Alternative payment methods
Mobile
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Navigating the rise of Southeast Asia's digital payment landscape
September 19, 2024•5 min
Southeast Asia is quickly becoming known as a region for rapid economic growth. For game developers, this is a hot new market with the potential to expand their player base and earn more revenue. However, understanding the complex local payment methods is crucial for success. Southeast Asia's gaming and payment ecosystem is unique, with each major market—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—differing significantly. This blog post will review popular payment methods across the region, with insights on how to best navigate this complex region and maximize its market potential.
The rise of super apps, or apps that offer a wide range of services, from payments and shopping to transportation and food delivery, has helped facilitate the growth of digital wallets across SEA. Consumers' ability to use a mobile device to conduct business has seen a jump in digital wallet use over traditional forms of payment like cash or credit and debit cards. However, payment method preference and popularity differ between nations in the region. While the following is not all-encompassing, it gives a solid idea of what is most common for each country and its consumers:
Southeast Asia's booming digital economy
Southeast Asia (SEA) is one of the fastest-growing regions in population and digital commerce, with a projected revenue of USD $1 trillion by 2030. When looking specifically at the gaming market, SEA accounts for half of all global revenue and will reach $152.1 billion in revenue by 2027. What's driving this massive growth? Cell phone proliferation is on the rise, making it easier for this previously cash-based region to transition towards more digital alternative payment methods, with consumers citing the convenience, security, and loyalty benefits as reasons for mass adoption. Banks and government incentives have also helped fuel this move, especially in the wake of the recent COVID-19 pandemic, which forced the global world to pivot when it came to continuing to sell goods and services. Initiatives like the ASEAN Digital Economy Framework Agreement and Project Nexus have made great strides in connecting fast payment systems regionally, creating a platform for cross-border transactions for more rapid, cheaper, and more efficient regional payments, and promoting financial inclusion. A great example is Thailand and Singapore, which connect PromptPay and PayNow payment systems and average thousands of transactions between $150–200 monthly.
The rise of super apps, or apps that offer a wide range of services, from payments and shopping to transportation and food delivery, has helped facilitate the growth of digital wallets across SEA. Consumers' ability to use a mobile device to conduct business has seen a jump in digital wallet use over traditional forms of payment like cash or credit and debit cards. However, payment method preference and popularity differ between nations in the region. While the following is not all-encompassing, it gives a solid idea of what is most common for each country and its consumers:
- Philippines: Cash remains popular in the Philippines, but digital wallets like GCash and Maya are growing. Maya allows for cash top-ups and online purchases without traditional bank accounts. DragonPay is another reputable online payment gateway offering secure transactions.
- Thailand: Credit and debit cards and digital wallets like PromptPay and PayPal are popular for domestic and international transactions.
- Malaysia: Online banking through systems like FPX is convenient, while e-wallets like GrabPay, Boost, and Touch 'n Go offer various services and promotions.
- Singapore: E-wallets and mobile apps like GrabPay, PayLah!, and Singtel Dash offer many features, including mobile payments, money transfers, bill payments, and QR code transactions, making them integral to daily life.
- Indonesia: DOKU and OVO are popular online payment methods in Indonesia that offer versatile services like digital wallets and payment gateways, facilitate various transactions, and promote financial inclusion.
- Vietnam: While cash is still king, Vietnam's population has seen significant growth in alternative payment methods. This growth has led to competition among over 40 digital wallet providers, including MoMo, Viettel Pay, ZaloPay, and AirPay, with MoMo holding the largest market share.
Southeast Asia's gaming landscape
It's no surprise that SEA's rise in mobile proliferation has not only had a positive effect on the digital economy but also provided mobile and PC gamers with more ways to pay for games. While regional trends vary, mobile gaming dominates Southeast Asia, and PC gaming is prevalent in East Asia, with popular genres including battle royale and strategy games. Mobile gaming alone accounted for 70% of the market's $4.4 billion revenue in 2019 and is characterized by diverse preferences with popular titles like Genshin Impact, Free Fire, Arena of Valor (Honor of Kings), Candy Crush Saga, Call of Duty, Clash of Clans, and Fortnite. Esports is also a thriving sector, with a growing audience of nearly 30 million for mobile games like PUBG Mobile and Mobile Legends: Bang Bang leading viewership. However, breaking into this market requires understanding local payment methods and offering a variety of digital payment methods to cater to player preferences. Failing to do so can lead to up to 44% in lost revenue from abandoned carts and reduced player engagement.Breaking into Southeast Asia with Xsolla Payments
As a leading video game ecommerce company, Xsolla offers tailored solutions to help businesses thrive in the dynamic Southeast Asian gaming landscape. Our premier solution, Xsolla Payments, enhances the player experience and drives revenue with over 700 payment methods across 200+ geographies. With Xsolla, developers can optimize monetization by offering their players more local payment options, which can reduce cart abandonment rates by up to 32%. Xsolla Payments offers flexible integration options, from ready-to-use UI to headless checkout, allowing you to customize your checkout experience to match your game's branding. Feel at ease with our world-class anti-fraud system and in-house dispute management team to protect your transactions and manage all disputes. As your Merchant of Record, we handle all tax calculations and filings, ensuring compliance with international regulations. With Xsolla as your trusted partner, take your game to the next level and focus more on making top-tier titles. By partnering with Xsolla, feel confident and prepared to unlock the full potential of the Southeast Asian gaming market. Contact Xsolla today and explore how our solutions can take your business to the next level.
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