The COVID-19 pandemic has profoundly impacted the lives of people around the world. Throughout 2020, local governments worked to restrict people’s movement to contain the spread of the disease. Lockdowns greatly impacted the daily operations of several vertical industries and limited access to different types of goods and services. Moreover, as fear of the pandemic spread, people began to increasingly rely on digital channels to fulfill their needs and wants. This triggered a shift to the use of digital payments. A Frost & Sullivan study (June 2020) discovered that 62% of consumers in the ASEAN region plan to increase use of online payment services after the pandemic subsides, while 60% of consumers plan to increase use of digital wallet (eWallet) services in a post-pandemic scenario.

An astonishing 87% of consumers across the region plan to start or increase the use of digital payment services to avoid physical contact with other people. Convenience will remain a key driver for digital payment usage, as expressed by 89% of consumers across the ASEAN region. Another major demand-side requirement was security - 43% of consumers in Asia-Pacific expect businesses to protect their data. The use of technologies, such as artificial intelligence and biometrics, will be a key enabler for payment service providers to balance security and convenience.

The shift to national and regional payment interoperability commenced before the start of the year (2020). Local governments across the ASEAN region had initiated the move to national interoperability by providing the relevant payment infrastructure and enforcing the required standards. Meanwhile, regional industry collaborations were initiated by the private sector, most notably by companies based in Thailand and Singapore. Frost & Sullivan survey results revealed that interoperability is an important concept as 72% of consumers in the region are of the opinion that there are not enough merchants that accept digital payments. Interoperability will enable faster merchant acquisition processes and provide greater convenience for digital payment users.

This study is based on the data obtained from an online survey undertaken in June 2020. It is supported by extensive secondary research. Companies mentioned in this study include, but are not limited to, Bank of Ayudhya, Boost, Coins.ph, Dana Limited, DBS Bank Ltd (PayLah!), Fave, GCash, GoPay, Grab (GrabPay), Jenius, Kasikorn Bank, Krungthai Bank, Liquid Group, Maybank (QR Pay), OVO, PayMaya, Razorpay, Samsung Pay, Siam Commercial Bank, Touch N’ Go Systems, Inc., True Money, Venmo, and VIA.

Countries covered include Thailand, Malaysia, Indonesia, the Philippines, and Singapore.

The target audience includes digital payment service providers looking for growth opportunities and companies seeking to expand by leveraging payment solutions. The understanding of consumer behavior in a post-pandemic scenario will help both segments.

Author: Mei Lee Quah