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Welcome to The Payment Expert weekly podcast, brought to you by SBC Media. Each week we analyse the news driving the global payments industry forward; the innovation, the infrastructure, and everything that has to happen to make it all possible.
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They know people from that background and these people aren't technologically literate in that way. They don't even have mobile banking. They don't really use anything other than cash. And then you're trying to then get them to tokenization and you're talking to them about data. you Hello and welcome back to the payment expert podcast, your source for the latest news insights and analysis on the payments industry. I'm Lewis Tompsett, news editor at payment expert and with me today live from money 2020 Asia in Bangkok, our senior journalists at payment expert, Callum Williams and Kieran O'Connor. Guys, good to have you both on. suppose first things first, watch it like. on the ground in Bangkok, a busy Bangkok by the sounds of it with uh I think you guys are right next to a main road with trucks and lorries and what have you whizzing by. How's it been for you guys on the first day of the show? Yeah, quite possibly the busiest road in Bangkok we're in in this hotel. no, it's been it's been a really, really eventful first day uh at Money2020 Asia. So many discussions around that we're going to get into obviously today, but there's so many discussions around tokenisation, digital currencies, cross border payments, some of the friction points within the cross border payments. yeah, it's been an eventful first day. Yeah, been very busy, but it's always great to learn about new markets. The Asian market isn't something we touch on too much. It's more focused on the European and the US. So it's always good to learn more. Yeah, sure. mean, one of the big themes that I saw just from looking at the the outlay for the show, the the main themes of the show was uh from infrastructure to impact. Is that something you've really kind of seen be hammered home at the show where people are sort of moving from discussing how to put the right infrastructure in place and to actually, you know, having using that infrastructure in the right way to make an impact? Yeah, I think it's somewhat of a fair reflection, Lewis. think there's been obviously some of that infrastructure has led to discussions around blockchain technology and distributed ledger technology and how they can be interoperable with the traditional payment rails and payment and financial infrastructure. I we're seeing a lot of discussions around tokenization and how payments can be tokenized and how Obviously now we're seeing the emergence of tokenized deposits. That's been a real key talking point from one of the key talking points for me coming out of day one is that banks are really honing in on and finding real valuable use cases around tokenized deposits and they do not come with the adage headache. I should say when it pertains to stable coins, because stable coins come with their own unique regulations, whereas tokenized deposits, they leverage those tradition, the banks traditional infrastructure while also using the benefits of the instant 24 seven settlements that is afforded with DLT and blockchain technology. So yeah, I'd say that's one of the key talking points for me tokenization. Sure. uh Interesting. mean, I had this kind of further down the talking point list, but you've mentioned it now. So I'll change it around a little bit. Because I know that you guys, I think you're at a panel with, with Rachel Whelan from Deutsche Bank and she was talking about things around stablecoins in relation to, I suppose, payments fragmentation. And she pointed out that I think it was 13 of the 20 largest remittance corridors. They run through Asia. But there are beneficiaries in places like Taiwan that still show up in person to confirm that payments have arrived. her view was that stablecoins aren't necessarily the beyond end or answer to the fragmentation issue, but that regulatory collaboration is perhaps maybe what's needed to deliver the change to sort of shift that fragmentation when it comes to those cross border flows across Asian markets. Do you agree on that viewpoint? Yeah, remember attending that panel discussion with Rachel Whelan from Deutsche Bank made those comments. I do think Stablecoin is a very unique uh use case from market to market. know they create financial inclusion, particularly within some of the African countries we're and where it pertains to the Asian markets though at the moment. I think Singapore is probably the biggest adopter of crypto and digital asset friendly regulations at the moment. I the monetary author of Singapore has had representatives here. discussing some of the forward thinking and regulations regarding stable coins and digital assets. But yeah, I do tend to agree that most, a majority of Asian countries are probably not as far advanced with some of the stable coin regulations and some of the stable coin guidelines, which would then obviously turn into adoption quite as far as Singapore. So I do think there's the cross border issues. predominantly ones that have been held in a traditional guard, I would