South Korea is a global leader in digital commerce, boasting one of the highest internet penetration rates and mobile adoption rates in the world.
However, succeeding in this digitally advanced economy demands more than just offering international card acceptance — it requires local adaptation, especially when it comes to payments.
Unlike Western markets where Visa, Mastercard, and PayPal dominate, Korean consumers strongly prefer domestic payment options.
More than 70% of online transactions in South Korea are processed through local digital wallets such as NaverPay, KakaoPay, and SamsungPay.
Recognizing this need for localization, Tazapay now enables merchants to offer Korea’s most trusted local payment methods — making entry into the Korean market simpler, faster, and operationally efficient.
International merchants can now accept payments through:
Through a single integration with Tazapay, businesses can offer these payment methods without needing to establish a local entity, open domestic bank accounts, or sign separate acquiring contracts.
South Korean consumers expect — and often require — familiar domestic payment methods at checkout.
Failure to offer recognizable options results in:
Conversely, merchants who localize their checkout experience by offering domestic wallets and local cards see:
The message is clear: adapting to local payment preferences isn't just operationally smart — it's commercially critical.
Tazapay’s platform architecture is built to remove traditional barriers to global expansion.
Through Tazapay, merchants can:
This Collect-Hold-Pay capability — unified under one platform — allows merchants to manage incoming funds and outgoing disbursements without multiple vendor relationships, reconciliations, or compliance overhead.
Simpler Onboarding:
Checkout Localization:
Optimized FX Management:
Improved Cash Flow:
Reduced Compliance Risk:
Operational Simplicity:
By centralizing these capabilities, merchants save on setup costs, legal complexity, and operational drag — accelerating their ability to capture market share in Korea.
South Korea continues to be a high-growth, digitally sophisticated market.
Mobile payments, domestic digital wallets, and local payment rails are the standard — not the exception — for Korean consumers.
International merchants who localize their payment strategies now will be better positioned to:
With Tazapay’s latest launch, expanding into South Korea has never been simpler.
One platform. One contract. Full access to Korea’s preferred payment options — without local entity setup or operational complexity.
👉 Start collecting Korean local payments today with Tazapay.
In the rapidly evolving digital economy of East Asia, understanding local payment methods is crucial for businesses aiming to penetrate these markets. With a significant portion of consumers favoring digital wallets and alternative payment solutions over traditional card systems, adapting to these preferences is essential for both local and international enterprises. This comprehensive guide delves into the most preferred payment methods across key East Asian countries, highlighting their penetration rates, ease of use, and strategic advantages for businesses.
Alipay, launched by Alibaba Group in 2004, has grown into one of the world's largest mobile payment platforms. It offers a comprehensive suite of financial services, including payments, money transfers, and wealth management. As of 2025, Alipay boasts over 1.2 billion users globally, with a significant concentration in China. Users can effortlessly link their bank accounts or cards to the app, facilitating seamless QR code-based transactions both online and offline. For international businesses, integrating Alipay as a payment option opens access to a vast consumer base accustomed to this platform, enhancing transaction convenience and customer trust. Notably, American Express has partnered with Alipay, allowing global cardholders to link their cards to the Alipay digital wallet, simplifying transactions for travelers and providing local businesses with greater opportunities to attract international customers.
Embedded within the ubiquitous WeChat app, WeChat Pay has seamlessly integrated social media with financial transactions. With over 1.3 billion monthly active users, WeChat Pay facilitates peer-to-peer transfers, bill payments, and in-store purchases through QR codes (source). Its integration into daily communication platforms makes it indispensable in Chinese consumers' lives. International businesses targeting Chinese customers can leverage WeChat Pay to offer a familiar and efficient payment method, thereby enhancing user experience and potentially increasing conversion rates.
UnionPay, established in 2002, is China's largest card payment organization, with cards accepted in over 180 countries. While digital wallets dominate urban areas, UnionPay remains prevalent, especially among older demographics and in regions where mobile payments are less ubiquitous. For businesses, supporting UnionPay ensures accessibility to a broader audience, including those who prefer traditional card payments. Additionally, UnionPay's collaboration with various international payment networks facilitates smoother cross-border transactions.
Introduced in 2018, PayPay has rapidly become one of Japan's leading mobile payment apps, boasting over 50 million users. It offers QR code-based payments, promotions, and a user-friendly interface, encouraging cash-reliant consumers to adopt digital payments. For international businesses, integrating PayPay can attract Japanese customers who prefer this method, especially in e-commerce and retail sectors. Its growing acceptance across various merchants signifies a shift towards cashless transactions in Japan.
Rakuten Pay, part of the Rakuten ecosystem, allows users to make payments using linked credit cards or Rakuten points. Its integration with Rakuten's e-commerce platform provides a seamless shopping experience. International businesses partnering with Rakuten Pay can tap into a loyal customer base familiar with Rakuten's services, enhancing brand visibility and trust. The platform's reward system, offering Rakuten points for transactions, incentivizes repeat purchases.
Originally designed for public transport payments, IC cards like Suica and PASMO are now widely accepted at convenience stores, restaurants, and vending machines across Japan. Merchants benefit from their simplicity—transactions are instant, reducing checkout times significantly. Retailers near transit hubs can capitalize on the popularity of IC cards by offering exclusive discounts or promotions for card users. Suica cards are also compatible with Apple Pay, enhancing their appeal among international tourists.
KakaoPay, launched by Kakao Corporation, integrates seamlessly with KakaoTalk, South Korea's dominant messaging app. It offers services like money transfers, bill payments, and online purchases. With over 36 million users, KakaoPay's convenience and integration into daily communication make it a preferred payment method. International businesses can benefit by incorporating KakaoPay, appealing to tech-savvy consumers who value efficiency and integration. Its rapid adoption reflects South Korea's shift towards a cashless society.
