The digital economy is poised to become a cornerstone of global growth. Forrester projects the global digital economy to reach US$16.5 trillion ($22.08 trillion) and capture 17% of global GDP by 2028. Southeast Asia and the Middle East are expected to be among the fastest-growing regions, with reports estimating digital economy revenues from those markets to hit US$89 billion this year and US$780 billion by 2030 respectively.
Re-globalisation and the rise of digital financial services, such as digital wallets, are among the drivers of the digital economy’s growth. “The world is generally moving towards re-globalisation, which has helped emerging markets step into the spotlight as global trade and digital commerce become more inclusive. Countries in Southeast Asia and the Middle East that were previously underserved or had underdeveloped payment infrastructures are now playing an increasingly important role in the global economy,” says Wang Hu, co-founder and president of Singapore-headquartered PayerMax.
Wang Hu, co-founder and president of PayerMax
He continues: “Domestic payment schemes (like Indonesia’s DANA e-wallet) have also taken off quickly, with many of them being driven by government initiatives. The rationale for developing local payment networks is to boost financial inclusion within the country as well as reduce dependency on international payment systems.”
Additionally, new cross-border payment solutions are on the rise. Luke Boland, global Fintech lead at Standard Chartered, says: “Today, we’re seeing the growth of payment tech firms coming into the cross-border payments space, looking at different ways to move liquidity, use foreign exchange (FX), and leverage local payment networks. We’re working with those firms, including PayerMax, to use application programming interfaces (APIs) to link payment processing and FX to enable real-time local payments. Doing so will better support the collection and distribution of last-mile payment for merchants.”
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Luke Boland, global Fintech lead at Standard Chartered
Wang and Boland share more on how their companies are jointly helping global brands address the challenges in cross-border payments, on the sidelines of the Singapore Fintech Festival 2024.
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Solving payment fragmentation
The steady growth of Southeast Asia's and Middle East’s digital economies is making these regions increasingly attractive for merchants looking to expand or establish a presence. “However, the payment infrastructure there is still underdeveloped. This hinders efficient cross-border operations, especially in emerging markets, and makes it challenging for businesses looking to capitalise on those regions’ burgeoning market,” says Wang.
Given the fragmented payment infrastructure, cross-border merchants must accept a range of payment methods to meet the diverse needs of each market and, ultimately, boost revenue. At the same time, they must ensure transaction security and adhere to the varying regulatory requirements across different jurisdictions.
Merchants can address those challenges by leveraging PayerMax’s solution, which supports over 600 local payment methods and over 70 currencies across more than 150 markets, including Southeast Asia, the Middle East and Latin America. Wang says: “When global companies enter emerging markets, they may not know which is the right payment method for each market. PayerMax offers a wide selection of payment methods (including e-wallets, bank transfers, prepaid and carrier billing) to help them cater to consumers’ diverse needs.”
PayerMax also boasts a robust financial-grade risk control system. This is backed by licenses and credentials from regulatory authorities in key markets — like Hong Kong (China), Indonesia, Saudi Arabia, Singapore, the Philippines, Thailand and the UAE — and official certifications from global banks. “Getting these payment licences is crucial in ensuring trust in payments and assures our customers (which are global merchants) their business is compliant with local payment regulatory requirements,” adds Wang.
A cross-border payment solution must also ensure high transaction success rates, implement robust fraud prevention, effectively manage chargebacks and maintain high uptime. Wang says PayerMax uses artificial intelligence (AI) to deliver these capabilities to merchants. “We utilise AI in several scenarios to improve operational efficiency, including settlement processing, real-time monitoring of every payment channel’s and merchant’s performance, and fraud prevention.”
For instance, PayerMax’s real-time proprietary anti-fraud system uses advanced machine learning algorithms and AI to analyse vast datasets and identify fraudulent patterns. Suspicious transactions can, therefore, be detected in real time and blocked before they are completed. Given its ability to prevent significant and large-scale fraud risks, PayerMax’s solution boasts a chargeback rate of 0.1%, well below the industry standard of 1%.
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To further help simplify the complexities of cross-border operations, PayerMax offers value-added services such as risk management, foreign exchange (FX) management, payment marketing, and finance and tax support.
Bridging cross-border payments with a global partner
Merchants with a global footprint need to support their operations with a trusted payment solution that can effectively serve multiple markets and regions. PayerMax, therefore, partnered with Standard Chartered to ensure its solution can deliver that capability by tapping on the bank’s strong global network and deep local knowledge of emerging markets.
PayerMax integrated its solution with Standard Chartered’s FX Scale product to link accounts in other countries through its hubs in Hong Kong and Singapore. This integration supports multi-currency virtual accounts and batch payment solutions, helping merchants efficiently manage multi-currency accounts and distinguish fund flows by currency and channel.
“Working with Standard Chartered enables us to build a much more robust payment network and efficient payment solutions for global merchants. By leveraging Standard Chartered’s banking infrastructure, we can offer an easy-to-use and full-fledged payment solution while reducing transaction costs and payment processing time. The partnership also enables merchants to centralise their treasury management,” explains Wang.
Boland adds that the partnership is a symbiotic relationship. “Standard Chartered is an emerging market bank, and Southeast Asia and the Middle East are our key franchise markets. We’re a retail bank connected to local payment rails. This is where our relationship with PayerMax is complementary – PayerMax’s licensing approach across Southeast Asia and the Middle East matches our footprint.”
“We’ve learnt a lot from this partnership and gained insights on how to adapt and tailor our products to PayerMax’s needs. We will continue bringing our network and solutions to clients like PayerMax so that they can better support global merchants’ cross-border operations, especially in emerging markets, and target new customer segments,” says Boland.
The global digital economy is on a promising growth trajectory. However, the fragmented payment infrastructure in Southeast Asia and the Middle East can hinder businesses’ growth in those regions. By tapping into solutions like PayerMax, which helps streamline cross-border transactions, global companies can more confidently unlock growth in emerging markets.
