
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