The honeymoon period is over for Southeast Asia’s platform companies, even the venerable Sea Group. While boasting a strong ecosystem Sea is still consistently losing money in two of its three divisions. Being bullish on Sea means believing that the profitable gaming arm Garena can carry Shopee and Sea Money indefinitely. Investors appear to be having their doubts, especially as Garena’s growth has slowed recently. Sea’s share price has fallen 63% in the past six months and 43% over the past year and is now trading at about US$127.

Home to about 70 fintech startups, Nepal is a nascent market for digital finance. That said, the pace of adoption in the Himalayan nation of 30 million is picking up amid the Covid-19 pandemic and with about 55% of the population unbanked, there is a need for fintech solutions that can boost financial inclusion. In the past few months, there have been several key developments that could speed up the digitization of Nepal’s financial sector.

Amid a general digital finance boom in Indonesia, the nascent retail investing segment is growing fast. A proliferation of investment apps, usually with low minimum investments, is allowing a much greater proportion of the population to invest. Historically, the wealthy have dominated the country’s stock market. Indonesia’s newbie investors are not only interested in equities though; they are also increasingly keen on crypto. Many of Indonesia’ new retail investors are young people, with about 70% between the ages of 17 and 30, according to Indonesia’s central securities depository.

The performance of Australian neobanks so far has been a bit underwhelming. Of the best known four (not to be confused with the big four), only Judo Bank has been an unequivocal success. Xinja collapsed about a year after receiving its banking license; 86 400 threw in the towel when it received an offer from National Australia Bank (NAB) it could not refuse, and Volt is pivoting to banking as a service. Given that it is targeting a similar SME customer demographic to Judo, the ascendant Aussie fintech Zeller could be more successful than the digital lenders focusing on the retail market.

What goes up must come down, right? Usually, yes, but with fintech startups the "up" can sometimes go on for so long that one wonders if the "down" is inevitable. This holds especially true for the buy now, pay later (BNPL) segment, which is now ascendant in India. The scale of BNPL’s growth in the subcontinent is something to behold. Indian research firm Redseer predicts that the market will reach US$45 billion to US$50 billion by 2026, an exponential increase from US$3 billion to US$3.5 billion now.

In mid-2021, Revolut became the UK’s most valuable fintech with a valuation of US$33 billion. Though the company lost US$280 million in the 2020 fiscal year, it has continued to spend heavily on expansion efforts in a bid to build a “global financial super app.” Revolut has long had its eye on the Asia-Pacific region and recently moved to strengthen its position in both the India and Australia markets.

Banking has been critical to Revolut’s ascendancy in Europe. However, the company’s origins do not lie in deposit taking and lending. Indeed, Revolut began as a multi-currency travel card offering favorable exchange rates. In India, Revolut is returning to its roots with a focus on cross-border payments, as seen in the company’s recent strategic acquisition of Indian international money transfer firm Arvog Forex for an undisclosed sum. This deal – which follows Revolut’s Indian arm raising US$45.5 million from its UK parent – will allow Revolut to launch a cross-border remittances service for Indian customers in the second half of the year.

Long before the pandemic disrupted the world, Southeast Asia’s preeminent platform companies began integrating financial services into their apps for practical reasons. Their cash-burning core services, like e-commerce, ride hailing and food delivery, were failing to make money. Fintech was seen as the answer. Struggling airline AirAsia, now rebranded as Capital A, sees similar promise in digital financial services, but it still needs travel to recover for its digital services ecosystem to thrive.

With CBDC hype subsiding – at least in most advanced economies – Japan’s plans for a digital yen are coming into focus and unsurprisingly, Tokyo is in no rush to launch a digital fiat currency even if it sees some upside to the idea in the long term. Japan has no compelling policy reasons to quickly roll out a digital yen, regardless of what China is doing. And in fact, Beijing spent about six years getting the digital RMB ready and it remains in the pilot stage.

Indonesia will probably be the first country in Southeast Asia where the reality of digital banking lives up to the hype. The vast archipelago nation has everything online banks need to thrive: a huge market, amenable regulators, sufficient connectivity and eager deep-pocketed investors. Even the complex geography of the country, which is made up of 17,508 islands (6000 of which are inhabited), favors branchless banking.

For an aspiring super app, PayPal’s performance over the past six months has been underwhelming. There is nothing “super” about its 59% decline in its share price to about US$110.50 during that period, nor the revelation that it had removed 4.5 million fraudulent user accounts. Though they were just a fraction of the company’s 425 million overall accounts, they represented a significant potential fraud risk.