After two difficult years of coping with the COVID-19 pandemic and its economic repercussions, the Southeast Asian digital economy is expanding and delivering many cutting-edge inventions and solutions to the world. The pandemic hastened the adoption of disruptive digital technologies, which present prospects for advancing society and the economy.
The digital economy of Southeast Asia will surpass USD 300 billion by 2026, according to a new report commissioned by a major payments platform, 2C2P, and Merchant Risk Council (MRC), a non-profit global membership organization that offers eCommerce fraud prevention programs, risk management, and payments optimization.
Six ASEAN members, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, were polled for the research "How Southeast Asia Buys and Pays: New Opportunities, Connectivity, and Risks." The goal of the study was to identify the developing possibilities, hazards, and vulnerabilities in the area.
Southeast Asia's rapidly growing digital economy is being fueled by a number of causes, including the development of the sharing economy and eCommerce, the region's openness, a rise in online travel, the uptake of digital services, and more.
From 2021 to 2026, ASEAN's digital economy is expected to grow at a rate of 17.1%, exceeding that of China (12.7%), Europe (10.2%), and the United States (7.2%). Spending on digital services per person will increase by 109% from 2021 to 2026, from 128 to 455 USD. Digital payments will increase from 80% in 2020 to 92% in 2026, driving a 121% increase in digital economy spending by that year.
By 2026, consumer payments in Southeast Asia are expected to account for 14% of the gross merchandise value (GMV) of the digital economy, an increase of 133% from 2021. Domestic payments will increase by 296%.
Card payments will dominate in 2026 with 93.9% of the market followed by domestic payments (89.5%) and mobile eWallets (88.3%). With alternative payments reaching 25%, the Buy Now Pay Later (BNPL) payment mechanism will be at 17%.
These figures demonstrate that ASEAN is now open for business, and startups should begin considering how they might expand into other regional nations, optimize their potential, and embrace all-encompassing payment solutions to strengthen their businesses.
With its young, tech-savvy population, growing 5G infrastructure, and digital payment choices, Southeast Asia has all the makings of a successful market.
Source: TechCollectiveSEA.com