Naver Pay, associated with Naver, South Korea's leading search engine, provides users with a simple payment solution for online shopping and services. By linking bank accounts or cards, users can make swift payments without repeatedly entering payment information. For businesses, integrating Naver Pay can enhance the checkout experience for customers, potentially reducing cart abandonment rates. Its association with Naver's extensive ecosystem offers additional marketing opportunities.
Toss started as a peer-to-peer money transfer service and has expanded into a comprehensive financial platform, including payments, investments, and insurance. With over 20 million users, Toss's user-centric design and broad service offerings make it a significant player in South Korea's fintech scene. Businesses can leverage Toss to offer diverse financial services, catering to consumers seeking integrated financial solutions.
Samsung Pay stands out with its compatibility with both NFC-enabled terminals and traditional magnetic stripe readers via MST technology. This versatility makes it a favorite among South Korean consumers and tourists alike. Merchants benefit from its broad acceptance and secure transaction protocols that minimize chargebacks. Retailers adopting Samsung Pay can cater to a diverse customer base without upgrading their POS systems extensively. Its widespread acceptance makes it an essential payment method for businesses serving South Korean consumers.
Initially launched as a transit card, Octopus has become a widely accepted payment method across Hong Kong, from retail stores to restaurants. Users can top up their cards via cash or digital means, making it an easy-to-use solution for both locals and tourists. Businesses accepting Octopus tap into a vast consumer base familiar with contactless payments.
A localized version of Alipay, AlipayHK serves Hong Kong residents with seamless mobile payments. With over 3 million users, it is commonly used for peer-to-peer transfers, bill payments, and online shopping. Businesses integrating AlipayHK can attract local customers accustomed to digital payments.
WeChat Pay HK offers similar functionality to WeChat Pay in mainland China, with support for local transactions in Hong Kong dollars. It allows businesses to cater to both Hong Kong residents and visiting mainland Chinese consumers who rely on WeChat Pay for everyday transactions.
JKoPay is Taiwan’s leading QR-code-based wallet, with strong adoption in retail and small businesses. JKoPay enables small businesses to go cashless by providing an easy-to-use platform for accepting digital payments. Its growing user base makes it a valuable payment option for businesses expanding into Taiwan.
Line Pay is Taiwan’s most used mobile wallet, embedded in the Line messaging app. With seamless integration into e-commerce platforms, businesses can drive higher conversion rates and customer retention.
Taiwan Pay, backed by the government, promotes financial inclusion and cashless transactions. Businesses accepting Taiwan Pay can cater to a broader audience, including the growing digital-native population.
For merchants eyeing East Asia's lucrative markets, adopting local payment methods is no longer optional—it’s essential for success in this diverse region where consumer preferences vary widely by country but consistently favor convenience and familiarity over global alternatives like credit cards.
By integrating these local payment solutions into their operations, businesses can not only enhance customer satisfaction but also unlock new revenue streams in one of the world’s most dynamic consumer markets!
Local payment methods and e-wallets dominate Southeast Asia’s digital economy, far outpacing credit card adoption. Consumers across the region rely on QR payments, bank transfers, and mobile wallets for everyday transactions due to their convenience, security, and accessibility. For businesses, accepting these preferred payment options is crucial for expanding reach and driving growth. This guide breaks down the most widely used local payment methods in Singapore, Thailand, Indonesia, Malaysia, Vietnam, and the Philippines, offering insights into how they shape the region’s fast-evolving payment landscape.
1. PayNow
PayNow is Singapore’s real-time bank transfer system that allows users to send money instantly using mobile numbers or UENs (Unique Entity Numbers). Widely adopted for both personal and business transactions, it has become a cornerstone of Singapore's cashless society. Users appreciate its simplicity—by linking their bank accounts to their mobile numbers and scanning an SGQR (a unified QR code) completes transactions instantly without additional fees. For international businesses, integrating PayNow can streamline transactions with Singaporean consumers and partners, facilitating smoother financial operations.
2. GrabPay
Integrated within the Grab super-app, GrabPay offers services ranging from ride-hailing to food delivery and in-store purchases. Its widespread acceptance and user-friendly interface have made it a popular choice among Singaporeans. Users can easily top up their GrabPay wallets and make payments by scanning QR codes, ensuring swift transactions. International businesses can tap into GrabPay's extensive user base by offering it as a payment option, thereby enhancing customer reach and satisfaction.
3.DBS PayLah!
DBS PayLah! is a mobile wallet service by DBS Bank, one of Singapore's leading financial institutions. It enables users to perform a variety of transactions, from bill payments to peer-to-peer transfers. The app's integration with Singapore's national QR code standard (SGQR) ensures compatibility with numerous merchants, enhancing its utility. For businesses, integrating DBS PayLah! can provide access to a broad customer base, particularly those who prefer using bank-affiliated payment solutions.
4. FavePay
FavePay is a mobile payment app that rewards users with instant cashback at participating merchants. Popular among deal-seekers in Singapore, it enhances the shopping experience with its rewards program. Users can make payments by scanning QR codes and enjoy immediate discounts, fostering customer loyalty. Businesses can benefit from increased patronage by partnering with FavePay and participating in its promotional campaigns.
1. PromptPay
PromptPay is Thailand's government-backed real-time payment system that links mobile numbers or national ID numbers to bank accounts, facilitating instant transfers. Widely used for both personal and business transactions, it supports e-commerce payments and utility bill settlements. Its interoperability with Singapore’s PayNow for cross-border transfers enhances its utility for international transactions. For businesses, integrating PromptPay can simplify payment processes and help reduce transaction costs.
2. ShopeePay
Integrated with Southeast Asia’s top e-commerce platform, ShopeePay enables QR payments for online and offline shopping. Recently, it became a payment option for Apple services in Thailand, enhancing its utility beyond e-commerce. ShopeePay’s widespread acceptance at partner merchants makes it a preferred choice for consumers and businesses seeking convenience.
