- The Age of ASEAN: Building Trust in Southeast Asia's Digital Future
Opinions on topical issues from thought leaders, columnists and editors.
As ASEAN is positioning to be the heart of digital economy, fostering trust is key in reaping the benefits of growing digitalisation and further empowering the vulnerable segments of the population.
Siti is just one of 70 million micro entrepreneurs driving economic growth in the Association of Southeast Asian Nations (ASEAN) region. Over the last two decades, the region has seen its real GDP grow by 5 per cent annually, reaching US$3.8 trillion in 2023, making it the fifth-largest-economy globally.
With a range of digital food delivery and e-commerce platforms helping her connect with more customers, business has never been better. While Siti still accepts cash, these digital apps have made it easier for customers to pay, and for Siti to manage her finances and bookkeeping, with a simple tap on her phone.
In the bustling streets of Jakarta, 50-year-old Siti (name changed) sits behind her food stall, where the aroma and sizzle of fried rice and grilled satay mingles with the hum of passing motorbikes.
With digitalisation empowering microenterprises like Siti's, it is no surprise that ASEAN's digital economy is poised to reach almost US$2 trillion by 20230.
A foundational piece of this growing digital economy is the proliferation of instant payment systems (IPS) and, more recently, the rapid adoption of low-cost national QR payment channels.
From Indonesia's QRIS to Cambodia's KHQR and Thailand's PromptPay, ASEAN has swiftly adopted the digital way to pay, with the share of digital payments to gross transaction volume already surpassing cash with just 48 per cent in 2022 to about 56 per cent in 2024.
With payments transmitted directly to the merchant's digital accounts, microenterprises can now easily manage their books, helping them monitor the growth of their business.
ASEAN continues to make strides in building and expanding cross-border QR payment linkages. Through the commitment and hard work of the ASEAN Working Committee on Payment and Settlement Systems (WC-PSS), several ASEAN countries – Cambodia, Indonesia, Lao PDR, Malaysia, Singapore, Thailand and Viet Nam – are now able to conduct cross-border QR payment or person-to-person funds transfers. This means that financial processes that used to take days are now completed within minutes, enabling remittances, business payments including e-commerce, and tourism-linked transactions. This translates into bigger business opportunities for microenterprises.
Advancing digital payments and finance platforms – which is also reflected in the ASEAN Digital Masterplan 2025, the Bandar Seri Begawan Roadmap, and the ASEAN Digital Economy Framework Agreement (DEFA) – is a testament of ASEAN's collective vision for inclusive digital growth and increased accessibility especially for the smallest businesses, offering a more seamless system that lowers barriers to entry and reduces operational costs.
Trust - Integral to Fostering Inclusion
Digital payments clearly serve as an entry point to broader financial services that help boost productivity and incomes for microenterprises. Yet, despite the increasing digital savviness, microenterprises still face hurdles in accessing much-needed financing. This is exacerbated by microenterprises' mistrust in the digital ecosystem due to cases of fraud, hidden fees, and lack of recourse, which could potentially undermine their growth.
In Indonesia, for example, only 41 per cent of merchants using QRIS completed at least one transaction per month, and 18 per cent remained dormant, largely due to trust erosion from unexpected charges and unresolved disputes.
It is therefore imperative to build and ensure MSMEs' continued trust in digital payments and the broader financial ecosystem. The United Nations' Better Than Cash Alliance's Trust Quotient Policy Toolkit, which was developed together with the ASEAN Working Committee on Financial Inclusion (WC-FINC) and noted by ASEAN Ministers and Central Bank Governors, reflects the region's collective commitment to this vision. The toolkit is testimony to the key role of policies and regulations as nascent IPS are being built and connected across borders.
Focusing on fraud, hidden fees, and lack of recourse, the Trust Quotient Policy Toolkit provides policy and regulatory recommendations to promote clear pricing, accessible dispute resolution, and transparent data practices, which will then help ensure micro-merchants confidently adopt digital payments in a safer, more accountable ecosystem.
Ensuring quick and seamless recourse mechanisms, particularly for small-value disputes, is critical for fostering trust as delays or unresolved issues can significantly damage confidence.
Programmes such as the 'BOB' (BSP Online Buddy). chatbot initiative by Bangko Sentral ng Pilipinas showcase how technology can simplify dispute resolution and build trust. Similarly, the Philippines' Paleng-QR Ph and Indonesia's QRIS SIAP have helped merchants through financial literacy, streamlined tools, and responsive support. Simplified data privacy disclosures can further empower merchants to navigate digital systems confidently.
Moreover, integrating support for digital financial services into existing MSME development programmes can be transformative. Indonesia's Jakpreneur programme, for instance, onboards merchants to digital platforms but also provides training in financial literacy and business management.
For Siti, the success of her business relies not just on the convenience of digital payments but her trust in continued use of digital payments which grants her a formal financial history.
By addressing challenges such as hidden fees, lack of recourse, and data privacy concerns, ASEAN can ensure that entrepreneurs like Siti feel confident in trusting and embracing digital transformation and ensure that no enterprise is left behind. This, in turn, increases her opportunities to access formal credit to grow her business and income.
-- BERNAMA
Satvinder Singh is Deputy Secretary-General of ASEAN for ASEAN Economic Community.
Thomas Beloe is Director, UNDP Sustainable Finance Hub.
