Japan’s affinity for cash has made it a relative laggard in adopting digital payments, especially compared to neighbors like Korea and China. Japan only broke the 30% milestone for cashless payments in 2021, partially due to the pandemic. In contrast, Korea was almost 94% cashless in 2020, while China was not far behind at 83%, according to the World Economic Forum.

A commentary in collaboration with Banking Circle.

Large banks have long dominated cross-border payments in Asia Pacific thanks to their control of traditional correspondent banking networks and until recently, the lack of viable competitors. Banks have been particularly dominant in B2B payments as the barrier to entry is higher than in the retail segment.

When Singapore announced the winners of four digital banking licenses in December 2020, one name stood out because most of us did not recognize it: Greenland Financial Holdings. To say the Shanghai-based real estate company Greenland was a “dark horse” candidate for a license would be an understatement. It was not even widely known that the company and its blockchain trade finance partner Linklogis had thrown their hats in the ring. Since winning the license, the two companies have named their digital bank “Green Link Digital Bank.”

Meta makes almost all of its revenue from advertising. The company has long known it needs a new engine of revenue growth, but it waited too long to introduce payments and explore fintech in general.

In Asia, where fintech growth has generally been much faster than in Meta’s home market of the United States, the company has faced market barriers in some cases and intense competition overall. At this point, it may be able to gain some payments market share in certain Asian countries with WhatsApp Pay, but it will be an uphill climb.

A commentary in collaboration with Banking Circle.

The advent of proxy-enabled national real-time payment (RTP) systems has become an integral part of Asia Pacific’s digital financial services market landscape in recent years, driven by central bankers’ determination to make financial flows faster, more efficient and more widely accessible. Southeast Asian countries have been among the most proactive in the development of such real-time payment systems, which have been rolled out domestically first and then gradually expanded into the cross-border space.

As the most cash-loving advanced economy in Asia, Japan has not historically been eager to digitize its financial services sector – with a few exceptions. One of those is Rakuten Bank, which launched in the twilight of Web 1.0 back in the year 2000. At 23 years of age, Rakuten Bank must be one of the oldest digital lenders in Asia, if not the oldest. Gradually, other online banks are entering the Japanese market to compete with Rakuten.

A commentary in collaboration with Banking Circle. 

Mobile wallets are increasingly a preferred payment method across Asia Pacific, from China to Southeast Asia to Australia. Though e-wallet use in the region was growing steadily prior to the pandemic, the abrupt shift to online and contactless commerce in early 2020 supercharged mobile wallet adoption. This has important implications for Southeast Asia – where many people remain unbanked or underbanked and credit cards have yet to gain a strong foothold outside of Singapore and Malaysia.

Japan’s largest bank is increasingly looking to digital finance in Southeast Asia as an avenue for growth, as its home market is mature, slow to digitally transform and constrained to some degree by an ageing population. In contrast, Southeast Asia’s largest countries still have ample low-hanging fruit, especially Indonesia, a key area of focus for MUFG.

One of our favorite ironies about digital banking in Asia Pacific is that incumbent banks have a growing role in the segment, from Hong Kong to Singapore to Taiwan to Australia. It wasn’t supposed to be this way – at least not to our knowledge. What ever happened to good old-fashioned scrappy startup-driven disruption? With that in mind, we turn our attention to two digital lenders that can technically be classified as startups, but are backed by Standard Chartered, a huge incumbent lender operating in 59 countries that earns most of its revenue in Asia.