3. WeChat Pay
WeChat Pay is popular among Chinese tourists in Thailand but has also gained traction among local users due to its seamless QR-based payment system at major retailers and restaurants. It facilitates cross-border payments in multiple currencies, making it ideal for international travelers. Businesses catering to tourists can benefit from accepting WeChat Pay, enhancing the payment experience for foreign customers.
4. TrueMoney Wallet
With 16.8% market share, TrueMoney offers low fees (acceptance fee of only 1% of the transaction value, compared to costlier cards transaction fees) and supports utility bills, gaming, and cross-border remittances to Cambodia and Myanmar. Its versatility makes it a staple for both personal and business transactions. For businesses, integrating TrueMoney Wallet can attract cost-conscious consumers seeking affordable payment options other than cards.
5. Rabbit LINE Pay
A collaboration between Rabbit, the BTS Skytrain's payment system, and LINE, a popular messaging app, Rabbit LINE Pay offers a seamless payment experience. Users can pay for public transportation, shop online, and make in-store purchases using the service. The integration with LINE's platform allows for peer-to-peer transfers and bill splitting among friends. Its rewards program incentivizes usage through points and cashback offers. The service's user-friendly interface and widespread merchant acceptance have contributed to its rapid growth.
1. QRIS (Quick Response Indonesian Standard)
QRIS is Indonesia’s unified QR code system that integrates multiple banks and e-wallets under one standard. It simplifies cashless transactions for consumers by allowing them to use their preferred wallet or banking app at any QRIS-enabled merchant. For businesses, QRIS reduces operational complexity by eliminating the need for multiple QR codes. Merchants benefit from its interoperability across 22.4 million merchants nationwide, while consumers enjoy seamless payments for everything from groceries to transportation.
2. OVO
OVO is a versatile e-wallet widely used for ride-hailing services (Grab), bill payments, and retail transactions. Its cashback rewards program attracts younger demographics, while merchants benefit from its extensive integration across platforms.
3. DOKU
Doku Wallet is a pioneer in Indonesia’s digital payments space, offering virtual accounts for online transactions. It caters to both consumers and merchants by providing flexible payment options like ATM transfers and mobile banking, making it ideal for e-commerce businesses targeting customers who prefer traditional banking methods.
4. LinkAja
LinkAja focuses on essential services like transportation tolls, utilities, and retail shopping while aligning with the national QRIS standard for interoperability. Businesses targeting middle-income consumers find LinkAja particularly useful due to its government backing.
5. Dana
Dana is a secure e-wallet offering features like bill payments, fund transfers, and QR code scanning for transactions. Its user-friendly interface makes it popular among consumers seeking convenience in day-to-day payments.
6. GoPay
Originating from Gojek, Indonesia's multi-service platform, GoPay has become one of the country's leading digital wallets. Users can pay for services like transportation, food delivery, and online shopping. The wallet's integration with Gojek's ecosystem offers users a seamless payment experience. GoPay's peer-to-peer transfer feature allows users to send money to friends and family effortlessly. Its partnership with various financial institutions has expanded its services to include insurance and investment products.
1. FPX (Financial Process Exchange)
FPX is Malaysia's national real-time retail payments platform, facilitating secure online bank transfers. It's widely used for high-value transactions and is favored by both consumers and businesses due to its reliability and low fees. FPX's integration with major e-commerce platforms and its oversight by Bank Negara Malaysia make it a trusted payment method for online purchases, bill payments, and fund transfers.
2. Touch 'n Go eWallet:
Initially developed for toll payments on Malaysia's highways, Touch 'n Go eWallet has evolved into a versatile digital payment solution that caters to a wide range of consumer needs. It now supports retail shopping, bill payments, and even cross-border QR transactions in Singapore. The platform integrates seamlessly with merchants, allowing businesses to accept payments via QR codes and streamline checkout processes. Consumers benefit from its user-friendly interface, cashback rewards, and promotions, which incentivize frequent usage. Its ability to handle both online and offline transactions makes it ideal for everyday expenses, from groceries to entertainment.
3. Boost:
Boost is a gamified digital payment platform that has rapidly gained popularity among younger Malaysians. It offers cashback rewards, digital vouchers, and exclusive promotions for transactions across various sectors such as retail shopping, bill payments, and food delivery. Boost’s unique “Shake” feature adds an element of fun by allowing users to earn instant rewards after every transaction. The platform is particularly appealing to small businesses and micro-entrepreneurs due to its low-cost setup and ability to attract tech-savvy customers.
4. MAE by Maybank:
MAE (Maybank Anytime Everyone) is an innovative lifestyle app offered by Maybank that combines traditional banking services with modern financial tools. Beyond its function as a digital wallet for payments and transfers, MAE includes features like budgeting tools, savings goals, expense tracking, and even a virtual debit card for online shopping. These features make MAE particularly appealing to consumers who want greater control over their finances while enjoying the convenience of cashless payments. For businesses, MAE provides seamless integration with Maybank’s merchant services, enabling them to accept payments from one of Malaysia’s largest banking customer bases.
1. Momo Wallet
Momo leads Vietnam's e-wallet market with over 31 million users. It offers a comprehensive suite of services including bill payments, money transfers, and even investment options. Momo's popularity stems from its user-friendly interface and extensive merchant network. For businesses, integrating with Momo provides access to a large, engaged user base and can significantly boost sales, especially in sectors like food delivery and e-commerce.
2. VNPT EPAY
VNPT EPAY, backed by Vietnam's telecom giant VNPT Group, operates an extensive network of over 2,100 transaction points nationwide. It specializes in utility bill payments, mobile top-ups, and retail transactions. VNPT EPAY's wide reach makes it particularly valuable for businesses targeting consumers in both urban and rural areas. The platform's integration with various service providers simplifies bill payments for millions of Vietnamese households.