say. Yeah, it almost sounds like there needs to sort of be a collaboration when it comes to the regulations across the region and everyone getting on the same level field. Let's talk a bit about Thailand then, because obviously you're in Thailand. That's where the show's being held. I think there was a morning keynote session from a representative from Thailand's Ministry of Finance, uh arguing that, you know, the country is uniquely positioned as a financial hub. It's a strategic location. It's got advanced infrastructure. Obviously, PromptPay is its leading A2A payment scheme. has, I think, 92 million registered accounts in a country of only 70 million people. So it's spread across the bounds of Thailand itself. You guys being on the ground, you've been there a few days now. Have you? Witness the infrastructure on the ground. Have you been using QR code payments at any point when you're on the ground? Have you found the payment experience or did you just bring cash with you? Yeah, so I don't know about Callum, but myself, I've not used a QR code payment yet. I've seen the locals use it in the shops. I know I really should try and log in and try and use it. But from what I've heard from talking to people at Money20-20 today, I'm not the only uh visitor that hasn't dipped my toes into QR code world. shall we say. We've pretty much been using cash most of the time. A lot of the places also are cash only or they have quite a hefty minimum spend to be able to use your card. When it comes to getting the cash from the ATM there is also quite a high FX interest on it. So I know that's something that people have been talking about at the event. Especially when Bangkok is one of these places which attracts, I believe they use the term cross borderless people who travel a lot and go to different places. It's very well connected to the other South, South Eastern Asian countries. yeah. Yeah. Do you think that borderless people tag kind of ties into the position that's been sort of given to it by, you know, Thailand's Ministry of Finance that it is uniquely positioned to sort of lead when it comes to payments in Asia? Does it stand out against the other markets like India, Singapore, China, for example? Well, yeah, I think we're obviously speaking to a few people for some interviews that will be coming out on Payment Expert in coming weeks. The risk is that it's such a massive tourist destination, Thailand is, and even Bangkok as well, it's in and of itself. And there is people that I've been speaking to on the ground today that Thailand is a leader when it pertains to QR code payments, obviously within its area, that south eastern Asian area we're talking like Vietnam and Cambodia have kind of almost leaned on Thailand and learned from its expertise within the push for QR code payments. And what we're seeing now is obviously, I know me and Karen haven't really used the QR code payments and the e-wallets that are available here. in Thailand, but it can't the QR code payments are almost designed for tourists, kind of given that seamless payment experience. then obviously, Kieran mentioned the some of the effects rates and some of the charges that come with ATM transactions. It's it you kind of almost you be more beneficial to use QR code payments and and the mobile wallet. So, yeah, I think Thailand is obviously standing on its own. is leading position, should I say, with the promotion of QR code payments? Yeah, would just say as well, uh some of the shops you go in, they have like a sign at the front of the counter that shows you all the payment options that are available. And there's about like 30 on it. I mean, some of them I've never heard of before, but I believe that they're all sort of local paint methods in all these other Asian countries. And that's something to do with they really lean on. the localisation methods, they want people to come here and use the payment methods that they use at home rather than force them to use something else, which I know isn't the case for me and Callum coming from the UK, but I believe that tourists who come from different parts of Asia and sort of the neighbouring countries do feel like they can use the same payment methods that they use back home. And just to add on, sorry Lewis, and just to add on there as well, think there is, I think the merchants and the businesses around here, You just the street vendors as well. Like, you know, you can. There's people with their own street. What they call the carts for the food and stuff like that. They have food, their own food markets, the food markets, the food stores. They have their own uh point of sale POS QR code acceptance hardware solutions. And you can perform the QR code payments on. Now, I think that's obviously conversations I've had as well is the is the businesses have kind of almost had enough of the interchange fees relating to some of the card works. So this QR code adoption has been in play now for 10 years. And it's all about, I guess it's all about just financially incentivising both the consumer and the merchant when it pertains to the adoption of some of these digital payments. Yeah. I suppose the other angle too is, you know, financial inclusion, having those options. know Kieran, you mentioned all the different logos from different means of paying on