Revenue prospects for mobile operators, banks, credit card networks, and financial technology startups in Southeast Asia are looking up as mobile payments adoption is expected to rise in the region over the next five years.
Driving this growth, according to research firm Forrester, is the surge of smartphone penetration in the region, which it forecasts to grow to 230 million units by 2017 from 175 million this year.
A report released by Forrester recently showed that remittances will continue to spur peer-to-peer (P2P) payment growth in emerging markets, which is setting the stage for digital wallets. Migrant workers are also increasingly turning to telcos and fintech startups such as Xoom, Remitly, TransferTo, TransferWise, and MatchMove to remit money via their mobile phones.
Meanwhile, cross-border m-commerce is also driving growth in remote payments as many online consumers are shopping on their mobile devices in countries like Singapore and Malaysia. Cross-border orders using credit cards and PayPal are significant.
Forrester observed that more players are incorporating features such as coupons and loyalty rewards into their mobile payment systems, which somewhat resemble digital wallets but do not qualify as such — yet.
“Banks looking to get in on the mobile payment opportunity must decide if they want to build their own mobile payment systems or partner with business/technology vendors. Having a clearly defined mobile payment strategy will protect and deepen the bank’s relationships with both retail and business customers,” the report noted said.
