BANGKOK Cash is still king in Southeast Asia, but may be dethroned sooner rather than later as the region embraces the cashless society using smartpones tied to mobile payment systems.
One rising star in the cashless market is Thailand's Rabbit transit card, with 7 million domestic users. The Bangkok Mass Transit System (BTS), which operates the city's rail system, will start accepting a smartphone version of Rabbit at its ticket gates as early as this year.
BTS teamed up with the Thai unit of Line, a Japanese messaging program, to develop the app, dubbed Rabbit Line Pay. Some restaurants are already accepting Rabbit Line Pay for payment, and the partners hope to expand the network further to retail outlets, with the goal of making it the de facto standard in Thailand.
Other mobile payment systems are also in the works. Kasikornbank, a major Thai bank, has developed a system called K-Pay, which is currently being tested at dozens of dining venues and food stalls.
In Singapore, Oversea-Chinese Banking Corp. just launched a mobile payment app that can be used at over 1,000 merchants, including the Robinsons department store chain and fashion retailer Zara. By using the app to scan a QR code at the cashier, customers can pay for purchases directly from their OCBC accounts.
Meanwhile, Singaporean startup Liquid Pay is already accepted at over 100 food stalls, with plans to expand the figure to 25,000 retail locations by the end of the year.
Smartphone payments in Indonesia are skyrocketing among motorcycle taxi users thanks to the ride-hailing company Go-Jek. Last year, the company launched Go-Pay, a virtual wallet that has eliminated cash payments for 50% of transactions to date. Go-Pay can be used for a growing number of Go-Jek's ancillary operations, such as food deliveries and personal shopping services.
Singapore-based Grab is also entering the mobile pay market in Indonesia. In April, the company announced plans to acquire Indonesian start-up Kudo, which runs an online-to-offline payment service through its network of more than 400,000 agents in 500 cities and towns, including rural areas. Users visit these agents to make cash payments for online purchases, insurance and more.
Grab wants to integrate Kudo's platform with GrabPay, its own mobile platform. Kudo's presence in rural Indonesia will give GrabPay access to the unbanked, low-income population and the growing middle class. "We are specifically looking at the growing economy [of] younger, moving-through-the-classes [population]," said Jason Thompson, head of GrabPay, in a recent interview with Nikkei Asian Review.
UNTAPPED DEMAND The region is primed for mobile payment systems: On average, about 50% of the population in six major Southeast Asian nations use smartphones, according to British research firm Euromonitor. That figure is expected to top 70% in 2021, approaching the 80% rate of Japan and the U.S.