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The View | Fintech in Asia must go beyond mobile payments to be inclusive
- While mobile payment rates are growing, a massive proportion of the region’s population remain unbanked and thus lack access to financial products that are the backbone of financial security and moving up the economic ladder
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Not a week goes by without more news about fintech as a driver of financial inclusion. Google reports around 1,000 news items about “fintech and financial inclusion” in the past 24 hours, and over 12,000 in the past seven days alone.
Fintech mergers and acquisitions reached a new high of US$348.5 billion in 2021, while private equity investment in fintech reached new highs as well. Banks are among the key players, often through dedicated venture or sandbox arms.
In 2018, 92 per cent of people in Chinese cities reported using WeChat Pay or Alipay as their primary means of payment. Mobile payments constituted over 83 per cent of all payments transacted. The government has allowed the development of advanced digital financial infrastructure, outside the control of the big four state banks. The launch of the country’s digital currency is the ultimate tool to achieve 100 per cent financial inclusion.
These trends seem to imply fintech could resolve Asia’s deep fissures in financial access. But the region is full of contrasts.
There has been vast progress in the payments space, even outside China. Slightly over 41 per cent of Asians have a mobile wallet – 81 per cent in Indonesia, 68 per cent in the Philippines and 84 per cent in Thailand – and have used it to make mobile payments. Mobile payment company Boku forecasts Asia will have 2.6 billion mobile wallet users in 2025.
However, while mobile payment rates are growing, only half the population of Southeast Asia has a bank account. Being able to make mobile payments doesn’t mean one has access to savings, loans and other financial products that are the backbone of financial security and moving up the economic ladder.
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