Keeping pace with Asia's payments journey

Asia’s payments landscape is a fast-moving space fuelled by innovation, in response to new business needs and expectations of corporate financial decision-makers.

To meet this desire for greater transparency, speed and efficiency – while at the same time minimising cost and friction – the digital payments market in the region has been growing at a rate of more than 30% a year.¹ And by 2025, the volume of non-cash transactions in Asia Pacific is forecast to surpass the one trillion mark.²

Inevitably, technology has been key to all this, explained Manoj Dugar, Regional Co-Head of Global Payments Solutions, Asia Pacific, HSBC. “This explains the surge of real-time payment and instant payment deployment across most jurisdictions in Asia, as well as [efforts to] modernise the existing infrastructure.”

For example, nearly 120 billion real-time payments (RTP) transactions were executed globally in 2021, marking 64.5% year-on-year growth. By 2026, the volume is projected to hit 430 billion.³

“In our view, Asia Pacific remains the most developed RTP region globally, with India, Hong Kong, Mainland China and Thailand leading the way,” said Yiu.

Cross-border activity has also been boosted by the launch of SWIFTGO and GPI instant to support banks in their bid to deliver real-time payments (RTP) internationally in a seamless way. In general, recent years have seen a notable uptick in cross-border transactions. According to figures from Statista, for instance, these topped US$150 trillion globally in 2022, up more than 20% from 2018.⁴

At the same time, Yiu welcomes what she describes as “progressive” action by Asia’s central banks. This includes, for example, building bilateral and multilateral market infrastructure to streamline cross-border payments.

Central bank digital currency (CBDC) projects such as mBridge and Dunbar are examples of this. “Wholesale CBDC settlement platforms like mBridge have the potential to transform cross-border RTP settlement over and above what fintechs are doing,” said Dugar.

These initiatives reflect the collaborative spirit among Asia’s central banks and a more conducive, pioneering regulatory environment, he added. “Regulators have been at the forefront in digitising the cross-border documentation process, given that many of Asia’s markets are capital intensive or capital controlled. The measures taken by regulators have really helped to digitise the treasury journey for many of our clients.”

Transforming the payments offering

To stay at the forefront of the market, HSBC has rebranded its payments unit to ‘Global Payments Solutions’. Yet this is more than just a name change.

“It represents our transformation journey and commitment to continuously invest in our capabilities to support our customer growth,” explained Yiu.

More specifically, this means driving innovation in the payments landscape with infrastructure such as instant transactions, e-commerce and on-demand insights via APIs, to support customers’ new digital business models and growth ambitions.

Already the bank processes close to 4 billion payments per year across more than 55 markets and 130-plus currencies. And the GPS offering is designed to take this to the next level.

An important part of catering to the end-customer with new solutions is taking a more collaborative approach, partnering with fintechs and other technology providers, for example.

“When we approach digital transformation, we have to see it through the lens of a client,” said Yiu. For instance, this means understanding the pain points they are trying to resolve and the value they are seeking.

Among the various solutions HSBC has created in this way is an automated offering for a multinational online food-delivery service company that is a pioneer of quick commerce.

The client’s goal, said Dugar, was to increase satisfaction among its riders, leveraging instant and smarter payments. “We provided a fully automated solution which calculates, reconciles and pays riders’ commission with real-time connectivity and instant payment, saving close to 30 hours a month in manual processing. Riders are also in control of their income, leading to a loyal delivery fleet. Based on this success, we are launching in other markets, especially across Asia.”

This type of co-creation involves HSBC engaging customers at an early stage, to brainstorm on innovative yet practical solutions that help address pain points to get them ready for the future. “Collaboration is now at a new level because of the more agile ways of working, improved technologies and a broader shift in mindset,” added Yiu.

Harnessing data to help businesses grow

Utilising data more effectively is another way that payments and infrastructure providers such as banks are creating new opportunities for clients going forward.

This involves harnessing the flow of data. “It’s not only about helping clients protect and optimise the data but, more importantly, helping them on their growth journey,” explained Dugar.

A case in point is HSBC’s automated process for Unilever, providing the international consumer brands company with greater future and intra-day cash-balance visibility.

“We are exploring options to use these datasets to create more value-added solutions as well as to help our clients with the payments and business needs, and more importantly, to help them grow,” added Dugar.

More broadly, this approach also highlights the new-found importance of digital payments to Asia’s financial services ecosystem. “All of us should keep an open mind… and find a partner with a long-term vision and solid foundations to co-create solutions to optimise value,” said Yiu.