3. ZaloPay
ZaloPay leverages its integration with Zalo, Vietnam's most popular messaging app, to provide seamless payment services. Users can easily send money, pay bills, and make purchases without leaving the Zalo ecosystem. This integration makes ZaloPay particularly attractive for social commerce and peer-to-peer transactions. Businesses can benefit from ZaloPay's social features to enhance customer engagement and drive sales.
1. QR Ph
QR Ph is the Philippines' national QR code standard, designed to promote interoperability among various payment service providers. It allows users to make payments using any participating e-wallet or banking app by scanning a single QR code. For businesses, adopting QR Ph simplifies payment acceptance and reduces the need for multiple QR codes at the point of sale. This standardization is expected to accelerate the adoption of cashless payments across the country.
2.GrabPay
GrabPay has become integral to the Philippines' digital payment landscape, offering a seamless experience for Grab's ride-hailing and food delivery services. It has expanded to include bill payments, online shopping, and even investments. GrabPay's loyalty program, which offers points for every transaction, has been a key driver of user adoption. For merchants, GrabPay provides access to Grab's large user base and detailed analytics to help optimize their businesses.
3.ShopeePay
ShopeePay has leveraged Shopee's e-commerce dominance to become a major player in the Philippines' digital payment space. It offers cashback rewards, discounts, and seamless checkout experiences on the Shopee platform. ShopeePay has also expanded to offline merchants, particularly in partnership with convenience stores like 7-Eleven. This omnichannel approach makes ShopeePay an attractive option for businesses looking to reach customers both online and offline.
4.Maya (formerly PayMaya)
Maya has evolved from a simple e-wallet into a comprehensive financial services platform. It offers features like a savings account, cryptocurrency trading, and micro-investments alongside traditional payment services. Maya's all-in-one approach appeals to tech-savvy Filipinos looking for a unified financial solution. For businesses, Maya provides robust payment APIs and plugins for easy integration into various e-commerce platforms.
Southeast Asia's diverse and rapidly evolving payment landscape presents both opportunities and challenges for businesses. Understanding and integrating local payment methods is crucial for success. As this guide has highlighted, each country boasts a unique blend of digital wallets, real-time payment systems, and traditional methods, all shaping consumer preferences and business operations.
By partnering with Tazapay, businesses gain a significant advantage in navigating this complex landscape. Tazapay's localized payment rails enable you to offer popular methods like PayNow, FPX, and QRIS without needing local entities, streamlining cross-border transactions and reducing operational overhead. With multi-currency support, high conversion rates, and advanced fraud management, Tazapay empowers businesses to tap into Southeast Asia's growing digital economy with confidence.
Thailand is embracing the dawn of digital payments after being cash-dependent for decades. In the last six years, the nation has made significant strides in rolling out financial technology, increasing the penetration of such services among its populace¹. According to 2022 statistics, approximately 77.8% of Thailand's population of 70.01 million are active internet users, showcasing a high degree of digital literacy².
A key driver in Thailand's digital transformation has been PromptPay, an interbank real-time payment system, developed as part of the National e-Payment Master Plan¹. PromptPay is not only a popular local payment method but is increasingly integrated into international payment gateways, facilitating cross-border transactions.
PromptPay is a cornerstone of Thailand's payment systems, operating as an interbank real-time, near-instant payment gateway that simplifies the way users receive and transfer funds. It links payments to a Citizen ID or mobile phone number, and is similar in functionality to India’s UPI and Singapore’s PayNow3.
Developed in cooperation with major Thai banks and Vocalink, a Mastercard company, PromptPay is instrumental in supporting the Thai government’s initiative to transition from a cash-reliant economy to a robust digital economy4.
Thailand led all countries in real-time payment transactions per capita in 2022, with the payment method accounting for 34% of all transactions5. The significant uptake of PromptPay is attributed to the widespread availability of mobile phones, which have been a major driver of digital adoption and PromptPay transactions. Since its implementation in 2017 to 2023, PromptPay transactions have surged annually from 88.07 million to over 19.9 billion, underscoring its central role in Thailand's digital economy and cross-border transactions6.
Despite these encouraging numbers, the real sentiment towards digital payments in Thailand remains complex. During the pandemic, digital payment methods saw a surge in use, but in 2022, a survey by the Bank of Thailand indicates a revert to cash for many7. Citing convenience and the absence of added fees, over 50% of respondents across all age groups expressed a preference for cash, with only 27% of the surveyed continuing with digital payment apps post-pandemic8.
As read in the previous section, Promptpay might not be the ultimate solution for digital payments. Nonetheless, it continues to grow in popularity as a local payment method in Thailand and as part of international payment gateways. Why is this so? We now explore its key advantages and limitations:
PromptPay is primarily a local payment system in Thailand, but the Thai government is expanding its reach internationally, with agreements already in place with Malaysia and Singapore. For cross-border transactions, PromptPay requires the use of a third-party payment provider, which serves as the international payment gateway.
1. Users first transfer funds to the payment provider's Thai bank account via PromptPay. This can be done by either scanning a QR code or entering the recipient's Citizen ID or phone number within the PromptPay app.
2. After the transaction, the PromptPay app confirms the successful transfer of funds with a notification.
3. The funds are then transferred to one of the payment provider’s international accounts. Finally, these funds are disbursed to the foreign seller's bank account.
When selecting a third-party payment provider for international transactions involving PromptPay, it’s crucial to choose one that offers a robust network of localised markets. This ensures that the service aligns with the specific needs and regulations of the target markets, enhancing the efficiency of cross-border payments.
As of 2024, PromptPay’s fee structure of local transactions within Thailand are as follows:
This fee model makes PromptPay an attractive option for everyday payments and small business transactions within the country.
When it comes to cross-border payments facilitated through a third-party payment provider, standard charges apply. These include FX costs, platform fees, and setup fees, which vary depending on the provider chosen. For more information, read our blog article on The Actual Costs in Using a Payment Gateway.
Selecting a reputable and secure international payment gateway is thus crucial to manage these costs effectively and ensure transaction security.
