Reform is coming to China's US$27 trillion payments market belatedly. Very belatedly. U.S. credit-card giants have been trying to crack the market for years, to no avail. The market should have been open to them by 2006, per China's WTO commitments. But Beijing has hesitated to open its financial industry to foreign investment. It is finally signaling greater openness amidst the toughest business conditions China has faced in decades, perhaps since the beginning of economic reforms in 1978.

In mid-February, Mastercard announced it had received approval from the People's Bank of China (PBOC) to formally establish a bank-card clearing business in China. The green light for Mastercard comes three weeks after Beijing and Washington signed a phase-one trade deal to ease tensions in their strained economic relationship. American Express has also recently been granted approval to set up a bank-card clearing business in China. Both Mastercard and Amex are working with local Chinese partners in joint ventures. 

The Monetary Authority of Singapore (MAS) announced on 28 January of the enforcement of a new Payment Services Act, the first comprehensive legislation of its kind that regulates distinct activities in payment services ranging from digital payments to the trading of cryptocurrency such as Bitcoin and Ether.

The Payment Services Act comes at a well-coordinated time before the MAS awards a total of five digital bank licenses to a select few of its 21 reported applicants. While that may be the case, some have begun to speculate on the effects and ramifications the Act will have on fintechs that are hoping to or have already begun operations in Singapore.

Australian neobanks are tapping strong demand for digital banking services to swiftly build up their deposit bases. Among the virtual banks reporting expeditious deposit growth are Xinja, Up!, Judo, 86 400 and Volt Bank. Xinja's growth has been especially impressive: It reports amassing $115 million in deposits in just 20 days. That would put Xinja on track to reach its goal of $120 million in deposits for the year by the end of February.

Tencent is stepping up its fintech investments outside of China, where it and Alibaba's fintech arm Ant Financial effectively have a market duopoly. One approach for Tencent is direct expansion - the launch of WeChat Pay in international markets. That's a good idea in any country frequented by Chinese tourists or business travelers.

But direct expansion only goes so far, especially in developed economies. Tencent doesn't expect consumers in Europe or the United States will opt for WeChat Pay instead of Apple Pay, Google Pay, or apps created by local banks and fintechs. Instead, the Shenzhen-based company is taking strategic stakes in ascendant startups, including French mobile payment app Lydia and challenger bank Qonto. These investments will give Tencent a chance to grow its fintech business in Europe through local rising stars.

Singapore has never been as large a financial center as Hong Kong. In every major traditional area of finance, Hong Kong has an edge. That is not the case in fintech, where Singapore's Asean location is a boon. The world's preeminent tech giants and venture capitalists have all descended on Southeast Asia, where the underbanked are legion, regulators are keen to boost financial inclusion, and consumers are digitally adroit. Singapore is ideally positioned to take advantage of this opportunity. 

Japan is one of the few major economies in Asia with a strong preference for cash. About 80% of transactions in Japan are cash, compared to 40% in China and 11% in South Korea. 

The fintech arms of Chinese internet giants Alibaba and Tencent have fought each other to a standstill in their home market. Together, Ant Financial (through its e-wallet Alipay) and WeChat Pay each hold about 90% of China's US$25 trillion mobile payments market, each with roughly an equal share. The duopoly looks stable for now. 

Much like its anti-corruption campaign, China's crypto crackdown is relentless. Beijing views decentralized digital currency as a conduit for money laundering and capital flight. In contrast, Beijing sees crypto's underlying blockchain technology as useful. Blockchain can help China boost its tech prowess, improve supply-chain integrity and surmount bottlenecks across many industries, particularly financial services. 

Southeast Asian ride-hailing giants Grab and Gojek aim to reinvent themselves as digital banks amidst rising concern about profitability among cash-burning tech startups. Becoming a profitable digital bank is the only way either of the companies will have a crack at super-app status. Bundling ride hailing, food delivery, plus other odds and ends won't do the trick. China's WeChat - the world's first and only super app to date - cemented its dominance by introducing a handy e-wallet and later building out a more comprehensive suite of digital banking services.

In 2019, the Asian tiger economies cautiously welcomed virtual banks. The financial centers of Hong Kong and Singapore as well as the advanced manufacturing hubs of Taiwan and South Korea can all benefit from digital-first competition in their respective financial sectors, where incumbents dominate. That has led to some complacency.