Two interesting events are coinciding in the Southeast Asian region economies: as the availability of smartphones and cashless payments proliferates, the percentage of populations over age 15 in those countries has grown exponentially. As a result, mobile wallet adoption rates have skyrocketed.
The ASEAN Payment Connectivity Initiative (ASEAN PCI) has set 2025 as its benchmark year to finish building the digital infrastructure needed to connect its nation’s citizens and consumers. 2024 will be the year of heavy lifting as nations negotiate for smaller service rates, faster service, and increased interconnectivity.
Its aim states it will improve interoperability by “accelerating digital payment adoption, deepening financial inclusion, developing human resources, strengthening cybersecurity, and others,” according to its declaration statement.
- Domestic payments of ASEAN countries will enable fast, secure, and cheap transactions across borders.
- ASEAN countries will keep their respective currencies, but exchange rates will be more stable within the region.
- Thailand and Singapore lead the movement with their PromptPay and PayNow systems.
In the recent past, international transactions within the borders of ASEAN nations took days to complete and were subjected to fees up to 10% of the financial amount sent. A blueprint was formed in May 2023 during a summit of ASEAN nations to bridge the financial chasm between them.
2024 has been a year of frantic building to finish the digital infrastructure needed to make the summit’s deadline of 2025. In April 2024, the national banks of People’s Democratic Republic of Lao and Brunei Darussalam joined the ASEAN PCI.
Unlike the adoption of the Euro currency within the European Union in the early 2000s, in which each country abandoned their national currencies and adopted a shared unit, each ASEAN country will maintain its current form of currency. The initiative will however decrease surchases and unfavorable fluctuations of exchanges and purchases made throughout the region.
Digital banking and mobile wallet adoption is so ubiquitous that half of the top ten adoption rates in 2022 occurred within ASEAN countries, according to a brief published in November 2023 by the World Economic Forum. 2024 projections posit that two-thirds of the top ten nations of mobile wallet adoption will be ASEAN nations.
