Category Archives: FinTech

Laos’ Fintech Revolution is Still Bank-Led, For Now

In Lao PDR, digital financial services are at a very nascent stage of development, but recent partnerships are seeking to change that by introducing new and innovative fintech solutions.

Most of these initiatives are being spearheaded by banking incumbents and financial institutions as they prepare for the adoption of digital financial services.

In September 2022, Agriculture Promotion Bank (AP Bank), a development bank that primarily provides financing to the forestry and agriculture sectors, inked a partnership with Hi Sun Fintech Global Limited (HSG) to modernize its core banking system.

The project, which is set to take 9.5 months, will see HSG upgrade the bank’s anti-money laundering systems, reporting systems, and several of the bank’s other business systems. The upgrade will lay the necessary groundwork for AP Bank “to transition more seamlessly into a digital bank in future,” HSG said in a statement.

Prior to its collaboration with AP Bank, HSG had worked with other incumbents including Banque Pour Le Commerce Exterieur Lao Public (BCEL) and BIC Bank on similar projects, focusing on modernizing their core banking infrastructure to enable new business models, support advanced technologies and enhance customer experiences.

BCEL went live with HSG’s new banking system in April 2022. The new infrastructure aims to allow for fast product deployment as well as greater flexibility, adaptability, and scalability.

Fintech initiatives by the public sector

In the public sector, Bank of Lao PDR has been working on laying the foundation for digital payments, tying up with financial regulators from across the Asia-Pacific (APAC) region to upgrade its payment infrastructure, tap efficiency gains and access new capabilities.

In November 2022, a Memorandum of Understanding (MoU) was signed between the Lao PDR central bank and the National Bank of Cambodia (NBC) to facilitate cross-border transactions between the two jurisdictions.

As part of project, Cambodian bank Acleda Bank was commissioned for the development of new systems connecting Cambodia’s digital currency infrastructure Bakong to Lao DPR’s national payment network Lapnet.

Bakong counts about 40 banking and financial institutions as members, while Lapnet has about 30 members.

Separately, Bank of Lao PDR is also exploring the feasibility of a central bank digital currency (CBDC), enlisting Japanese fintech firm Soramitsu to conduct the study. Soramitsu was previously involved in the development of the Cambodian Bakong infrastructure.

These developments follow the launch of the Lao Payment and Settlement System (LaPASS) in June 2020, and the introduction of Lao QR Code earlier that year. These two developments were amongst the biggest milestones in the Lao PDR digital payment landscape at the time. LaPASS is a real-time gross settlement system designed for institutional use, while the Lao QR Code aims to set industry standards in QR payments in the country.

But perhaps most notably, a collaboration between Lao DPR and Malaysia was unveiled in early 2021 to develop the so-called Lao Digital Park, a new special economic zone, as well as the Fintech Valley in Vientiane. Initiatives under the partnership include setting up a fintech regulatory sandbox, developing digital government applications, as well as creating new fintech solutions.

An underdeveloped fintech startup scene

In Lao PDR, the overall fintech startup ecosystem remain in the very early stages of development, with deposit services dominating and a few mobile add-on services facilitating card payments.

A 2019 report by Asian think tank, the Asian Development Bank Institute, named inadequate access to the Internet and low financial literacy as the main barriers to fintech development. Other challenges identified by industry observers include the lack of resources, skill gaps and a lagging regulatory framework.

Lao PDR’s fintech sector is falling behind those in neighboring countries including Vietnam and Cambodia, despite providing fertile ground for fintech adoption. Bank account ownership in Lao PDR is low at 26.8%. Additionally, cash remains the dominant means of payment with only 0.6% of those aged 15 and older having a credit card and 12.7%, a debit card.

How Gen-Zs Are Redefining Payments

Southeast Asia’s payment ecosystem is undergoing a profound transformation, fueled by rapid adoption of digital payments, modernization initiatives by governments and a burgeoning consumer base of mobile-first young adults with new habits and expectations, a new blog post by payment company Currencycloud and Australian super-app Bano says.

The region’s millennials and Generation Z demographics, which refer to those born between 1980 and 2012, are reshaping the payment landscape, forcing industry players to adjust to this audience’s expectations of speed, personalization, contextuality and transparency, the post says.

These generations are digital-first; at ease with new technologies; and are avid users of super-apps, the report notes.

