The Future of Payments in APAC: From Fragmentation to Global Leadership

Countries in Nexus Initiative

Number of countries involved in the Nexus initiative for multilateral real-time payments.

Real-Time Payment Adoption

Significantly stronger

APAC's adoption of real-time payments is notably stronger compared to other regions.

Core AI Applications in Payments

Key use cases where AI is delivering value in payments operations, including transaction repair and customer support.

§ 01 Executive Snapshot

What: The payments landscape in Asia-Pacific (APAC) is evolving rapidly, driven by real-time payments and cross-border interoperability.
Who: Arun Kini, Managing Director for Payments APAC at Finastra, and various banks and payment systems across APAC.
Why it matters: APAC's distinct fragmented payment systems are innovating faster than Western markets, setting a precedent for global payment ecosystems.

APAC has multiple domestic real-time payment systems, unlike the unified systems in Europe and the U.S., leading to country-level innovations.
Initiatives like Nexus are enabling multilateral interoperability for real-time cross-border payments among countries such as India, Indonesia, and Singapore.
AI is being applied in payments operations for efficiency, improving transaction repair processes and customer support handling.

The payments landscape in APAC is characterized by a transition from cash-heavy economies to digital payments, particularly in Southeast Asia.
The region's distinct approach to payments is influenced by practical needs such as financial inclusion and support for underserved populations, contrasting with Western models.

Banks in APAC face immediate challenges in meeting customer expectations for cost-effective cross-border real-time payments due to interoperability issues.
Long-term, banks must modernize their payment systems to support a flexible ecosystem that accommodates real-time payments, stablecoins, and other digital currencies.

Legacy infrastructure poses significant challenges for banks as they adapt to new payment models and manage liquidity effectively.
Compliance and regulatory hurdles remain a concern as banks attempt to integrate cross-border payment systems with varying local requirements.

The success of initiatives like Nexus in achieving multilateral interoperability will be a key indicator of progress in APAC's payment landscape.
Future developments in AI applications within payments and the integration of stablecoins into regulated payment ecosystems will signal the industry's readiness for transformation.

§ 07

What are the key drivers of the evolving payments landscape in APAC?

The payments landscape in APAC is evolving rapidly due to real-time payments and cross-border interoperability.

Why is APAC's payment system considered fragmented?

APAC has multiple domestic real-time payment systems, unlike the unified systems in Europe and the U.S., leading to country-level innovations.

How is AI being utilized in the payments sector in APAC?

AI is being applied in payments operations to improve efficiency, particularly in transaction repair processes and customer support handling.

What challenges do banks in APAC face regarding cross-border payments?

Banks in APAC face challenges in meeting customer expectations for cost-effective cross-border real-time payments due to interoperability issues.