shop windows. It's having the option for people to pay how they want. And I know financial inclusion is a big talking point that you found from the show. I think there was a uh panel or keynote. I'll let you explain it for me from um the Bank of Thailand, which was saying that the likes of local farmers, people in urban areas are more connected than ever. perhaps there's a gap between the options available and also the rate at which people in urban environments have adopted technologies such as, know, smartphones, et cetera, et cetera. What can you tell us about that? Yeah, so it's actually two panels that I heard. One of them was the first one of the first ones of the day. Basically, a representative from the Bank of Thailand was explaining how financial inclusion is sort of one of their main priorities at the minute. It's because a lot of the population here are still underbanked. So they're really trying to push into the sort of more rural areas, which there's a lot of agriculture industry here and try and get them sort of farmers in into this sort of traditional financial space. One of the ways that they're sort of doing that is by offering sort of digital IDs so they can take loans out and things like that. However, when I was passing another panel, I wasn't actually going to go in, but then I heard them talk about financial inclusion. I thought, I may as well just nip in and see what they've got to say. great timing. And they were actually talking about using tokenization uh to help with financial inclusion. And as I sat there, I heard some people behind me sort of questioning how it would work, pretty much saying that they know people from that background and these people aren't technologically uh literate in that way. They don't even have mobile banking. they don't really use anything other than cash and then you're trying to then get them to use tokenisation and you're talking to them about data and digital IDs they, let's just say, weren't convinced with the idea however the people on the panel made some good points and they said that the infrastructure is meant to be sort of invisible and you wouldn't all you would have to do is try to get the farmers and these people to see the benefits of using it And they sort of suggest that once they see the benefits, the adoption rates will increase tenfold. And it will sort of solve this huge problem that they've got at the minute. Sure. I mean, the thing that comes to the top of my mind is, um, not to profess any kind of expertise in, in Thailand's infrastructure, but comparing it to the UK where, know, you can go to rural areas and in quite a lot of the space. You can't even get a mobile signal, a connection. So I'm sure it's the same in places in Asia too. and particularly when there's not the technical literacy in place to sort of even use smartphones, et cetera, other things, you know, even a laptop, may just not be, you know, part of the culture there, particularly for farmers. That does raise the point, doesn't it? You can have all these highly technical solutions in place to bring that inclusion for people, but it may not translate if the people, a, aren't literate in that and also if they don't understand it either. Yeah. uh Sort of a common theme that I'm seeing and I might be wrong in saying this, but it sort of suggests that the more technologically advanced that we get in payments, the more issues we're running into. I know we talked about cross border before. and people were mentioning how do we sort of like standardise and unify cross-border payments to make it as um smooth as possible and I couldn't stop thinking that when it was just cash although yes you would have had to sort of exchange the cash and turn it from one to another but everyone was using cash it was quite simple and I feel like it's the same here I think the more technologically advanced that we're getting The solutions that people are coming up with are even more technical and they're talking about AI, tokenization, and we're trying to use these things to solve issues where the people involved, don't like, like you said, they don't even have mobile phones or laptops in some cases. Yeah, sure. You were speaking to someone today as well, weren't you, Kieran, about... I suppose the topic of inclusion, but was it for a sort of a different market in Asia you were having this discussion? Yes, this was uh I was talking to Maxim from Bir, I'll try and pronounce it right because at first I was saying Bir in my very Uyghur accent and I straight away asked him if I'm saying it right. So I believe the name actually means one in Turkish and pretty much what they're doing is in Azerbaijan They're trying to reduce the dependence on cash and sort of turn that country into a more digital ecosystem. However, they are running into some troubles pretty much because the population is quite a bit older. They don't really trust the technology. So one of the questions they asked at first was, is it the banks that they don't trust? You hear that a lot in the UK, I don't trust the banks. mean, you even hear it from the US, from Donald Trump. It's actually the technology that they don't trust. have, lot beer have launched their own payment terminals where people can get cash from and people are using them. However, they're using