They are also keen to trying out new digital solutions, having shown strong interest in alternative payment methods including buy now, pay later (BNPL), cryptocurrencies and QR code payments, it says. But perhaps more importantly, millennials and Gen Z consumers want payments to be more instant, frictionless and embedded within their customer journeys.

Industry stakeholders must pay attention to these changing needs, the report says, especially considering that millennials and Gen Zs are fast-growing demographics which are expected to make up half of Asia-Pacific (APAC)’s population by 2025.

The rise of BNPL

Demand for embedded payments among Southeast Asian millennials and Gen Zs is reflected by the traction buy now, pay later (BNPL) arrangements have received among these demographics in the region.

According to market researcher PayNXT360, APAC’s BNPL payment industry has recorded strong growth over the past year, owing to increased e-commerce penetration caused by the COVID-19 pandemic outbreak. In 2022, it estimates BNPL payments reached US$201.9 billion in APAC, growing by 45.3% that year.

This growth is showing no signs of slowing down with BNPL payment adoption set to increase by 25.3% annually between 2022 and 2028. By 2028, the firm expects BNPL gross merchandise value in APAC to reach US$782.9 billion, compared to just  US$139 billion in 2021.

BNPL arrangements have increased in popularity over the past years. These microloans, which are offered right at the point of sale, allow users to split a purchase into multiple equal payments to be paid back over time, typically with little to no interest.

According to PYMNTS’ Buy Now, Pay Later Tracker, Gen Z and millennial consumers are the top users of these services.

QR code payments

QR code payments are another payment method that has risen in popularity across Southeast Asia, a trend that’s emerging on the back of soaring mobile payment usage.

In the Philippines, leading mobile wallet GCash claimed 55 million registered users at the end of 2021, a figure that represented 70% of the adult population. And Grab, a leading super-app across Southeast Asia, says its ecosystem counts over 25 million monthly transacting users.

According to the Currencycloud/Bano post, QR code payments are especially popular among Singapore millennials and Gen Z consumers who enjoy the speed and convenience of this payment method.

This is evidenced by data compiled by Swiss technology provider Scantrust which show that APAC was the biggest adopter of QR code payments in 2019, with a penetration rate of 15%.

A closer look at Asian nations reveals that China topped the ranking with 70% of the population utilizing QR code payments on a regular basis. China is followed by India at 40%, Vietnam at 27%, Thailand at 23% and Singapore at 22%.

In Southeast Asia, usage of QR code payments is only expected to grow as governments across ASEAN are working on linking their payment systems. Malaysia, Indonesia and Thailand already have their QR code payment systems connected, while Singapore is linked to Thailand and is seeking to add more countries, including Indonesia.

Southeast Asian millennials and Gen Z consumers are also fond of reward programs, the Currencycloud/Bano post says. This observation is supported by findings of a 2022 study conducted by Adyen, an omnichannel payment processing company, which found that of the 1,000+ Singapore consumers polled, 65% said they would download a retailer’s app to receive better loyalty rewards.

Cryptocurrency is another alternative payment method that’s gaining ground, the Currencycloud/Bano post notes, a trend that’s risen on the back of booming adoption of digital asset. According to Chainalysis’ 2022 Global Crypto Adoption Index, Vietnamese and Filipino consumers were the biggest adopters of crypto last year, recording the highest usage of crypto-related tools, products and services, compared to other nations.

Philippines Is On The Cusp Of Something Very Big, According To CEO

Wei Zhou, the former CFO of Binance and current CEO of, believes that the Philippines is on the cusp of a major technological advancement., the leading mobile wallet and cryptocurrency exchange in the Philippines with over 16 million users, was acquired by Zhou earlier this year to focus on digital assets investments rather than fiat.

Zhou emphasizes the need for Filipinos to become more familiar with blockchain, crypto, NFT, and other digital assets through everyday use. At the recent Philippine Fintech Festival, Zhou emphasized the importance of crypto education to make it more accessible and understandable to the average Filipino. He believes that education is key to expanding financial inclusion in the Philippines, particularly for those who are underbanked or disadvantaged.

Zhou stated, “We plan to do more similar events with other schools and universities in the metro. We understand that through tapping educational institutions we can influence and encourage the youth to start their journey towards digital ownership and financial empowerment.”

