Three out of five or around 60% of consumers residing in Indonesia, Malaysia, Thailand and Singapore say they prefer real-time payments as a way to pay for items in 2021, almost level with cash (61%) and considerably higher than other payment options, like virtual wallets requiring cash or card top-ups (56%) and credit cards (30%).
This shift in consumer behavior and preferences towards real-time payments has been accelerated by changing payment preferences due to the COVID-19 crisis. Around 30% of consumers in Southeast Asia have now reduced their usage of conventional payment methods like cash, credit cards and debit cards since the start of the Coronavirus outbreak. Because of these changes, about 53% of consumers are now using real-time payments a lot more than they were before the ongoing pandemic.
Due to advancements in technology, consumers now want mobile-first and real-time experiences — but payments have lagged or have not caught up as fast with the latest trends. The development of real-time payment rails allows individual consumers, merchants and financial service providers to make payments to friends and clients, easily pay utility bills, and transfer funds in a near-instant manner.
Although cash has been an “immediate” payment method, the emergence of real-time payment channels brings this concept into the digital world with quicker settlement times, notifications as well as consolidated reporting.
Leslie Choo, MD – Asia, ACI Worldwide, stated:
“This fundamental shift in consumer demand and payment expectations sets forth a challenge for Southeast Asia’s banks, financial institutions and merchants. These organizations can ill-afford to put their modernization projects on hold, despite the challenges caused by COVID-19. On the contrary, they can drive growth by joining the region’s emerging real-time payments ecosystem, which will improve their ability to innovate and transform while reducing the cost of infrastructure and operations.”
The ACI Worldwide and YouGov research study indicates that consumers residing in Southeast Asia now expect the benefits of real-time payments to extend across jurisdictions after they start traveling to other areas again.
For future traveling, consumers have higher expectations for more transparency, improved overall safety, and convenience of their payments when compared to what they expected before COVID.
As noted in the survey findings, over 50% of consumers in Southeast Asia who have traveled to other countries in the past now expect their usage of real-time payments to increase the next time they go overseas. Around 70% said the ability to use their preferred payment methods when they travel will be even more important than before (in a post COVID environment).
“A focus on payments modernization is vital for financial institutions that want to ride the wave of the region’s biggest and most transformative payments trend — the emergence of a cross-border, real-time payments ecosystem. Unencumbered by legacy payment systems that can impede innovation in mature markets, countries in Southeast Asia can leverage robust domestic central payment infrastructures as the foundations for cross-border real-time payments, which will be a catalyst for growth and trade in the coming years.”