Asia beats Europe in developing new payments technologies

The region has attracted more fintech investments than North America and Europe.

Three in 5 (64%) senior industry leaders believe that Asia is a global leader in the rapid development of new payments technologies, according to Global Payments Innovation Jury 2017 sponsored by ACI Worldwide and organised by John Chaplin.

“Payments infrastructure in a multitude of Asian countries is ‘leap-frogging’ the legacy infrastructure of many card-dominated developed markets,” the report noted, with small markets like Hong Kong, Malaysia, and Singapore rapidly accelerating the modernisation of their payments infrastructure.

Only 14% of senior industry leaders believe that Europe can bring about the highest level of payments innovation for the next two years but believe that the region still offers a wealth of opportunities due to London’s thriving startup scene and the promise of PSD2.

Another 12% are placing their bets on Africa, 8% for North America, and 2% for Latin America.

Asia also attracts more funds from investments in fintech than North America and Europe amidst a growing middle class population eager to try out the latest payments technologies. Correspondingly, almost half (47%) of the senior executives believe that Asia is the best region to start a payments busienss followed by Africa (17%), Americas (14%), Europe (13%), and Latin America (9%).

Also read: Singapore banks net profit surge 27% in Q4 as they embrace fintech

The Middle East and Africa are seen as providing large market opportunities to tap the unbanked population as mobile penetration increases.

"Banks feel the strain from the rapidly changing digital world and have placed or will place digital strategy to cope with unprecedented challenges, said World Savings and Retail Banking Institute managing director Chris De Noose. "Banking in the 'Digital' era means always searching new ways to improve our locally focused banking model."

In Mainland China, for instance, Postal Savings Bank of China is leveraging on China Post’s e-commerce platform and has forged a partnership with Ant Finance to expand its payments services to the countryside. Similarly, the State Bank of India makes it a point to invest in fintech startups and launched YONO, which offers lifestyle products in addition to banking.

Also read: Japanese banks are joining the cashless revolution in digital shift 

"Established payments players, especially financial institutions, see an imperative to innovate as the size of the global payments market increases across multiple geographies – it’s clear that payments companies should not see nimble start-ups as a threat, but rather as a partnership opportunity,” said Paul Thomalla, senior vice president, ACI Worldwide.