He also said, “Everything in this play-to-earn scene and the like is just starting. We’re going to see more collaborative efforts both from the traditional and the crypto space, and we want to latch onto these concepts and become that platform that will help more people earn.” recently launched Coins Arcade, where users can earn tokens while playing both Web2 and Web3 games.

According to the Manila Bulletin, online gaming in the Philippines is expected to continue growing in the coming years due to the widespread availability of affordable mobile devices and improved internet infrastructure.

Axie Infinity, the popular blockchain-based game launched in 2018 which has had over 200,000 registered users and generated over $10 million in sales in 2021 alone. Partnerships with major companies like ConsenSys and Animoca Brands have helped to bring the game to a wider audience and increase adoption and recognition of play-to-earn games and NFTs in the Philippines.

As CEO of, Wei Zhou aims to make the Philippines a global leader in Web3, not just in ASEAN. He sees digital assets and blockchain technology as a way to financially empower Filipinos and believes that the country has the potential to become a technological leader.

Zhou compared the current state of the Philippines to China’s pre-boom period and stressed the potential for the country to become a hub for innovation. He encouraged Filipinos to embrace blockchain and digital assets as the future of finance and urged the government to create a supportive environment for these technologies to thrive.

How this fintech is leading the charge for financial inclusion across Southeast Asia

Access to financing has long been a point of contention for micro, small, and medium-sized enterprises (MSMEs), even before the pandemic. According to industry studies over half of MSMEs across ASEAN are unserved or underserved by traditional lenders.

In Malaysia, it is reported that some of the financing difficulties faced by small businesses include the higher collateral requests by traditional financial institutions (58.8%) and delays in loan approval or disbursement (23.5%).  Indonesia, on the other hand, faces similar challenges, as 51% are unbanked while 26% are underbanked.

It signifies a huge gap of financially underserved communities amongst small businesses, which if addressed, could potentially boost the GDP of a country’s local economy by up to over 30%. This is where fintech comes in, to close the gap on financial inclusion and make financial solutions accessible through the power of technology and data.

One such fintech company in Southeast Asia that’s leading the charge in financial inclusion is Boost, a regional full spectrum fintech arm of Axiata, that recently made headlines across the region, alongside its consortium partner, RHB, as one of the five winners of the digital bank license granted by Malaysia’s central bank.

Based on industry case studies of digital banks across the globe, Boost’s upcoming digital bank is considered as a frontrunner due to its distinct advantage as an incumbent fintech player with a comprehensive ecosystem and a proven capability to operate at scale, which meets the criteria of a successful digital bank.

Through its holistic fintech ecosystem spanning its all-in-one fintech app, merchant solutions, AI-based lending business, and cross-border payment platform, Boost has been financially empowering millions of users and merchants across Southeast Asia since 2017.

Boost is also the first fully digital financier in Southeast Asia to secure an investment-grade A1 rating from RAM Ratings, the leading credit rating agency in Malaysia, which underscores Boost’s capabilities and competencies in accelerating financial inclusion through robust alternative data scoring frameworks.

Its AI-based lending business already has an impressive track record of addressing these financial inclusion gaps by serving the underserved at scale with simplified access to digital financial solutions.

Since inception, Boost has disbursed close to US$451 million (RM2 billion) worth of loans to thousands of MSMEs across Malaysia and Indonesia, with nearly half having never received credit from other financial service providers before. Despite this, Boost maintained a low single-digit non-performing loan rate and has seen a high repeat rate on loans, which reaches over 90% in Malaysia.

Imagine Ahmad, for example, a local entrepreneur who runs a small mom-and-pop sundry shop in the rural areas of Melaka, Malaysia. Due to macroeconomic headwinds causing disruption in cashflow, he finds himself in need of immediate financing to keep the lights on.

Considering that the only options available in an average bank typically range from US$67,750 (RM300,000) up to millions, Ahmad discovered that traditional banks were not able to cater to his needs for micro loans. Even if Ahmad could afford the loan, he may be rejected due to lack of collateral and guarantors.

However, through digital micro-lending with Boost, Ahmad is able to have access to immediate financing through a simple 5-minute digital application journey supported by AI and machine learning tools, with fund disbursement within 48 hours upon approval.  

Additionally, when Ahmad needs to make orders from distributors to buy weekly stock for his inventory management system, Boost offers lending solutions through an API link for Ahmad to order stock using credit as an alternative to cash within that purchasing module. This is possible through Boost’s holistic fintech ecosystem and technology, where digital financial solutions are embedded within the existing transaction journey and purchasing cycle of businesses.

