Digital payment scene across Asean

Across Southeast Asia, there is a fierce battle for being the leading digital payment provided. Unlike in China where the market is dominated by AliPay and WeChat Pay, the ASEAN market is in its infancy and is very fragmented. Currently, there are about 40 e-wallets in Malaysia, 27 e-wallets in Singapore, 37 e-wallets in Indonesia, 26 e-wallets in Vietnam, at least 17 e-wallets in the Philippines.

Large untapped market for digital payments

Although there are a large number of e-wallets, the vast of Asean market remains untapped. The population of Vietnam is about 96 million people. 40% of them are under 25 years old. Almost 90% of Vietnamese are still preferring using cash. The country experienced an e-wallet boom in the last few years. Vietnam’s total transaction value in the digital payments segment is US$8,523 million in 2019, presenting a 20.3% year on year growth. There is no notable winner in this market yet.

Fintech penetration in Indonesia remains low as Indonesia has a population of 264 million but smartphone penetration was only 24%  in 2017. This means that a lot of users are not exposed to the e-wallet concept yet.

Thailand, on the other hand, has a market of 69 million people. 31% of them are under the age of 25. Digital technology is the focus of the digital push in Thailand 4.0. Thailand 4.0 is the economic model that “aims to unlock the country from several economic challenges". The government launched a digital wallet PromptPay. Support of government and the population base are a great impetus for Thailand's digital payment market.

To understand how the different brands compete with each other, we can look into a comparison table for their main features: 

Notes:

1. True Money is the e-wallet brand under Ascend Money.
2. GCash provides overseas payments from US sites by issuing GCash American Express virtual sites.
3. User will need a physical Paymaya card to make cross-border payments.  

We can see from the table that all the e-wallets have similar basic features – QR code payment, transfer money, and withdrawal. The main differentiator between the brands is the cross-border service.

Some e-wallets are already offering cross-border payments or cross-border remittance services. Those who do not support cross-border transactions are having plans to do so. Touch ‘n Go is co-operating with Singapore’s EZ-Link. They will issue a dual-currency card at the end of 2019.

Boost has joined forces with Singtel’s VIA. This will enable Boost users to make overseas payments in Singapore. PromptPay is in talks with PayNow for cross-border remittance between Singapore and Thailand. Cross-border services and interoperability have been an inevitable trend of digitalization development.         

Balance limit for each e-wallet

Brand	Country	Wallet ( balance) limit
Touch ‘n Go	Malaysia	·       RM 200 for starter account1 ·       RM 1,500 by linking with a bank account ·       RM 5,000 by registering for an RFID (radio-frequency identification)
GrabPay	Malaysia	·       RM 500 for starter account ·       RM 1,500 for upgraded account2
Boost	Malaysia	·       RM 200 for starter account ·       RM 1,500 for premium account3
Singtel Dash	Singapore	·       S$999
DBS Paylah!	Singapore	·       S$999 per day ·       S$2000 for DBS/POSB digibank customers
GrabPay	Singapore	·       S$5,000
GCash	Philippines	·       P40,000/month for starter account ·       P100,000/month for upgraded account
PayMaya	Philippines	·       P50,000/month for starter account ·       P100,000/month for upgraded account
Momo	Vietnam	·       VNĐ20 million/day
Go-Pay	Indonesia	·       IDR 1 million for starter account ·       IDR 10 million for upgraded account
Ovo	Indonesia	·       IDR 2 million for starter account ·       IDR 10 million for upgraded account

Another feature to look into is the balance limit for each e-wallet. Most e-wallets offer two tiers: a starter tier to entice new users to get started with it, and an upgraded tier for verified users, either with a bank account or a valid national ID. This approach prevents excessive fraudulent behavior while also making it easy for new customers to get started on their e-wallet.

Head of the pack-Indonesia

Note:

MY – Malaysia; SG – Singapore; TH – Thailand; PH – Philippines; VN – Vietnam; IDN – Indonesia                    

Based on the graph above, we can clearly see that Indonesia is currently leading the e-wallets market compared to the other country as they have the highest number of user and also highest acceptance point leading by Ovo and GoPay. However, this does not mean it is over for the other players in the market. They would have to step up their efforts if they want to capitalize on the growing digital payment trend. In fact, the growing ASEAN region market has made itself a lucrative investment target for other financial institutions around the world. According to the Google-Temasek report, the researcher has predicted the region internet economy will rise to $250 billion in the year 2025. Besides, Indonesia is also predicted as the most fastest-growing region by the year in 2025 by the same report.

