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Digital trade

Making digital payments to power 21st century trade


Published 21 June 2022

With its digital payments innovations and many pilot programs, Southeast Asia can be the global model in promoting fluid cross-border payments. The challenge now is to ensure full interoperability, especially among diverse trading partners moving with different speeds and following different standards and regulations.

The Covid-19 lockdowns accelerated the digital payments revolution as consumers and businesses transacted remotely online. In 2021, consumers in Indonesia, Thailand, Singapore, and Malaysia met a milestone: they preferred real-time digital payments to cash. The adoption of digital payments is also enabling cross-border commerce, as firms that use digital payments are more likely to export and diversify their markets.

However, many challenges remain in translating payments innovation to global transactions. One key obstacle is the limited interoperability of payments systems across borders. Another persistent challenge, especially in low-income countries, is the heavy use of cash. The adoption of data privacy and cybersecurity rules in Asia and beyond is also complicating cross-border data flows.

This primer on cross-border payments innovation by Kati Suominen of Nextrade Group is the second in a series of papers focused on use of technology to enable cross-border trade. In the first section, the paper discusses the rise of various payment innovations, from digital wallets to real-time payments, crypto currencies, and central bank digital currencies (CBDCs). This section also explores emerging facilitators of cross-border payments and settlement, such as blockchain and smart contracts, and outlines ongoing work by governments to promote cross-border payments. The subsequent section discusses the pathways and policies for promoting trade through innovative, interoperable, and inclusive payments, especially in Southeast Asia.

© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).


Kati Suominen is a Research Fellow at the Hinrich Foundation. She is the Founder and CEO of Nextrade Group that helps governments, multilateral development banks, and Fortune 500 technology companies enable trade through technology.

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