Expanding into Asia's payments industry? Avoid these 7 common pitfalls.

By Shona Sabah
Senior Manager - Strategic Growth Lead

Expanding into Asia’s payments industry presents enormous opportunities for growth, but it also comes with significant challenges. The region’s booming digital economy, increasing financial inclusion, and rapid adoption of fintech solutions make it a lucrative destination for payment companies. However, success requires more than just a strong product - it demands a carefully crafted go-to-market (GTM) strategy that considers the unique dynamics of the region.

APAC is home to diverse economies, regulatory frameworks, and consumer behaviors, meaning a one-size-fits-all approach will not work. GTM strategists must navigate a complex landscape of compliance requirements, competitive pressures, and technological expectations.

In my experience, payment businesses often fall into one or more of the following traps:

1. Underestimating Regulatory Complexities

Asia’s financial regulations vary widely across markets, with each country imposing distinct licensing, transaction, and data localisation requirements. Failure to conduct thorough due diligence can lead to costly delays or even regulatory roadblocks. For example:

• China’s stringent capital controls and licensing requirements make market entry difficult for foreign players.

• India’s Reserve Bank regulations require strict adherence to data storage and transaction monitoring laws.

• Indonesia and Vietnam have evolving e-money licensing frameworks that necessitate local partnerships to operate effectively.

Understanding these nuances and proactively engaging with regulators is essential for a smooth expansion.

2. Ignoring Local Payment Preferences

Assuming that credit cards dominate the region is a costly mistake. Many Asian markets have leapfrogged traditional banking systems, embracing alternative payment methods such as:

• Mobile wallets: Alipay and WeChat Pay (China), GCash (Philippines), Paytm (India)

• QR code payments: Widespread in Southeast Asia via PromptPay (Thailand), DuitNow (Malaysia), SGQR (Singapore)

• Bank transfer systems: India’s UPI, Singapore’s PayNow, and Indonesia’s BI-FAST

Failure to align with these preferences can severely impact adoption rates and user engagement.

3. Failing to Build Local Partnerships

Attempting to enter APAC markets without local alliances is a high-risk approach. Partnering with domestic banks, fintechs, and payment processors can streamline regulatory approvals, enhance merchant acceptance, and boost consumer trust.

For example:

• In Japan, working with established players like Rakuten Pay or PayPay can accelerate market penetration.

• In Indonesia, partnerships with e-money providers such as OVO and GoPay can facilitate integration into the local payments ecosystem.

Building strong local relationships is crucial to overcoming market entry barriers.

4. Overlooking Cross-Border Payment Challenges

Cross-border payments in APAC come with FX volatility, transaction limits, and strict regulatory oversight. A robust GTM strategy must ensure:

• Seamless currency conversion to mitigate friction in multi-currency transactions.

• Compliance with capital controls in markets like China, where outbound money movement is heavily regulated.

• Integration with regional payment networks such as ASEAN’s cross-border QR payment framework.

Moreover, understanding domestic versus cross-border payment trends is essential. For example, while Singapore and Hong Kong serve as major international payment hubs, domestic payment preferences in India or Indonesia are more localised.

5. Neglecting Mobile-First Infrastructure

APAC is a mobile-first region, with a significant portion of digital transactions occurring on smartphones. Poor user experience, slow transaction speeds, and weak fraud prevention measures can drive customers toward competitors with superior mobile offerings.

Essential mobile-first considerations include:

• Biometric authentication for secure transactions.

• Seamless in-app payment integration for e-commerce platforms.

• AI-driven fraud detection to reduce transaction risks.

Ignoring mobile optimisation can limit market penetration and user retention.

6. Misjudging Competitive Pressures

Global payment players (Visa, Mastercard, PayPal) must compete with strong local contenders such as:

• GrabPay and ShopeePay in Southeast Asia.

• KakaoPay and Naver Pay in South Korea.

• Paytm and PhonePe in India.

Without a compelling value proposition - such as instant settlements, localised rewards, or lower merchant fees - differentiation can be difficult. Understanding what drives consumer choice in each market is essential to carving out a competitive advantage.

7. Overlooking Government & Geopolitical Risks

Trade policies, foreign ownership restrictions, and shifting regulatory landscapes can impact market expansion. For example:

• China’s tightening grip on foreign financial services limits operational freedom.

• India’s evolving data localisation rules require firms to store transaction data within the country.

• Singapore’s fintech-friendly environment offers a gateway to the broader ASEAN market but comes with its own compliance expectations.

GTM strategists must stay informed about geopolitical developments to mitigate risks and adapt their market entry strategies accordingly.

Successfully expanding into APAC requires more than just ambition - it demands deep market research, regulatory expertise, strong local partnerships, and a mobile-first approach. By avoiding these common pitfalls, payment companies can position themselves for sustainable growth in the region.

If you’re looking to craft a GTM strategy underpinned by robust local insights, I’d love to chat. At KAE, I help payment and business technology companies understand what truly matters to their customers and how to position themselves for competitive success in APAC and beyond.