Walk through a busy mall in Manila, Kuala Lumpur or Bangkok and you’ll notice something. People aren’t fumbling for cash or cards anymore.
They’re scanning QR codes, paying with wallets, or tapping through apps that have quietly become part of daily life.
This shift is happening faster than many outside of the Asia Pacific region could realise. APAC is expected to exceed 1.2 trillion non-cash transactions by 2027, and in the same year, Worldpay indicate that digital wallets are projected to capture nearly half of global e-commerce and POS transaction value.
It’s not hard to see why.
Consumers in this region are mobile-first, merchants are pragmatic, and regulators have been busy experimenting with their own domestic frameworks.
But the picture isn’t that straightforward. Beneath the surface is a patchwork of wallets, tokens, QR schemes and regulatory quirks that’s both exciting and messy.
During a recent webinar, leaders from Visa, Thales, Worldpay and Tonik gathered to unpack how tokenisation, Click to Pay, and also payment passkeys are reshaping the digital checkout experience.
What emerged was a candid look at a region that is setting the pace, even if not everyone is moving in the same direction.
Wallets Fill the Gaps Left by Banks
In much of Southeast Asia, wallets have become the default way to pay, not because banks were displaced, but because they left a gap.
Mila Bedrenets, Chief Growth Hacker at Tonik, painted a clear picture of the Philippines, where wallet penetration has already surpassed the banked adult population.
In the Philippines, GCash claims to have been used by over 94 million Filipinos. That easily outstrips not just banked population numbers, but even the total adult population in the country.
And Mila pointed out that there’s a reason for that.
“The main reason for that is imperfect banking solutions … it’s difficult to open an account,” she said.
In that country, opening a bank account remains cumbersome for many, and it seems like wallets have simply filled the void.
Cross-border QR payments are already beginning to stitch together what was once fragmented.
Lokesh Singh, Thales‘s Head of Digital Payments, even shared how he could and has been using his Singapore wallet seamlessly in neighbouring countries such as Malaysia and Thailand through linked QR systems.
He mentioned that regional projects like Singapore’s Nexus are set to take this further, creating cheaper, faster remittance corridors in economies where such flows are a lifeline.
But there’s another side to this story. Lokesh observed that many users are juggling half a dozen wallets, which can feel overwhelming.
That kind of wallet proliferation can’t last forever. Consolidation, he believes, is inevitable.
Tokenisation Moves to the Centre
A quiet shift is underway beneath these wallet layers. Tokenisation, once viewed mainly as a security feature, is fast becoming the backbone of digital payments in APAC.
Lokesh highlighted that Visa alone has issued more than 12.6 billion network tokens globally, up 44% in a year.
“This is just Visa’s network. If we add other networks in place, there are just billions and billions of tokens out there,” Lokesh pointed out.
Visa‘s Senior Director – Product Management, Asia Pacific, Hunny Huria, said the company wants all transactions tokenised by 2030.
The impact is already visible. Tokenised transactions enjoy higher approval rates and lower fraud, and they spare consumers the hassle of re-entering card details or dealing with expired credentials.
Lokesh described it simply as removing a layer of unnecessary friction that users have tolerated for years.
Click to Pay Finds Its Second Wind
Click to Pay is another piece of this puzzle. Built on EMV SRC standards, it aims to create a more standardised checkout experience.
The Head of Digital Payments at Thales explained that the first version stayed stuck in pilot mode, but the current issuer-led approach is giving banks a bigger role.
“This time around, there is a different model that has been pushed out … issuer-led,” notes Lokesh.
Visa has begun rolling this out across Singapore, Malaysia, Hong Kong, the Philippines and Vietnam, while Mastercard is focusing on Australia and Japan.
Cards will soon feature the Click to Pay mark in the same way they carry contactless indicators.
Duranta De, Director, Enterprise Product APAC at Worldpay, said the early results are promising. Approval rates are improving, and repeat transactions are on the rise. The sticking point is merchant adoption.
However, Duranta asked a rhetorical question to the panel:
“Merchants are already offering Apple Pay, Google Pay. So why would they need to shift?”
It’s not obvious why they should add another option. According to Duranta, education, as he suggested, is the missing ingredient.
Payment Passkeys Tackle the Friction Problem
Anyone who has waited for a one-time password (OITP) text message knows how fragile that step can be. In Asia, where SMS-based OTPs dominate (with 67% of Southeast Asians preferring OTPs), it’s often the moment when a transaction falls apart.
Payment Passkeys promise to fix that. Lokesh explained that by using device biometrics and securely binding the payment with the device, payment passkeys do away with OTP entirely while maintaining strong security.
Cisco reports that over 80% of smartphones are biometrics-enabled, especially at higher tiers, which means the foundation for passkeys and passwordless authentication is largely in place.
Hunny added that combining Click to Pay with payment passkeys is a way to finally close the gap between security and convenience.
What matters now isn’t showing off new technology, but making the payment experience smoother by tackling problems that have been overlooked for too long.
“[The] higher the security, [the] higher the friction … but as we continue to move to personalised devices, the friction is slowly getting away … the combination of Click to Pay plus Payment Passkey intends to resolve [this],” Hunny Huria mentioned.
The Roadblocks No One Can Ignore
For all the momentum, there are still some real obstacles standing in the way.
On the merchant side, the challenges start early. Hunny Huria, Senior Director of Product Management for Asia Pacific at Visa, pointed out that integration can be expensive, especially for smaller players.
Many merchants simply don’t have large tech teams to manage new payment technologies, so even if the tools are available, rolling them out isn’t always straightforward.
Duranta De of Worldpay added another layer to this. Smaller businesses often lack the resources to keep up with rapid changes.
Troubleshooting becomes complicated when multiple actors are involved, and without dedicated payments teams, issues can drag on longer than they should.
The picture is also isn’t that much simpler on the banking side.
Lokesh Singh from Thales observed that many issuers still see tokenisation and related innovations as compliance requirements rather than opportunities. A lack of understanding of the business benefits, coupled with heavy legacy technology stacks, slows down adoption and innovation.
And in some markets, the problem is more structural. Card penetration remains low in places like the Philippines, so platforms (especially e-wallets) have simply taken matters into their own hands.
Mila pointed to TikTok Shop and Lazada as examples of e-commerce platforms that have embedded their own wallets to bypass banks altogether. As she put it, the market leapfrogged cards, and momentum shifted to the platforms that moved first.
These issues don’t cancel out the region’s progress, but they do explain why adoption is uneven.
So, the technology is ready. The market appetite is there. But the ability to implement it effectively depends on how well each part of the ecosystem can keep up.
The race now is to see who can pull those pieces together the fastest.
Watch the webinar Redefining Payment Checkouts: The Road Ahead in APAC here.
Featured image: Edited by Fintech News Singapore based on an image by pressfoto via Freepik.
