The payments landscape in Asia-Pacific continues to leverage new partners and new routes for consumers to transfer money. Singtel and video gaming company Razer announced plans last year to link their digital payment systems in the region, and Huawei Pay launched in Hong Kong in July this year.
I recently did an interview with CNA938, a popular English radio station in Singapore, to discuss the changing digital payment landscape in Singapore and across the region. Specifically, we discussed how new fintech companies are partnering with traditional players to unleash the power of digital platforms to deliver new payment experiences for consumers. In this blog post I will explore these topics in more detail and share how interconnection is helping to drive change and innovation in Asia’s payment sector.
The current payments landscape in Asia-Pacific
According to PwC,1 Asia continues to be the leading region for growth in mobile payments. Digital transformation is reshaping industries and affecting the daily lives of individual consumers everywhere as discussed in this “Key Trends in Digital Payments Markets and Strategic Infrastructure” white paper.
A robust and rich ecosystem for digital payments is essential the payment industry to thrive. China, Hong Kong and Singapore already have such ecosystems due to new technology implementation as well as the basic infrastructure and regulatory authorities needed to power payment innovations. For example, last year the Faster Payment System was launched by the Hong Kong Monetary Authority to address the growing demand for real-time payment services.
In Asia-Pacific, the digital payment landscape is evolving beyond simple mobile wallets. Many digital payment services such as Alipay and WeChat Pay are expanding their offerings to become even more incorporated into the daily lives of consumers. In Asia we are witnessing the evolution of mobile wallets into full-scale lifestyle platforms that provide services such as P2P payments, cross-border payments, bill payments, restaurant bookings, etc., making lives more convenient. These new ways of moving money are no doubt changing consumer lifestyles, as well as the integration of retailers, banks and payment service providers across the region.
It’s not one size fits all
Today, there are an overwhelming number of ways to pay. The market for mobile wallets is a crowded field, with large companies such as Alibaba, Google, Samsung and WeChat offering similar services. In addition, a number of banks have introduced their own mobile payment services such as PayMe, the peer-to-peer payments service from HSBC.
The availability of so many options has led to inconsistent usage and adoption of mobile wallets, and with such an abundance of providers, consumers are looking for additional incentives to capture their loyalty. These include features such as special offers and discounts at the point of sale, insights and monitoring of their spending habits, product and service recommendations, and enhanced security notifications. Consumers are well aware that they have the power to browse different wallet options and select the ones that suits their lifestyle best.
Traveling consumers are also finding that cash and credit cards are no longer the only way to pay. In fact, in many places cash and credit cards are no longer welcome, with Alipay and WeChat Pay already replacing cash and card at many retailers in mainland China. Chinese consumers can even use their Alipay and WeChat Pay wallets when traveling to other parts of Asia and even some European countries. It’s only a matter of time before mobile wallets become fully cross-border friendly and replace the need for any currency worries.
Interconnection is key to unlocking the power of digital payments
Whilst the future of payments is a bright and promising one, it will require new routes of connectivity, increased security and a consistent user experience. To deliver this, businesses must be able to connect directly and securely to an ecosystem of banks, networks and clouds.
Equinix is home to an increasingly connected digital payments ecosystem. Our global platform provides access to the digital infrastructure required to enable companies to accelerate both new product development and business performance by connecting them to networks, clouds and, in many cases, each other. With regulatory support for standardized messaging formats, Equinix can provide businesses access to a platform for interconnection that will enable collaboration with new partners to facilitate cross-border payments.
In addition to providing private secure access to a number of leading cloud service providers including the likes of AWS, Microsoft Azure, Google and Oracle Cloud, we also offer a new and innovative approach to managing encryption and tokenization of data—Hardware Security Module (HSM) as a Service. It is ideal for the multicloud e-commerce and payment environments of today, incorporating capabilities, features and functions designed specifically to address the needs of secure, high-volume, real-time digital payments in cloud environments.
Payment—instant, open and everywhere
At Equinix, we believe that the future of payments is instant, open and everywhere. Collaboration and partnership across the payment ecosystem will continue to accelerate, and cloud technology will play a more significant role in payments and financial services in the future.
Real-time collaboration, analytics and omnichannel service delivery will all require fast, low-latency interconnection among partners, locations, data sources and clouds. Only an Interconnection Oriented Architecture® (IOA®) strategy can make all these components work together, providing secure interactions between people, locations, clouds, data and things at the digital edge.
Digital commerce participants can build an IOA framework on Platform Equinix®, which offers access to more than 200 data centers in 52 global markets, as well as direct connectivity to 2,900 cloud and IT service providers. Our financial services ecosystem includes more than a thousand companies worldwide, providing the best place for industry players to connect with each other and provide the services that customers need in today’s digital world.
To find out more about how an IOA strategy can help payment companies connect to collaborate and continue to transform the customer experience, download this IOA Playbook.