Asia-Pacific’s Anti-Cash Migration Spreads To Corporates

Researchers forecast mobile payments to account for $1 trillion in transactions next year. And while that trend is universal, the Asia-Pacific region is a particular hotbed for mobile FinTech.

“Smartphone adoption has grown much more rapidly than general banking and card adoption in the Asia-Pacific region,” said ICD Asia-Pacific Associate Research Director of AP Connected Consumer Marketplaces Shiv Putcha last year when IDC released its mobile payments forecast. “Recent focus on financial inclusion policies in various countries has given a boost to connecting the unbanked.”

“This phenomenon, coupled with the innovation of semi-closed wallet schemes linked to bank accounts, has given a major boost to mobile payments in Asia-Pacific,” the executive continued, adding that China, India, Indonesia, Singapore, Hong Kong and Australia are top mobile payment markets.

Those drivers may support the rise in consumer mobile payments, but economic factors in the Asia-Pacific region have also opened doors for B2B mobile payments to gain traction, too.

MC Payment, a startup based in Singapore, is a FinTech startup in the region that is riding the B2B mobile payments wave.

The company offers both B2C and B2B solutions but has recently fixed its eye on the corporate payments space. Earlier this month, MC Payment said it raised $3.5 million from investors in Thailand, which will also help the company enter the Thai market.

Speaking with PYMNTS, MC Payment CEO Anthony Koh said he “definitely” sees a space for B2B payments in the mobile FinTech ecosystem.

“Whether in B2B or in B2C, removing the friction of payment is one of our primary missions and one of the conversations that keeps coming up,” he stated, adding that whether solutions emerge for eInvoicing, reconciliation, payroll or other B2B financial services, “the industry will keep moving towards mobile as it helps businesses be more efficient.”

The Asia-Pacific region has also witnessed a migration away from cash, but it’s not just happening among consumers.

“As the adoption of cashless transactions continues to rise in the region, so does the need for solutions to satisfy the B2B operation flow,” Koh explained.

Though MC Payment operates in Singapore and, soon, Thailand, other Asia-Pacific markets support Koh’s remarks.

The recent demonetization in India, for example, has pressured businesses of all sizes to move away from cash payments. Small companies used to paying salaries or their suppliers with cash, for instance, can no longer use the large-value notes they once could. Other FinTech companies, like Indian commercial card firm Happay, say the shift away from cash means SMEs are now seeking card and electronic payment solutions to manage their processes like payroll and expense management.

Of course, there are consistencies in B2B payments that may be considered universal.

“Businesses big or small would like to reduce operating costs, risks, human efforts when dealing with purchases and payments,” Koh said when asked about regional B2B payments trends, though the response can be applicable to any market.

The executive also pointed to the digitization of traditionally manual business processes as a trend sweeping Asia-Pacific and the globe.

“Things like digital invoicing, virtual cards and cloud-based finance and accounting will help the bottom line of smaller businesses by enabling them to process and receive payments quickly,” he stated. “These technologies mean tighter processes and increased efficiency.”

MC Payment’s response to these demands in the area is Xaavan, a product the company developed to support B2B payments processing with Level 3 data and is certified by Mastercard. The accounts receivable tool targets some of what Koh described as the deepest pain points in B2B payments today.

For B2B buyers, they include the human error of manual data entry, the risk of fraud and a transparent audit trail; for the vendors managing accounts receivable, those challenges include delayed payments or long payment cycles.

Sound familiar?

Indeed, these are issues facing companies of all sizes across all markets today. And while Asia-Pacific may be an epicenter for enterprise payments mobility — just as it has been for consumer mobile payments — MC Payment seems to be addressing problems that are quite universal in the B2B payments arena.

Along with plans to expand to Thailand, MC Payment told PYMNTS it will be looking to zero in on the SME client. Koh explained that the firm’s solutions are more targeted towards large, multinational firms. And while its services could be applicable to firms in any area, Koh said MC Payment will be focusing on Asia-Pacific expansion for now.

“We are building more solutions that can assist SMEs in their purchases and payments flow,” he stated. “With our payment infrastructure and networks build, along with our physical presence in the region, we are in a good position to tweak our solutions to satisfy different local needs.”