The ASEAN QR Payment Ecosystem and How It Is a Blueprint for Success

In its 2024 Global Payment Report, Worldpay states that the East Asian region is seeing a surge in QR payment usage. The report stated that “the success of Alipay and WeChat Pay in China decisively established that QR codes could drive mass consumer adoption of digital payments.” The report went on to say that QR code payments have become ubiquitous across Southeast Asia due to their simplicity, standardization, inexpensive operation for merchants, and support for underlying infrastructure from central banks.

Countries inside the ASEAN have seen a marked increase in their digital footprint with the digital economy value in the region set to be nearly worth US$2 trillion by 2030, as forecast in the ASEAN Digital Economy Framework Agreement (DEFA). To help facilitate the increased use of QR payments, ASEAN governments, over the last decade, have begun introducing regulations across the region to standardize QR payments with the goal of creating a localized ASEAN payment ecosystem.

The number of cross-border payment systems being launched is set to increase over the coming years, so the ASEAN region is on the verge of accomplishing a global first—a fully-linked inter-border QR payment ecosystem.

For the ASEAN region, an interoperable QR payments ecosystem will lead to an easier transition from a cash-dominated payments market to a post-COVID-19 digital-based market. This can be seen in reporting by major banks in the region with declining physical card usage and a regional percentage drop of 20% since 2020 according to the ASEAN digital footwork report.

The emergence of a cross-border QR ecosystem brings several benefits that will appeal to several different types of groups:

• QR payment vendors need to stress the rapidity of QR codes in streamlining payment processes, allowing businesses to process transactions. This method significantly reduces the time it takes to complete a transaction compared to traditional payment methods.
• What makes Asian QR platforms different from their Western counterparts is that they offer more than just a QR payment platform. QR payment vendors should look to incorporate it into a digital wallet (e.g., India’s GoPay Digital) or ensure that it can offer a business or community benefit.

For example, WeChat Pay operates within the WeChat environment and allows for real-time interaction with customers. Businesses can communicate with their customers directly, handle customer service inquiries, and publicize promotions using the app. This high level of engagement can create a more dynamic customer experience and foster a sense of community around a brand.

• Lower cost alternative compared to traditional Point of Sale (POS) systems. QR code payments offer competitive foreign exchange rates for their users because the apps can be enabled to use local currency transactions, allowing merchants to bypass global card schemes like Visa and Mastercard. The barrier to entry is also reliant on the merchant owning a smartphone, which, as of 2023, the ASEAN average for smartphone ownership was 99% according to an official ASEAN report.
• Security is a major concern, especially for Western countries, where QR codes are seen as a less secure option compared to traditional POS systems. This is due to the public perception that QR payments are easily subject to fraud, as can be seen with “quishing.” To combat this perception, QR payment providers in Europe and North America, specifically, could consider the security already deployed in Asia. WeChat Pay, for example, demonstrates a strong commitment to security through its multi-layered approach, which includes monitoring transactions for fraudulent activity in real time and adhering to stringent data protection regulations. For businesses, this means fewer instances of fraud, reducing the associated costs and reputational risks.