Asia Pacific is the most active and dynamic region for real-time payments globally, driving its adoption across the world, said the managing director, Asia, of payments systems company ACI Worldwide.
In Asia, many governments have already begun, or are ready to begin, real-time payment central infrastructure initiatives, and growth rates are outstripping the more mature economies of North America and Europe, ACI Worldwide's Leslie Choo, told finews.asia.
Leslie Choo, managing director – Asia, ACI Worldwide
Founded in 1975, the Miami, Florida headquartered firm provides real-time payments solutions to corporations globally. It uses Singapore as a hub for its operations.
According to Choo, real-time payment technologies allow the region's states to avoid the time and cost associated with traditional schemes in mature western economies while rapidly deploying a cost-efficient, more flexible, and scalable model that is better suited to the region’s economies, geographic landscape, and market maturities.
Asia Leads
The main drivers that have contributed to Asia’s leadership in real-time payments are the drive to digitalise the region’s economies; the efficiencies, scalability, and affordability of real-time payment infrastructure; and increasing financial inclusion, Choo said.
At a social level, governments are counting on real-time payments to bank their unbanked – by accelerating financial inclusion for the billions of Asia’s disenfranchised citizens, he added.
Surge in Transactions
According to the ACI’s 2021 «Prime Time for Real-Time» report, more than 70.3 billion real-time payments transactions were processed globally in 2020: an increase of 41 percent compared with the previous year.
«So, there is very little need for financial institutions in many markets to further encourage the shift to real-time payments as many of Asia’s governments and citizens have already embraced a digital future with real-time payments at its core,» Choo said.
ISO 20022 Opportunity
Choo highlighted strategic opportunities related to ISO 20022, an international standard for electronic data exchange between financial institutions and can combine or converge low and high-value real-time payment data, saying «It is ideal for financial services as it dramatically reduces duplication and complexity while improving governance, cost, and efficiency.»
«As the various ASEAN countries differ in their regulatory approaches to digital and real-time payment adoption, financial institutions that have not adopted ISO 20022 may find themselves with fragmented data standards limiting and perhaps excluding them from realising the true benefits of real-time payments.».
Challenges Remain
Despite the progress in payments modernization and nearly every major country in the region having robust domestic real-time payments infrastructure in place, there remain challenges with fragmentation and differentiation in the region.
«Asia is not a united entity like Europe that benefits from a standardised currency and a common legal structure. Hence there are challenges with fragmentation and differentiation,» Choo said.
Choo however, remains optimistic: «The direction of travel is that market forces — driven by the needs of businesses and consumers — will propel Southeast Asia towards the realisation of a multi-country real-time network. It is a complex undertaking, but one that ACI is committed to supporting.»