(The authors acknowledge the valuable inputs provided by the UNDP Bangkok Regional Office for this article.)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
4 hours ago
- New Straits Times
US-China trade talks to resume in seven days: White House
WASHINGTON: Trade negotiations between US and Chinese officials are expected to resume within seven days, following a phone call between President Donald Trump and President Xi Jinping. The discussions will place particular emphasis on rare earth minerals, White House Trade Adviser Peter Navarro confirmed on Friday. "We expect that a meeting will take place within seven days," Navarro told reporters at the White House, commenting on the timeline of the next round of trade talks. Navarro stated that Trump has been clear that "the rare earth issue will be key to that negotiation", as reported by Sputnik/RIA Novosti. The US delegation will include Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent, and Secretary of Commerce Howard Lutnick, according to Navarro. The advisor also mentioned that Thursday's call between Trump and Xi lasted approximately 90 minutes, during which both leaders demonstrated "a very clear understanding" of the expected outcomes of the upcoming discussions. Trump later shared on Truth Social that he had discussed "some of the intricacies" of the US-China trade deal with President Xi. He also announced that he had accepted Xi's invitation to visit China and extended a reciprocal invitation. Following high-level trade and economic talks in Geneva earlier in May, Washington and Beijing agreed to lower reciprocal tariffs by 115 percentage points each for 90 days. The US has reduced tariffs on Chinese goods from 145 per cent to 30 per cent, while China has cut tariffs on American imports from 125 per cent to 10 per cent. Later that month, Trump accused China of "totally violating" the Geneva agreement and remarked that "it is extremely hard" to reach a deal with Beijing.–BERNAMA
New Straits Times
4 hours ago
- New Straits Times
US, China officials clash at Shanghai business event
SHANGHAI: US and Chinese officials traded barbs at a celebration held by a US business chamber in Shanghai on Friday, as the chamber appealed to both countries to provide more certainty to American businesses operating in China. Scott Walker, consul general of US consulate in Shanghai, told a gathering of US businesses aimed at celebrating the 110th anniversary of the American Chamber of Commerce (AmCham) in Shanghai that the US-China economic relationship had been unbalanced and non-reciprocal "for far too long." "We want an end to discriminatory actions and retaliation against US companies in China," he said. In a speech that directly followed Walker's, Chen Jing, a Shanghai Communist Party official who is also the president of the Shanghai People's Association for Friendship with Foreign Countries, countered Walker's view. "I believe the consul general's view is prejudiced, ungrounded and not aligning with the phone call of our heads of states last night," he said. The interaction reflects the continued strained relationship between both countries as the trade war continues to simmer. US President Donald Trump and Chinese leader Xi Jinping spoke over a long anticipated call on Thursday, confronting weeks of brewing trade tensions and a battle over critical minerals. Trump later said they agreed to further talks. It came in the middle of a dispute between Washington and Beijing in recent weeks over "rare earths" minerals that threatened to tear up a fragile truce in the trade war between the two biggest economies. The countries struck a 90-day deal on May 12 to roll back some of the triple-digit, tit-for-tat tariffs they had placed on each other since Trump's January inauguration but the deal has not addressed broader concerns that strain the relationship and Trump has accused China of violating the agreement. Eric Zheng, president of AmCham Shanghai which counts over 1,000 companies among its membership, told reporters on the sidelines of the event that many companies had put their decision-making on pause due to the uncertainty. "People are looking for some more definitive, durable statements on both sides that enable businesses to feel more secure," he said.
The Star
6 hours ago
- The Star
Vietnam bride gifted lavish dowry of 100 civet cats worth US$70,000 to generate future income
BEIJING (SCMP): A Vietnamese woman who received a lavish dowry from her parents of 100 civet cats, gold bars, cash, company shares and several high-value properties has shocked social media. The unidentified 22-year-old comes from southwestern Vietnam and was married last May. As part of her dowry, her parents gave her 100 female civet cats, all capable of breeding, with an estimated total value of 1.8 billion Vietnamese dong (US$70,000). It also included 25 taels of gold, 500 million dong (US$20,000) in cash, company shares worth 300 million dong, seven properties and other valuable assets. In return, the groom's family offered a bride price of 10 taels of gold, 200 million dong in cash and diamond jewellery. Dowries remain an important tradition in many Asian countries, symbolising family wealth and the parents' commitment to supporting their daughter's new life. The bride's father, Hong Chi Tam, said that all his children have taken over the family business after graduating from university, and he wanted his daughter to own assets that could generate income. He said he would fully support her decision, whether she chose to raise the civet cats or sell them. 'My daughter is a business school graduate. She is fully capable of managing these assets. No matter the method, it ensures her financial independence,' Hong said. Civet cats are a valuable asset in Vietnam. A female that has given birth can be worth around 18 million dong (US$700), while a pregnant one can fetch up to 27 million dong. Their value partly comes from their role in producing Kopi Luwak coffee, which is considered one of the most expensive coffees in the world. The animals eat ripe coffee cherries, which then pass through their digestive system, producing beans that are collected, cleaned, processed and roasted. In addition to their role in coffee production, civet meat is also seen as a luxury food in China and Vietnam and has been used in traditional Chinese medicine. However, according to World Animal Protection International, civet cats are often captured from the wild using harmful methods such as box traps and snares. To fuel the industry, they are then sold to farms, where they are kept in small cages and fed poorly in stressful conditions, leading to self-harm, injury and an early death. The story, reported by ETtoday, drew a mixed online reaction. One online observer said: 'While people in China are still competing over cash dowries, Vietnamese tycoons are already giving away entire industry chains as dowries.' Another said: 'This is the real way to raise a daughter. Teaching her to fish is better than giving her a fish.' However, a third said: 'Behind the luxury is animal exploitation. We should reflect on the ethics of using wildlife in business and marriage transactions.' - South China Morning Post/ANN
