The next frontier in global payments goes beyond borders

One of the more interesting innovations within fintech to watch has been the technology that connects consumers to merchants.

How can we move beyond borders to enable local brands to more easily connect with global customers?

The use of mobile wallets at point of sale (POS), as well as online and mobile commerce interactions, has skyrocketed as consumer behavior has evolved. The use of super-apps and QR-code-driven payments, especially across Asia and South Asia, has added fuel to this fire in the shift toward digital.

In 2021, mobile wallets’ share of global POS transactions exceeded $13 trillion, or 28.6% of global POS transaction value. By 2025, this is expected to rise to 38.6%. But this is just the beginning.

We have moved from disparate systems of fragmented consumer and business relationships to ones that are interoperable, embedded, and ubiquitous. These large, connected ecosystems can help cement the bond between merchants and customers at the right place and at the right time, as in the case of Alipay+, which combines multiple digital wallets in one solution across geographies.

While payments between consumers and merchants have always been the glue that enabled commerce, the ability to harness and leverage the data within these transactions will help small to medium-sized businesses (SMBs) grow and connect to consumers in the rapidly transforming digital economy.

What does this mean in terms of everyday life? More importantly, how can we move beyond borders to enable local brands to more easily connect with global customers? As global travel resumes, consumers will demand the same seamless and secure digital experience they have come to enjoy and rely upon, regardless of where they are. For merchants, it is now more important than ever to cater to the wide variety of payment methods that consumers use, regardless of where they are.

Imagine being in Singapore and paying for the local Hainanese chicken rice dish with your own mobile wallet, while the local merchant receives the payment in Singapore dollars in real time. Or imagine having a meal sent to your hotel room via a local food delivery service, regardless of where you are and what currency the merchant accepts. What if we can pay for a taxi in a new city as seamlessly as we could in our home country, because the connection between systems and merchants and consumers always just works. It is not magic, but it feels pretty magical when payments are no longer an obstacle in connecting what matters.

Facilitating interoperability of these transactions efficiently, however, requires an intermediary solution that connects merchants with all the different mobile payment providers. Without which, local merchants will need to integrate with each digital wallet individually. For SMBs, this could become rather time consuming and resource intensive.

Unsurprisingly, Southeast Asia has become yet again a battleground for companies looking to roll out innovative solutions to meet varying market needs. With 11 countries, each with their own languages and cultures, more than 681 million in population combined and high smartphone penetration, the region is far from being a monolith. For any payment solution to be successful, localisation is key. And now any bank app, wallet, or acquirer can become a partner in this digital payments ecosystem and benefit from expanding their acceptance locally overseas, offering a much wider reach and adding more value for merchant clients.

Beyond providing a frictionless experience for consumers, having an interconnected ecosystem of local digital wallets can help merchants reach a wider demographic of audience to drive adoption and customer loyalty, while catering to the unique needs of each market.

The business opportunity of such an approach is massive, beyond those who are already mobile-native and connected in various ecosystems. New ways to effectively market these customers with analytical and messaging tools can help to expand the physical and digital footprint for businesses anywhere.

The recent Worldline initiative that seeks to extend a full-scale multi-country integration with the Alipay+ solution signals where the evolution of payments will go next: beyond borders and more inclusive to both consumers and merchants.