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The proliferation of COVID-19 has factored into the growth of contactless payments (made through a mobile device, wearable, or physical or virtual card, with the payee’s device or a merchant’s terminal initiating the transaction) in Southeast Asia. Customers want a safe and convenient way to do face-to-face transactions. Regulations and other government interventions also are promoting a cashless society, although the use of cash is still popular in countries with smaller banked populations, specifically for micropayments for daily purchases.

Mobile phones, wearable devices, and mobile point-of-sale (POS) terminals provide the platform for a faster payment process. Open application programming interfaces (APIs) streamline the product development process, and emerging contactless payment technologies such as near-field communication (NFC), quick response (QR) code, magnetic secure transmission (MST), and virtual cards will encourage broader acceptance.

New payment innovations leveraging open banking APIs will pave the way for data sharing from multiple points, allowing providers to profile customers based on their behavior to improve the purchase experience. As countries in the region gear up to roll out 5G, which could improve payment processing time and improve the customer experience, partnerships, mergers, or acquisitions among terminal vendors, payment processors, issuers, and telcos may be necessary to advance contactless payment use.