Digital payments comprise 50% of SEA’s transactions: report

The continuous pattern of digital payments and services led to a $30b revenue.

The adoption of digital financial services (DFS) has been seeing steady growth in Southeast Asia (SEA), with digital payments consisting of more than 50% of overall transactions, a report finds.

According to a joint study by Google, Temasek, and Bain & Company, the region has accomplished boosting monetisation and establishing revenue streams through digital financial services. With it, the irreversible offline-to-online pattern increased the transition and growth of DFS adoption, leading to a US$30b DFS revenue.

Digital lending is seen as the most prominent driver, with high lending rates and consumer demand surging over underbanked consumers and small businesses. Singapore is projected to be the biggest lending market in the region through 2030, whilst Indonesia currently is the biggest digital payments market.

ALSO READ: The majority of SEA consumers will go on a hybrid holiday shopping setup

The rise of DFS has prompted several fintech companies to provide lending services to underbanked clients, other financial services to switch to digitalised services for the growing customer bases, and traditional financial institutions to preserve high-net-worth customers with personalised services.

“Meanwhile, growing affluence and increasing digital familiarity in the Republic has created new opportunities in digital financial services, particularly in wealth management and digital banking. Winning players will tailor their offerings to meet banking priorities and user experience expectations for the emerging middle-class segment,” Florian Hoppe, Partner and Head of Vector in Asia-Pacific of Bain & Company, stated.