Digital Transactions

Digital transactions are the foundation of cross-border digital trade. As such, the interoperability of infrastructure, policies, and standards is key to supporting the rise of dynamic and inclusive digital economies.

What are Digital Transactions? 

Digital transactions take place without the use of cash and may involve the collaboration of several parties, including financial institutions and several sectors within the economy. This encompasses solutions like online payments within and across borders, online transfers of government benefits, and other online financial exchanges.

Key Trends in Digital Transactions

Trend 1: Digital transactions go beyond payments

Digital transactions encompass many essential financial services in the region’s economy; from payments and financing to neobanking and government transfers, the wide range of services gives rise to varying degrees of interoperability between solutions and Digital Financial Service providers.

Trend 2: Digital transactions are on the rise in ASEAN

In ASEAN, the digital payments sector is projected to be worth at least AUD2.05 trillion. The momentum is likely to continue with:

  • The number of cross-border payments doubling in 2010-2022.
  • E-commerce penetration growing by 6% in 2019-2020.
  • Demand for digital-only banks and e-wallet growing across ASEAN.

Trend 3: Digital technologies support digital transactions

Traditional banks, FinTech players, and central banks are increasingly using digital technologies to develop and improve services. This is enabled by the increased availability and granularity of data, as well as interoperability driving investment and innovation.

Key Digital Transactions Standards

Financial messaging and payments standards

  • SWIFT Message Types (MT) and ISO 15022.
  • ISO 8583 – Financial transaction card originated messages—Interchange message specifications
  • ISO 20022 universal financial industry message scheme.

Application Programming Interface and Web Service Based Application Programming Interface (APIs)

  • ISO/TC 68/SC 9/WG 2 is responsible for the standardisation of ISO/DTS 23029 WAPI in Financial Services.
  • ISO/TS 23029:202043—Web-service-based application programming interface (WAPI) in financial services.

QR Codes

  • EMVCo technical specifications for “QR Code Specification for Payment System—Merchant-Presented Mode”.
  • ISO/IEC 18004—automatic identification and data capture techniques — QR Code bar code symbology specification.
  • ISO/IEC JTC 1/SC 31—Automatic identification and data capture techniques Technical Committee.

Universal Accessibility

  • International Standard: ISO/IEC GUIDE 71:2014 Guide for addressing accessibility in standards.
  • International Standard: ISO/IEC 30071-1:2019 Information technology- Development of user.
  • International Standard: ISO 21801-1:2020 Cognitive accessibility.
  • European Telecommunications Standards Institute. Public Procurement Standards EN 301-549: Accessibility requirements for ICT products and services.
  • The U.S. Federal Government. Section 508 of the Rehabilitation Act (Section 508).
  • W3C Web Accessibility Initiative. Web Content Accessibility Guidelines (WCAG).

Opportunities and challenges

Opportunities to seize

  • Growing usage – 85% of consumers in ASEAN have adopted digital payments, and this is set to continue growing.
  • Cross-border movements – Digital remittance flows are expected to reach AUD13 billion in ASEAN thanks to cost reductions.
  • MSMEs – An estimated AUD2.55 billion can be saved if 50% of all MSMEs in ASEAN adopt digital payments.
  • Enhancing economic participation – Universally accessible digital transactions are a flexible alternative that increase the range of opportunities for women, persons with disabilities, and marginalised social groups.

Challenges to overcome

  • Interoperability across borders – Key standards, policies, and regulations must be consistent to support closer cooperation and integration.
  • Digital financial inclusion – Across the region, nearly 70% of the population remains underbanked, with women, persons with disabilities, and marginalised social groups being highly represented in this group.
  • Digital financial literacy – Digital transactions can be more difficult to manage than cash; their non-physical nature can also increase the risk of fraud or cybercrime.
  • Unequal connectivity – Gaps in connectivity are strongly felt in rural or remote areas, hindering the digitalisation of largely informal, cash-based activities undertaken by women, persons with disabilities, and marginalised social groups.

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