SCMP China Conference: collaboration and innovation set to drive US$240 trillion global payments industry
- Collaboration and innovation will help build a sustainable ecosystem for the global payments industry, panellists at the China Conference: Southeast Asia said
- Initiatives such as Nexus, a BIS-led multilateral payment system, are helping to speed up transactions and reduce costs
The different stakeholders should join hands to enhance collaboration, streamline processes and address structural issues to improve speed, transparency and cut costs that have hobbled the sector for at least a decade, the panellists said at the conference organised by the Post on Wednesday.
“We as an industry need to collaborate further,” said Camilla Bullock, co-founder and chief executive of Emerging Payments Association Asia, which aims to strengthen and expand the payments industry. “It has to be a collaboration between the private sector and the public sector to get closer to align and coordinate targets … and to harmonise and recognise those different regulations.”
The call for closer integration comes as the industry needs to build a more sustainable ecosystem amid challenges brought on by efforts to launch and develop digital currencies in many countries.
Financial institutions and fintech innovators “must work closely with regulators to ensure that new payment innovations not only address the need of frictionless, cost efficient payment infrastructures but also to ensure that these innovations enhance the safety and security of the financial system,” said Shayan Hazir, HSBC’s chief digital officer for the Asean region.
The global payments market is valued at around US$240 trillion, according to EY, and one in four fintech companies in the world are payment tech companies.
The payments market has been boosted by innovation to cater to the needs of remote transactions during the coronavirus pandemic during the past three years, the panellists said.
The ecosystem of the global payments market, by virtue of its sheer size, requires many different players to cooperate, said Oluchi Ikechi-D’Amico, strategy and transactions partner at EY Parthenon. “Those players exist also within an organisation as well as across the industry.”
The recent launch of the Nexus concept has further excited market players, as it helps reduce costs, save time and encourage innovation, they said.
A prototype of the pilot that linked the Eurozone with the central banks of Malaysia and Singapore was successfully tested. The next step of the pilot is to link Malaysia and Singapore with Thailand, the Philippines and Indonesia, according to the BIS plan.
As the involvement of costly remittance service providers is reduced, it will open room for innovation from fintech companies, the panellists said.
“Digital payment apps launched by the government can be released to the people who do not even have a bank account,” Wu said. “You do not even need to open a bank account to access those countries’ digital currencies. This is an opportunity that I can see [for the industry and users].”