Digital payments in Southeast Asia to top $1t by 2025, says report

Having reached an inflexion point, digital payments in Southeast Asia are poised to exceed $1 trillion in transaction value by 2025, according to a fintech study conducted by Google, Temasek and.

The report, which covers payments, remittances, lending, insurance and investments, says that digital payments and remittances in Southeast Asia are currently at or approaching inflexion points driven by the region’s high smartphone penetration and engagement.

“The other services—lending, investment and insurance—are still emerging, but each should grow by more than 20% annually through 2025,” the report said.

By 2025, digital financial services are expected to generate revenues of about $38 billion and account for 11 per cent of the total financial services industry.

The region’s digital remittance market is expected to facilitate a total flow of $28 billion, while digital insurance is likely to see $8 billion in gross written premiums. Meanwhile, digital investments are projected to grow to as much as $75 billion in assets under management.

However, it is digital lending that is expected to be the biggest revenue generator, with a loan book predicted to grow to $110 billion by 2025 led by innovations in consumer lending and SME working capital financing.

With a population of 570 million and a booming GDP expected to reach $4.7 trillion by 2025, the six largest countries in Southeast Asia represent one of the world’s largest and fastest-growing regions. Within the region, the financial services landscape is diverse and highly fragmented comprising of three distinct customer segments: the banked, underbanked and unbanked.

The report identifies the banked segment as a major focus for established players, while the underbanked segment has attracted consumer tech platforms. Contrary to common perception, pure-play fintech and consumer tech platforms are not making a meaningful impact on the unbanked segment, the report said, citing the need for greater intervention by the government to accelerate development.

Fintech investment in Southeast Asia grew by almost 140 per cent annually from 2016 to 2018 fueled by readily available funding. Fintech players raised over $2 billion in funding over the last three years, with over $1 billion raised in 2018 alone.

Consumer tech platforms such as ride-hailing and e-commerce companies raised over $24 billion over the same period, and their investments to build digital financial services most likely surpassed the amount raised by the standalone fintech players, the report noted.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.