It is for these reasons that there was no surprise that Boost was a receiver of the digital bank license in Malaysia. All eyes are now on Boost in the coming months as merchants and users alike look forward to its much-anticipated digital bank, which is expected to further revolutionise and democratise access to financial services.

Indonesia Encouraging E-commerce and Digitalisation to Boost National Economy

Indonesia is keen to maintain domestic consumption and encourages national economic growth by boosting its digital economy. Household consumption is the primary driver of Indonesia’s economic growth. Therefore, the role of the trade sector in the economy is to keep consumption increasing and keep a trade balance surplus.

Consequently, the role of the Ministry of Trade is to stabilise prices, strengthen the domestic market and increase exports to ensure that the wheels of production continue. As part of its strategy, it organised a National Online Shopping Day (Harbolnas) to promote e-commerce usage and increase the trade of domestic products.

“We hope this programme can benefit e-commerce businesses, especially to increase micro and small businesses. I hope Harbolnas can continue to increase domestic consumption, especially domestically made products,” Minister of Trade Zulkifli Hasan Zulkifli stated.

Harbolnas’s implementation from 2018 to 2021 resulted in a significant increase in transaction volume. Harbolnas recorded transactions totalling IDR 18.1 trillion (US$ 1.16 billion) in 2021, a 56% increase over the previous year. Bima Laga, General Chair of the Indonesian E-Commerce Association (idEA), estimates that the total transaction value will reach IDR 20 trillion (US$ 1.28 billion) this year. Consumption of local products at the Harbolnas event is also increasing. Harbolnas 2021 achieved IDR 8.5 trillion (US$ 543.7 million)in local product consumption, a nearly 40% increase over the previous year.

The Indonesian government is accelerating digital transformation in the e-commerce sector since it has become a means for Southeast Asian MSMEs to survive the pandemic and digital financial services are emerging as critical enablers.

“Traders who have been onboarding are currently feeling the impact of digitalisation. More than 90% of online traders will continue to use digital technology in payment, marketing, and other trade support matters. One of the Ministry of Trade policies is to improve the quality of the e-commerce ecosystem as part of the structural transformation of trade,” said Deputy Minister of Trade Jerry on a separate occasion.

As a result, the Trade Ministry has developed some action plans to help realise this vision. The first step is to digitise people’s markets and empower small micro enterprises (UMK). Second, the establishment of e-commerce facilitators. Third, e-commerce regulations must be structured and strengthened – using the internet to promote MSME products via the Portal Indonesia website.

According to Jerry, Deputy Minister of Trade, the government must collaborate to determine development policy directions, increase growth, and create a conducive e-commerce ecosystem as a cross-sectoral activity.

The ministry also encourages collaboration of various parties to overcome several e-commerce issues regarding lack of regulations, coaching, cyber security issues, logistics, payments, and strengthening the competence of workers, businesses, and local products.

The government is making all the effort to boost more significant contributions from the digital economy sector. However, currently, e-commerce’s contribution to Indonesia’s overall economy is still relatively small. With a total GDP of IDR 980 trillion in 2021, Indonesia’s digital economy only contributed 5.7%.

Despite this, its expansion is rapid. The gross merchandise value (GMV) of Indonesia’s digital economy is expected to increase more than fivefold by 2030, reaching IDR 24 thousand trillion. As a result, the digital economy’s contribution to total GDP rises by 18%, or approximately IDR 4,531 trillion. As a result, Indonesia’s digital economy will have twice the GMV value of the rest of Southeast Asia.

Bank Indonesia noted that significant e-commerce growth reflected Indonesia’s digital economic growth from the trade side. During the first half of 2022, e-commerce transactions increased by 22.1% to IDR 227.8 trillion years on year, and volume increased by 39.9% to 1.74 million transactions.

E-commerce business-to-business (B2B) and business-to-consumer (B2C) market locations are expected to contribute the most value to Indonesia’s digital economy ecosystem in 2030, amounting to IDR 1,908 trillion, or 34%.

Furthermore, Indonesia’s internet users also improve the digital economy’s potential. Approximately 202.6 million Indonesians have internet access and can become e-commerce users. Moreover, the Covid-19 pandemic has created momentum to accelerate digital trade transformation in Indonesia.