Payment giant Stripe plots Southeast Asian expansion
- Stripe sees expansion within Southeast Asia within the next six to 12 months, as the region holds a huge potential considering the booming digital payment usage.
- Stripe also sees a huge potential in the payment segment with the rise of BNPL as a low-commitment, user-friendly and budget-focused alternative to credit cards.
Global payment processor, Stripe, is looking to expand throughout Southeast Asia in the next six to 12 months, after setting up a strong presence in Singapore and Malaysia. The 12-year-old company, which is one of the world’s most valuable startups, has been investing heavily in this region for the past couple of years, and plans to up its ante in the near future. The San Francisco- and Dublin-based fintech sees a huge potential in the region, simply because of its booming digital payments usage, more so since the pandemic.
Stripe’s Southeast Asia Revenue and Growth Lead Sarita Singh shared the company’s intention to ramp up its efforts across Southeast Asia, during the launch of Stripe Terminal in Singapore on Thursday. “We have operations in Singapore as well as people on grounds in Malaysia, but we have expansion plans around Southeast Asia over the next six to 12 months,” Singh shared during the media briefing in Stripe’s office in SIngapore.
The payments giant entered Singapore in 2016 followed by Malaysia in 2019, with an interbank transfers pilot program in Indonesia in early 2020. So far, Stripe has garnered a good number of payment partners, which include top Southeast Asian players like GrabPay and other notable startups. For the upcoming expansion however, Singh did not specifically mention where exactly would Stripe expand to, but did mention that the growth is notable across the entire region.
Southeast Asia is undoubtedly a hotspot for digital payments—making it an ideal region for Stripe to move further into. As a result of changing consumer and retail trends, and more inclusive payment options, IDC, in its 2021 report, foresees e-commerce spending to rise by 162% to reach US$179.8 billion by 2025 across the region, with digital payments accounting for 91% of transactions.
The report also highlighted that the e-commerce market will become more accessible with 188.6 million new users by 2025. The largest markets for e-commerce payments are forecast to be Indonesia (US$83 billion), Vietnam (US$29 billion), and Thailand (US$4 billion).
“The digital transformation of Southeast Asia and the Asia Pacific region is opening a range of opportunities, especially for younger generations. Many Asian countries are even in the lead globally in certain sectors of digitalization,” Singh shared.
According to the World Economic Forum, Asia, the most populous continent, has the most significant number of mobile phone users globally. In fact, around two-thirds of people use mobile services, and there is still room for further expansion, to which Singh agrees. The fastest growth rates, as most experts would agree, are in South and Southeast Asian countries.
What is more interesting is that the usage of digital financial services in the region is witnessing strong growth — a trend mostly driven by digital payments and digital lending adoption, according to the eConomy Southeast Asia Report 2021. The annual report, produced by Google, Temasek and Bain & Company, shows that while all digital financial services are flourishing in Southeast Asia, digital payments and digital lending, in particular, have been leading the change, driven by strong usage of digital services such as e-commerce, ride-hailing and food delivering, and infrastructure development.
“Even the Buy Now Pay Later (BNPL) market grew significantly during the Covid-19 pandemic, mainly driven by the boost in e-commerce and digital finance. To top it off, it promotes frictionless checkout experiences that are vital for any business, especially if you are focused on ecommerce growth,” Singh said, adding that customers, regardless of where they are, expects streamlined, customizable payment experiences—ones that give them the flexibility to choose how to make a purchase.
“Not only do BNPL payment methods offer this flexibility and convenience to your customers, they also reduce fraud and increase conversion and average order value,” she noted. Google, Temasek and Bain’s report reckons that digital lending, including BNPL, is expected to hit US$92 billion in transactions in 2025 in the region, up from US$23 billion in 2020.
Overall, Stripe’s mission remains the same, according to Singh, and that is to “increase the GDP of the internet”. Over the last decade, Stripe has expanded its platform beyond payments processing to handling more complex marketplace transactions through Stripe Connect, while also offering complimentary services to help facilitate online commerce, drive growth for customers, and expand the funnel of internet businesses globally.
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