Understanding the nuances of PromptPay and its fee structure arms you with the knowledge to more effectively penetrate the Thai market. If you're exploring further solutions to enhance your business operations, consider Tazapay. Offering specialised payment solutions for a wide range of needs—from eCommerce platforms to exporters and importers—Tazapay tailors services to help your business thrive in international markets.
Contact us to find out more
Sources
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As the eCommerce market expands, so does the array of payment gateways available to merchants worldwide. Many are tempted by platforms advertising free or low-cost services, thinking they've secured a great deal. However, the reality of hidden costs of payment gateways often emerges only after transactions begin, potentially eroding profit margins.
Are you grappling with the complexities of global transactions? Consider Tazapay, your global payment gateway partner. With a network extending across 173 countries and a suite of fully digitised solutions for marketplaces and platforms, Tazapay helps you make the world your market.
To better understand this landscape, let’s explore the common costs and fees associated with payment gateways, particularly those involved in cross-border payments.
Platform fees are relatively straightforward—they represent the costs of using a payment platform. Most reputable payment gateways impose some type of fee. These fees can vary, typically appearing as a combination of a flat fee plus a percentage of the transaction, or as a simple percentage-based fee.
For example, some payment gateways may charge fees such as $0.30 plus 2.9% per transaction, or $0.11 plus 3.95%, depending on the payment method. In contrast, Tazapay offers a more streamlined approach, charging either 1.8% or 3% for non-card transactions. To illustrate the differences in cost structures, consider the expense of a $50 transaction versus a $1000 transaction:
Using a $0.30 + 2.9% fee structure, a $50 transaction incurs a cost of $1.75, while a $1000 transaction costs $29.50.
However with Tazapay’s fee, starting from 0.8%, the same transactions would cost just $0.40 and $8, respectively.
Comparing these fee structures highlights significant differences. Opting for a straightforward percentage fee, such as Tazapay’s, can be more cost-effective, particularly for larger transactions where flat fees add up. This comparison underscores the importance of understanding payment gateway fees and how they impact your costs, especially in a cross-border payment gateway context.
Understanding payment gateway costs is essential when considering the financial implications of various payment methods. These platforms may absorb fees, integrating them into overall platform fees, or pass them directly to consumers.
Bank transaction fees play a significant role in the costs associated with direct bank payment methods like local bank transfers and bank redirects. Typically, local bank transfers might incur a surcharge for cross-bank transactions, while in-bank transfers often avoid these fees. Bank redirects, similar in operation to local bank transfers, usually carry minimal processing fees, influenced by national e-commerce policies.
For example, Singapore's PayNow service was free of transaction fees from its launch in July 2017 until January 2021, under a full subsidy. However, a nominal fee of SGD0.22 was introduced in 2022 to cover gateway pricing models adjustments.1
Credit card processing fees are another critical aspect of payment gateway costs. Merchants may apply a surcharge for transactions using card networks like Mastercard or Visa. For instance, as of 2024, credit card processing fees for merchants range from 1.3% to 3.5%, depending on the card and transaction type.2
The cost of wire transfers, particularly for international payments, is a notable part of gateway costs. Domestic wire transfers generally incur lower fees and are processed faster compared to international transfers, highlighting the variability of bank surcharges across different institutions.3
When transactions span multiple geographic regions involving different currencies, international transaction fees and currency exchange costs, or FX costs, are inevitable. Payment gateways often manage these costs by adding a percentage-based fee over the market’s FX rate, or by setting their own buy and sell rates.
This adjustment allows payment gateways to cover the risks and operations involved in currency conversion, forming a significant portion of the payment gateway costs. Understanding these fees is crucial for businesses operating internationally, as they can impact the total cost of transactions significantly.
Setup fees are a common initial cost associated with various online payment methods, including payment links and payment APIs. These fees often reflect the technical expertise required for integration and the complexity of the setup, especially in sophisticated online marketplaces and platforms.
In Malaysia, the variability in gateway setup fees is evident, with the top ten online payment methods charging anywhere from zero to RM300 per year.4 This range illustrates the diverse pricing models that payment gateways employ based on the services and technology they provide.
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With a clear understanding of the various payment gateway costs, including transaction fees, setup fees, and FX costs, you are now equipped to make more informed decisions when selecting a payment gateway that offers the best value for your money.
As you consider your options, take a look at Tazapay. Tazapay offers competitive platform fees at just 0.8 - 2.5% for non-card payments and 3.8% + $0.50 for card transactions. Moreover, it provides some of the lowest FX rates in the market and even promises to match any better rates you might find. Making the right choice for your payment gateway could mean the difference in creating significant savings and efficiency for your business operations.
Sources
1 2020 E-commerce Payments Trends Report: Singapore Country Insights (jpmorgan.com)
2 Average Credit Card Processing Fees (fool.com)
3 Wire Transfer Definition (investopedia.com)
4 Top 10 Online Payment Methods in Malaysia for Ecommerce - ZCOM MY Blog
Europe is one of the largest E-Commerce markets in the world, with revenue projected to reach USD$632.70B in 2024 and a projected market volume of US$977.40bn by 2029 according to predicted annual growth rates.1 This region boasts dynamic digital markets, including Germany, which ranks as the 7th largest globally after China, US and UK.2 This impressive growth is driven by the flourishing digital economies, creating an environment ripe for robust digital payment infrastructures to prosper.
Local Payment Methods in Europe play a crucial role in this growth, and one of the standout systems is Sofort, a pan-European payment service provider. Sofort is integrated into international payment gateways, facilitating cross-border payments and supporting e-commerce businesses. By leveraging online payment solutions like Sofort, merchants can offer user-friendly payment options that cater to the diverse needs of European consumers, enhancing payment security and boosting online transactions.
Sofort is a payment service provider based in Germany that enables users to make payments using their own online banking details, with transactions processed in real-time.3 Operating in over 13 European countries, Sofort's extensive reach is powered by Klarna Kosma’s open banking PISP-based infrastructure.4 This infrastructure allows Sofort to facilitate seamless online transactions and secure online payments across different banks, making it a key player in the European payment methods landscape.
