Fintech gains edge in APAC card payment battle

Rising card volumes spotlight diverging strategies between banks, fintechs, and platform giants.

Fintech firms are gaining a competitive edge in Asia-Pacific’s $24.7 trillion card payment market, as their tech-driven agility allows them to scale faster and compete beyond borders. While banks and platform companies still dominate core segments, fintechs are increasingly shaping how digital payments evolve across both mature and emerging markets.

“Among these three, I see the FinTech players to be more competitive in the market because they are easy to expand, and usually they leverage the technology all over the world,” said Sean Fu, Senior Vice President, Greater China, at Global Payments.

Banks retain an advantage in reputation and card issuance, Fu explained, and can subsidise acquiring costs to secure major merchants. “But their disadvantages are also very obvious... outdated infrastructure and technology,” he said, adding that these inefficiencies often translate into slower processing and higher operational costs.

Platform companies, by contrast, benefit from high app stickiness and user engagement, yet face heavy technology costs and similar security and regulatory challenges as fintechs. Despite these barriers, fintechs are leading innovation in areas like buy-now-pay-later, contactless payments, and integrated wallets—making them nimble and globally scalable.

Assistant Professor Ruan TienYue, from the Department of Finance at NUS Business School, said competition is playing out in distinct lanes. “Banks are competing fiercely on card issuance as well as acquiring merchants. Fintechs... are leading different innovations... Platform companies... are integrating card payments into their own digital ecosystems.”

This shift in competitive dynamics is especially relevant in emerging markets like the Philippines and Malaysia, where fintechs are building traction. “Philippines... 99% is SMB. Their alternative payment method called QR PH is actually promoted by the government,” Fu said. In Malaysia, fintechs are targeting the tourist-driven hospitality segment with digital solutions.

Ruan noted that while mature markets like China and Australia lead in card penetration, “emerging economies are following very fast growth in terms of these digital payments.”

To extend card payment adoption further—especially in rural areas—both experts pointed to the need for public-private collaboration. “First of all is education... then infrastructure... then customised solutions,” said Fu, citing mobile banking and alternative payments as practical tools for expanding reach.

“Governments can lead more investment in infrastructure... and launch campaigns to promote the ownership and use of bank accounts and cards,” Ruan added.