them to get the cash out and then they'll pay with the cash in the shops rather than use their mobile phone to pay for the stuff. So they've got a real sort of challenge on their hands to try and get people to sort of turn more digital. One way that they're doing that is they have sort of made this ecosystem. So they've even got like this e-commerce side to them now. So one sort of train of thought he was talking to me about was that if you can create a demand for digital payments, then people will have to use it and start to use it. so I thought that was quite an interesting train of thought idea. And then the other thing that he was talking to me about was education, which I'm sure it's something that we've all heard before when it comes to sort of the challenges. And you've just sort of got to educate the population and sort of build that trust. Yeah, definitely. It seems like a running theme uh across, across Asian markets overall, really. Before we close out guys, if there's one announcement or conversation from today that you think deserves a bit more attention or something that flew under the radar. I know we've mentioned a few things that may have fit that bill. Is there anything in particular you would pick out from your discussions? Well, in terms of announcements, mean, every release that we received today was about Staplecoins and there's expected this week as well. Yeah, I think I really enjoyed the keynote. on what the rest of Asia, I'd even go as far as to say the rest of the world can learn from Japan's approach to tokenized money. was Mai Kaneko, who's the senior manager of international business at the current DCP. And they're developing some really, really interesting use cases when it pertains to the synergy between tokenized deposits, CBDCs and stable coins. They brought in around 100 participants to test the capabilities of all. of these digital currencies within its shared ledger and they're in the process of producing an inclusive multi-bank network to test and settle some of these digital currencies. of the use cases right now that they're sorry not the use cases, but some of the testing that they're trying to do is combining AI and the blockchain to perform end-to-end payments including B2B payments. And they're finding some success with it in terms of reconciliation pertaining to payments being made within digital currencies. So it was just a kind of a fresh approach, I guess, hearing that from coming out of Japan. Because I think as we all quite know, Japan's quite technologically advanced when it pertains to other things. no, that was really interesting. And it's been recovered on day one of our live book from payment expert. Sure. So do you guys think that the claim, you know, Everyone seems to say that the future of finance is in Asia. A lot of the things the Asian market does are forward looking compared to other markets. Do you think from the things you've heard on the ground today that that, I suppose, argument holds? Are you seeing things that the Asian market is doing or has done that em perhaps other markets can look at and sort of take advice from or take inspiration from? I definitely think I might be converted. think the Asian market is probably leading, leading at a minute. think it's only been one day and I think I've already converted. So Gary Sien from Ant Digital Technologies sort of spoke about super apps and I know we spoke about super apps on the podcast before and he sort of, they'll sort of beyond super apps and he coined a term saying AI super apps. So the one way that they're now going to improve these super apps is by adding AI into it in pretty much every layer. So just these AI agents talking to you and it'll just make the payments for you. So I don't even know what the purpose of the app will be anymore if you can just talk to the AI agent. But it was sort of, I know you probably didn't mean it this way, but it sort of come off in a bit of a braggy, somewhat of a braggy tone where he's talking about how far ahead they are in China and with these super apps. And it definitely sort of became even more emphasized when I've spoke to people, like from the people from Azerbaijan who were still trying to convert people to use sort of mobile banking. And then you've got this sort of overmarket in Asia, which is so technologically advanced, the sort of bragging and coming to the shore saying we can do this and you're not even here yet sort of thing. Yeah, you could almost argue that they've laid maybe the groundwork for, know, to use agentic AI. in a way that other markets aren't able to yet because they don't have the infrastructure in place. They don't have a super out network like a WeChat in place. So very interesting stuff guys. And I look forward to hearing more from um your discussions throughout the week and all the keynotes and panels you have lined up over the next couple of days. But unfortunately, that's all we have time for today. So thank you both Kieran and Callum for joining us. And if you're not already subscribed, to the Payment Expert podcast, make sure to subscribe wherever you do get your podcasts with plenty more insights and analysis coming up over the weeks and months ahead. And for the latest news as it happens, head over to paymentexpert.com. We'll see you next time. you