Southeast Asia's e-commerce market is projected to be worth US$325 billion by 2028, fuelled by the rapid adoption of digital payments and regional interoperability, unlocking more opportunities in cross-border commerce for businesses, according to a new report by the market intelligence firm IDC.
The report titled "How Southeast Asia Buys and Pays 2025" marks the fourth edition of the IDC InfoBrief since 2021. Commissioned by the global payments platform 2C2P and Antom, it surveyed 600 respondents across six Southeast Asian markets -- Indonesia, the Philippines, Malaysia, Singapore, Thailand and Vietnam -- examining the evolving digital payments landscape as a whole and in each market.
As the fifth-largest economy in the world, Southeast Asia's exceptional growth trajectory is largely driven by its rapidly expanding e-commerce sector, underpinned by increasing digital payment adoption.
The report sheds light on how payment trends are reshaping business strategies and laying the foundation for future growth opportunities in the region.
To maximise reach within local markets, it is essential to offer customers their preferred payment methods to enhance the customer experience and drive higher conversion rates. Among the highlights from the report:
- Growth in e-commerce digital payments: By 2028, digital payments are expected to account for 94% of total e-commerce payments in Southeast Asia. The most significant growth is in domestic payments (97.9%) and mobile wallets (94.9%), which have been instrumental in expanding the reach of e-commerce in regions that traditionally relied less on cards.
- Surge in real-time payments (RTPs): RTPs will see exponential growth by 2028, reaching more than $11 trillion. This is already evident in Singapore, where RTP systems like PayNow are the third-most supported payment methods according to surveyed merchants in 2024. The rise in RTPs in Southeast Asia is largely driven by government initiatives to reduce reliance on cash and to promote lower-cost, fast payment methods that meet the needs of both consumers and merchants.
- Dominance of mobile wallets and domestic payments: Mobile wallets and domestic payments lead in popularity across Southeast Asia. In 2023, mobile wallets were the top choice in Indonesia, Malaysia and Vietnam, while domestic payments dominated in Singapore and Thailand. This trend continued in 2024, with mobile wallets the No.2 most accepted payment method by surveyed merchants in Singapore and Philippines, and No.3 in Indonesia and Thailand.
Cross-border commerce is another area poised for impressive growth and new opportunities in e-commerce. Intra-Southeast Asia cross-border commerce is projected to reach $14.6 billion by 2028, an increase of 2.8 times from 2023.
Except for Vietnam and Indonesia, average cross-border transaction values per customer surpass domestic values in Southeast Asia markets, highlighting significant opportunities for businesses operating in the region. Among the drivers of this trend:
- Regional payment connectivity (RPC): Cross-border commerce is further supported by initiatives such as RPC, joined by all six markets in Southeast Asia. The collaboration aims to strengthen and streamline inter-country payments, focusing on the development of seamless, efficient and cost-effective cross-border transactions.
- Higher returns: For 62% of surveyed Southeast Asian merchants that sold their services and products across borders, such transactions averaged a 21% higher amount than domestic transactions. Merchants stand to reap significant rewards by looking beyond their shores and building up their capacity to cater to neighbouring markets.
- Untapped potential of intra-regional trade: Despite its promising growth, intra-regional trade remains underutilised, accounting for only a small fraction of total cross-border commerce in each market. To fully capitalise on this, merchants must gain a deeper understanding of the distinctive operating environments in each market while tapping into shared advantages. By strategically addressing these factors, businesses can unlock the full potential of intra-regional trade and drive sustainable growth.
"Southeast Asia's e-commerce landscape is evolving at a breathtaking pace. Merchants recognise the immense opportunities this growth brings them in driving e-commerce revenue, but also acknowledge the increasing complexity it brings to their operations," said Agnes Chua, managing director of business and product development of 2C2P.
"This includes common challenges such as customer support and issue resolution, payment gateway integration and technology issues."
Gary Liu, general manager of Antom at Ant International, said as businesses expand across borders, seamless and efficient transactions are essential for maintaining competitiveness.
"At Antom, we see payments not only as infrastructure, but also as a catalyst for business growth," he said.