The payment process with Sofort is similar to that of Trustly, as it involves direct banking facilitated via PISPs. This method allows users from various banks to make payments effortlessly, supporting the growing need for alternative payment methods and user-friendly payment options in the region. By integrating Sofort into international payment gateways, businesses can enhance their cross-border payments capabilities and offer reliable online payment solutions to their customers.
The 2023 European E-commerce Report reveals that 78% of all European internet users have purchased goods and/or services this year, with the overwhelming majority of those users coming from Western Europe.5 This indicates a strong preference for local payment methods in Europe, such as Sofort, among consumers.
B2B e-commerce constitutes a significant portion of the European e-commerce market, holding a market share of approximately 63.1%. While B2B dominates, B2C e-commerce has also seen substantial growth, particularly during the pandemic, when over 87% of internet users in the region were e-shoppers in 2020. Although this number has slightly dipped to 85% this year, it still represents a robust market for online payment solutions.6 This trend underscores the importance of payment service providers like Sofort, which cater to the evolving needs of European consumers by facilitating secure online payments and enhancing online transactions.
The steady demand for user-friendly payment options and the growing preference for alternative payment methods suggest a positive outlook for Sofort’s business prospects in the region.
While many strides in technological improvement have led to significant advancements in the online payment gateway market, none are perfect. It is crucial to consider their benefits and drawbacks before making a decision. Here are the pros and cons of using Sofort:
Sofort, being a pan-European payment gateway, is already an international payment gateway in some respects. It is supported in 12 countries: Austria, Belgium, Finland, France, Germany, Italy, Norway, Poland, Spain, Switzerland, The Netherlands, and the United Kingdom. This extensive connectivity enables cross-border payments and integration within international payment gateways across these major European markets.
However, this list, while comprehensive for the larger markets in each quadrant of the EU, does not cover all EU countries, nor does it include markets outside the EU. This limitation means that for transactions made outside Sofort’s supported countries, a third-party payment service provider is required as the international payment gateway to facilitate them.
This understanding of how Sofort fits within international payment gateways is crucial to optimise cross-border payments and cater to a diverse European customer base.
How Sofort Payments Work
Sofort payments normally involve the user accessing their bank account directly via Sofort and inputting their PIN and TAN to complete the checkout process. Once the user’s credentials are verified, the funds are simply transferred directly from the user’s bank account to the merchant’s account.
In the event of an international transaction outside of the EU, the buyer would first pay through the merchant’s third-party payment provider of choice, selecting Sofort as the payment method at checkout. The payment process proceeds normally until checkout is finalised. After this, the funds are transferred from the user’s bank account into the third-party payment provider’s local bank account. Subsequently, the funds are moved into the payment provider’s international accounts before being disbursed into the foreign seller’s bank account. This multi-step process ensures that secure online payments are maintained even in complex international transactions.
Currently, there are no fees for using some of Sofort’s payment services, including the app itself and certain BNPL options. However, as Sofort functions as a payment gateway, it employs various methods and rails to process transactions. Sofort’s transaction fees typically range from €0.10 + 1-2% to €0.25 + 3.29%.
When using Sofort as a payment method through a third-party payment service provider acting as an international payment gateway, additional costs such as setup fees, FX costs, and potential hidden costs may apply. These costs can impact the overall payment processing expenses, making it essential for businesses to consider them when planning their cross-border payments strategy.
Understanding Sofort’s fee structure is crucial for businesses aiming to optimise their online payment solutions and enhance their e-commerce payments strategy. By leveraging Sofort’s cost-effective transaction methods, businesses can offer user-friendly payment options to their customers while maintaining secure online payments.
To further improve your prospects in the European market, consider partnering with a robust and reliable third-party payment provider like Tazapay. We offer access to over 173 countries and are secured with 256-bit encryption, ensuring that every transaction is safe and secure. By integrating Tazapay as your international payment gateway, you can lower your transaction fees, enhance your payment processing capabilities and effectively manage cross-border payments.
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In recent years, Singapore has rapidly evolved into a digital-first economy, with the island nation at the forefront of adopting innovative financial technologies. The emergence of digital wallets has signaled a shift in consumer preferences, with predictions suggesting they might soon eclipse traditional card payments. Central to this digital revolution is PayNow, a system that has transformed the way transactions are conducted in Singapore, promising a seamless, efficient, and secure method of payment.
Developed under the auspices of the Association of Banks in Singapore (ABS), PayNow is more than just a payment method; it's a cornerstone of Singapore's ambition to become a fully cashless society. This real-time payment platform enables users to send and receive money instantly using just a mobile number, NRIC/FIN, or UEN number, integrating seamlessly with the Singapore Quick Response Code (SGQR) for QR code payments. Supported by a consortium of major banks and financial institutions under the regulation of the Monetary Authority of Singapore (MAS), PayNow is a testament to Singapore's cohesive approach to financial innovation.
Updating the statistics with the latest information, PayNow's trajectory in Singapore showcases the nation's accelerated embrace of digital payments. In 2020, Singapore witnessed a dramatic surge in real-time transaction volumes, reaching 138.38 million, a 48% increase from 2019. The value of these transactions also saw a significant jump of 40%, escalating from US$110 billion in 2019 to US$154 billion. The growth trend is projected to continue, with real-time transactions expected to climb at a compound annual growth rate (CAGR) of 23.2% to hit 392.94 million by 2025. This would elevate the total transaction value at a CAGR of 17.74%, underlining the increasing significance of digital payments in Singapore's financial landscape (Fintech Singapore).