The Game of Capital

Fund-raising of the e-wallets

Brand	Time	Amount raised	Investor
Line Pay	2018M	US$25 million	Advanced Info Service
	2019	US$182 million	Line
True Money	2016	N/A	Ant Financial
GCash	2017	N/A	Ant Financial
PayMaya	2018	US$175 million	Tencent
	2018	US$40 million	International Finance Corporation
Coins.ph	2014	N/A	N/A
	2015	N/A	N/A
	2016	US$5 million	Quona Capital
	2017	US$5 million	Naspers
	2019	US$72 million	Go-Jek
Momo	2013	US$5.8 million	Golden Sachs
	2016	US$28 million	Standard Chartered
	2019	US$100 million	Warburg Pincus
Moca	2017	US$200,000	Access Ventures LLC
	2018	N/A	Grab
Dana	2018	N/A	Ant Financial
Ovo	2017	US$116 million	Tokyo Century Corporation

                                   

The ASEAN e-wallet market has attracted massive funds over the last few years. China's duopoly e-wallet players Ant Financial and Tencent expand the battlefield to the ASEAN market by investing in local e-wallets. Ant Financial invested in True Money in Thailand, GCash in the Philippines and Dana in Indonesia. Tencent, on the other hand, invested in the Philippines e-wallet PayMaya. Other tech giants like Go-Jek and Grab follow closely and make their bet on the promising brands. The fund injection and technology import from the leading tech firms greatly stimulated growth in this region.  In 2018 Marketing and promotions are not cheap. To compete, securing funding from established companies gives these growing companies a chance to stand-out in their marketing and customer acquisition campaigns.

Lead by example

Show, don't tell: exemplary behavior is a more effective leadership style than just giving orders.

If your boss always comes to the office in shorts and a T-shirt but demands you wear a suit, you might be reluctant to follow his orders. Conversely, you'd probably feel out of place wearing a T-shirt and shorts when your boss dresses formally to make a better impression on clients.

If you're gonna talk the talk, you gotta walk the walk. That means leaders need to make sure that they themselves act according to their team's values.

Steve Skarke makes for a great example. When he became plant manager of Kaneka Texas, a polymer manufacturer, he realized that the company's goal of becoming a "world class plant" was not reflected in their housekeeping: there was garbage everywhere.

What did Skarke do? He bought a garbage pail and, without comment, started collecting garbage in the plant every day. After just a few weeks, he noticed one day that there wasn't enough garbage around to fill his pail. What changed? The employees had learned from his behavior: they realized that in order for their plant to be "world class," it had to be clean, and started cleaning up themselves.

Since no single person can do everything, the best leaders encourage others to behave in line with established values. They need to make everyone feel responsible for teaching others to live the shared values.

Telling stories is one effective method of doing so, because people can relate to stories and are likely to retell and spread them. Phillip Kane, president of Wingfoot Commercial Tire Systems, would send a regular letter to his 25,000 employees with stories about the most important lessons learned in the company each week. By talking about the stories, and reciting them to others, Kane's staff indirectly started educating others.

Be clear of shared values, and stick to it

Avoid flip-flopping: leaders should be clear about their own and the team's shared values.

Have you ever known people who constantly change their opinion depending on who's around? Chances are you don't feel comfortable placing a whole lot of trust in them.

As a leader, it's critical to be clear about your opinions. Doing so inspires trust and increases good work performance in teams.

But before openly defining the team's and their own values, leaders need to know exactly what those personal and professional values are.

Our own values affect everything we do. For example, if a leader values an obedient staff over a staff that takes the initiative without his permission, it will affect the way the staff acts.

According to studies, leaders are more motivated and productive when they define their own personal values. So at this point, you need to define your own values. One way of doing so is to examine your past and ask yourself which values have influenced your decision-making processes.

At this point, leaders should be clear about their own and the team's shared values. They should ensure that everyone's values are talked about openly. That way, the team can reach a certain level of agreement.

What's more, research shows that, if team members' values match the firm's, commitment to the firm will increase. One General Electric (GE) employee proved just that.