The recent expansions into real-time cross-border payments further underline PayNow's evolving role in the financial ecosystem. 2023 marked a pivotal year as Singapore initiated real-time cross-border payment connections with neighboring countries. These developments, facilitated by the Monetary Authority of Singapore (MAS), aim to enhance convenience for cross-border fund transfers and small-value payments. The introduction of cross-border QR code payment linkages with Malaysia and Singapore, along with the establishment of a cross-border linkage between Singapore’s PayNow and India’s UPI, highlights the city-state's commitment to fostering financial inclusion and bolstering the ASEAN economy through improved payment connectivity (Fintech Singapore).
While PayNow excels in facilitating local transactions, its integration with international payment systems like Tazapay represents a significant leap forward. This synergy allows Singaporean businesses and consumers to participate in the global marketplace more effectively, providing a streamlined process for cross-border transactions. Through platforms like Tazapay, users can easily transfer funds internationally, opening up new avenues for commerce and personal transactions alike.
Tazapay stands out by offering a simplified and secure method for leveraging PayNow in international transactions. By facilitating the transfer of funds to Tazapay's Singapore account via PayNow, and then on to the recipient's foreign account, it bridges the gap between local and global payment ecosystems. This process not only enhances the utility of PayNow but also offers businesses a competitive edge in the international market.
The cost-effectiveness of PayNow for local transactions is clear, with nominal fees and a structure that promotes accessibility. However, the dynamics shift when considering international transactions. The use of third-party platforms like Tazapay introduces additional costs, albeit often lower than traditional banking fees. For businesses looking to expand globally, understanding these financial nuances is crucial in selecting the most efficient payment methods.
As PayNow continues to evolve, its potential to shape Singapore's digital economy grows ever more significant. Its integration with international payment gateways heralds a new era of financial connectivity, enabling Singapore to further solidify its position as a global financial hub. The ongoing developments in digital payment technologies promise to enhance PayNow's offerings, ensuring that Singapore remains at the forefront of the digital payment revolution.
For businesses and individuals alike, the journey towards a cashless society is filled with opportunities. Embracing platforms like PayNow and Tazapay not only facilitates easier transactions but also opens up new horizons for global engagement. As we look to the future, the role of digital payment systems in driving economic growth and fostering global connections cannot be underestimated.
In conclusion, PayNow's journey from a local payment solution to a key player in international transactions encapsulates the essence of Singapore's digital transformation. Its continued adoption and integration with global payment systems underscore the importance of digital innovation in today's interconnected world. As we embrace these technologies, the prospects for seamless, secure, and efficient transactions are boundless, heralding a new chapter in the story of digital payments.
India stands at the forefront of the digital revolution, marking itself as one of the fastest-growing digital economies worldwide. With over 117 billion digital payment transactions recorded in 2023, and an average of 380 million transactions per day by December 2023, the country's trajectory towards digital integration is unmistakable. Central to this digital transformation is the Unified Payment Interface (UPI), developed by the National Payments Corporation of India (NPCI), embodying India's rapid embrace of digitalization to simplify financial transactions across the board.
UPI stands as a beacon of innovation in real-time payment systems, facilitating inter-bank peer-to-peer (P2P) and peer-to-merchant transactions through a seamless two-click factor authentication process. Governed by the Reserve Bank of India (RBI), UPI's framework enables transactions via a smartphone application, heralding a new era of banking and financial services. Its resemblance to Singapore's PayNow underscores a global shift towards government-led digital payment solutions, fostering an ecosystem where transactions are not just secure but also universally accessible.
In 2023, UPI transactions have seen remarkable growth, with the total transactions processed by UPI standing at 117.6 billion for the year. Specifically, for December 2023, UPI payments in India reached 12.02 billion transactions, with payments worth Rs 18.23 lakh crore being processed in just that month. This represents a 54% year-on-year growth in terms of volume and a 42% growth in transaction value annually (Economic Times) The adoption of UPI spans across diverse demographics, with its popularity not confined to urban centers but also penetrating rural areas, demonstrating the platform's wide acceptance and adaptability.
The international operations of UPI have notably expanded beyond its initial reach. As of the latest updates in 2024, UPI's global footprint has extended to several new countries, making it a more versatile option for international payments. Specifically, France has recently adopted UPI, joining other countries like Bhutan, the United Arab Emirates (UAE), Malaysia, Singapore, Nepal, Oman, Qatar, Russia, Sri Lanka, Mauritius, and the United Kingdom in embracing this system. These expansions underscore UPI's growing acceptance and its potential as a global payment gateway.
This broadened adoption facilitates cross-border transactions, allowing users in these countries to leverage UPI for seamless and secure payments. The collaboration with various international partners and payment providers highlights UPI's versatility and its capability to streamline payment processes across different markets. This development is part of the National Payments Corporation of India's (NPCI) ongoing efforts to extend UPI's reach, reflecting the platform's potential to influence the global digital payment ecosystem significantly.
For regions yet to establish direct UPI connectivity, international transactions are streamlined through third-party payment providers, acting as bridges between UPI and global markets. Here’s how the process unfolds:
Initiating Payment: Users initiate transactions by transferring funds to the payment provider's bank account in India via UPI. This is typically done by scanning a QR code or barcode within the UPI app, representing the transaction amount.
Global Fund Transfer: Subsequently, these funds are transitioned into one of the payment provider’s international accounts. The final step sees the funds disbursed to the recipient's bank account abroad, completing the international transaction.
This model exemplifies UPI's adaptability and its growing acceptance as a versatile solution for international payments, providing a seamless, secure, and efficient transfer mechanism across different geographies.
Given the diverse landscape of third-party payment providers facilitating UPI transactions internationally, businesses and individuals are advised to select partners offering comprehensive support for a wide range of localized markets. This ensures not only the broad usability of UPI across various international platforms but also enhances the efficiency and security of cross-border payments.
With ongoing discussions to further expand UPI's reach to additional countries, the future of international digital payments looks promising, positioning UPI at the forefront of the global digital economy's evolution.
Seamless Payment Experience: UPI's integration with numerous payment apps and digital wallets, alongside its vast network of banks, provides a hassle-free transaction process.
Instant Transactions: The real-time processing capability of UPI ensures transactions are completed within seconds.
Security and Ease of Use: Enhanced with two-factor authentication and a unique UPI ID, the platform guarantees a secure yet straightforward payment experience.
Dependence on Internet Connectivity: The efficacy of UPI is contingent on reliable internet access, limiting its use in connectivity-challenged regions.
Security Concerns: Despite robust security measures, users must remain vigilant against potential phishing and fraud attempts due to the PIN-based authentication system.
Expanding into India's digital market requires a keen understanding of the country's tax and compliance landscape, especially for SaaS companies and digital eCommerce merchants leveraging UPI for transactions. Critical to this expansion is navigating the intricate documentation requirements, including obtaining a Tax Residency Certificate (TRC) and making a No Permanent Establishment (PE) Declaration, among others. These steps are vital for leveraging tax benefits under Double Taxation Avoidance Agreements (DTAAs) and ensuring smooth operation within the legal framework.
Furthermore, the implementation of GST on digital services and the significance of the Equalisation Levy on foreign e-commerce transactions underscore the evolving tax regime in India. These measures aim to ensure a level playing field between domestic and international players in the digital economy. As such, international businesses must stay abreast of these regulations to optimize their tax liabilities and maintain compliance. Download our eBook to understand this in detail
For businesses looking to streamline this process, leveraging platforms like Tazapay can provide significant advantages. Tazapay simplifies the complexities of tax collection, compliance, and remittance, enabling businesses to focus on growth and market penetration rather than administrative burdens.
As the Unified Payment Interface (UPI) continues to evolve, its influence is set to extend beyond the Indian market, marking a significant shift in the global digital payment ecosystem. UPI’s initiatives aimed at expanding its international reach and enhancing its features for global usability are pivotal. In this landscape of growth and innovation, UPI is well-positioned to facilitate seamless and secure online payments on a worldwide scale, embodying India's ambitious vision for a digitally empowered global economy.
In this evolving scenario, Tazapay stands out as a crucial player, offering an innovative solution that integrates UPI alongside other local payment options across 80+ locations with just one integration. This strategic collaboration enables businesses to leverage UPI’s simplicity and security while also accessing a broad spectrum of payment methods globally, ensuring they can meet the diverse preferences of customers worldwide. Tazapay's one-stop payment solution signifies a leap towards creating a more inclusive and accessible digital payment infrastructure, making it easier for businesses to engage in cross-border commerce without the hassle of managing multiple payment integrations or local entities.
Familiarising yourself with financial institutions in Singapore is crucial for the successful localization of your business. As one of the most dynamic financial hubs in Asia, Singapore offers a fertile ground for expanding your eCommerce business.
Read on for a full guide to 10 of the top banks in Singapore that are pivotal for your online payment gateway, and a quick overview of the payment landscape in the country.
The banking infrastructure in Singapore is not only steadily optimised for an increasingly digitised global economy but also well-integrated into the local populace. In 2022, Singapore topped the area of financial inclusion, beating powerhouse economies such as the United States, Britain, Hong Kong and Japan1, and attained a 92% internet penetration level in the country.2
This digital transformation is further supported by the government's proactive stance towards digitalisation, with initiatives such as PayNow and e-wallet integration enhancing Singapore's online payment gateway capabilities.
As such, the payments landscape in Singapore is largely digital, with card payments being the most popular online payment method. However, current trends in local payment solutions forecast that e-wallet payments will soon surpass cards by 2026, signalling a significant shift in consumer preferences.3
DBS Bank, the largest bank in Singapore by total assets (SGD 686 billion as of 2021), was founded in 1968 by the government of Singapore. The bank excels in providing a variety of financial products and services, including personal and business banking, investment banking, and wealth management. DBS Group champions electronic payment methods for its customers:
Most third-party international payment gateways, including Tazapay, support DBS's bank redirected payment methods and card payments, catering to eCommerce transactions. Incorporating the PayNow system enhances familiarity for Singaporean buyers, fostering trust for international merchants.
Founded in 1932, OCBC is the second-largest bank in Singapore with over SGD 542 billion in total assets as of 2020. It provides robust financial products and services suitable for a thriving digital economy:
UOB, ranking third in Singapore by assets with over SGD 459 billion (2021), has a prominent presence in the region, headquartered in the former tallest building in Southeast Asia. The bank offers:
A multinational presence since 1859, Standard Chartered Bank boasts over SGD 153 billion in total assets as of 2021 and is a trusted name among Singaporeans due to its long-standing reliability. The bank offers:
Maybank, a leading Southeast Asian bank with a strong Singapore presence (SGD 69 billion in assets as of 2021), operates over 2,600 branches across 18 countries. The bank offers:
Citibank, with SGD 52 billion in assets as of 2021, offers a diverse range of financial services, reinforcing its significant role in Singapore's banking sector. The bank offers:
HSBC, a global financial institution, holds approximately SGD 27 billion in assets as of 2021 and shares a historical lineage with Standard Chartered in British colonial history. The bank offers:
With a robust SGD 5.2 billion in assets (2021), the Bank of China marks China’s expanding influence in the Asian digital economy. The bank offers:
This Japanese banking leader, significant in Singapore, manages over SGD 5.2 billion in assets (2021) and has been a solid player since 1963. The bank offers:
Europe's largest banking group, BNP Paribas, holds about 3.7 billion SGD in total assets (2021) and maintains a strong European and global banking footprint. The bank offers:
With a clear understanding of the preferred banks in Singapore, you can better tailor your online business for the local market. Integrating with these banks through a payment gateway like Tazapay not only sets your business apart but also leverages localised payment methods to enhance customer trust.
Tazapay, operating with a 0.8%-2.5% fee for international transactions through local bank transfers, offers a compelling advantage for expanding your business in Singapore. Contact Tazapay today for more details and to take your business to the next level.
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