How Have POS Payment Systems Helped SMEs in Southeast Asian Countries Increase Their Profit Margins?

Highlights:

• Introduction
• Reasons behind the growing adoption of POS payment systems
• Product launches and partnerships in the industry

In the post-globalization era, several developing countries in the Southeast Asia region such as Indonesia, Malaysia, Brunei, Thailand, Cambodia, etc., have witnessed a huge increase in their economic growth rate. These nations have seen strong GDP growth, with most sectors thriving over the past decades. As per many economists and policymakers, the emergence of small and medium-scale businesses has played a significant role in the rise of Southeast Asian countries as a major economic force. These experts have also pointed out that the governments in these sovereign states should focus on boosting their SMEs to maintain this high growth rate and improve the living standards of their citizens. To boost small retailers, commercial enterprises, and household businesses, many countries have started promoting POS payment systems to bring them into formal banking channels and provide them with financial stability in the long run.

Increased preference for POS payment systems creating new investment opportunities

A POS payment system is a digital solution that enables businesses and commercial enterprises to accept payments from customers at the point of sale. Apart from this, these systems also perform other functions such as inventory management and updating, sales tracking, barcode scanning, receipt printing, and record keeping. In Southeast Asia, POS payment systems are now widely used in small and medium businesses like restaurants, theaters, retail shops, and malls, driven by growing domestic and international trade.

Along with this, the advantages offered by these systems have enhanced their utility. For instance, the use of these systems improves the overall checkout speed and efficiency, thus helping businesses clear long queues. The barcode scanning and payment processing features of POS payment systems assist companies in eliminating wait times even during busy periods. Furthermore, the advent of mobile and contactless payment systems has further enhanced customer experience, thus improving brand credibility and loyalty. Apart from this, the software application used in POS payment systems updates inventory in real time and provides information to the business owner regarding the stock levels after each transaction. This reduces the need to manually enter the data each time after a sale, thereby increasing the efficiency and productivity of business operations.

Partnerships and launch of innovative products driving industry growth

Over the years, many leading IT firms and mobile payment app developers have launched innovative products to cater to the evolving dynamics of the Southeast Asia POS payment industry. For instance, in July 2024, Qashier, a fintech startup based in Singapore, unveiled a unique payment-linked loyalty program called Treats. This new scheme allows customers to earn points by making payments through cards specifically designed for the Treats program. A study conducted by the company highlighted that within months of launching this program, Qashier’s clients witnessed a growth of around 25% in customer purchases, thus ultimately boosting their revenue and profitability in the long run.

On the other hand, several companies in the Southeast Asia regions have established strategic alliances with their peers to increase their footprint in the industry. For instance, in November 2024, iServeU, a digital payment solutions developer for financial institutions in SE Asian countries, India, and the Middle East region, announced a partnership with PAX Technology, an electronics payment terminals developer. As part of this collaboration, both companies have agreed to develop an all-in-one soundbox terminal for QR-based transactions, and NFC and EMV Dip payments. iServeU and PAX Technology signed a MoU at the Singapore Fintech Festival 2024 to formalize this deal. The press release issued by these companies has also stated that these businesses are planning to invest in R&D activities to design innovative solutions to promote financial inclusion in various countries of this region.

To sum it up, the growth of the Southeast Asia POS payment industry is attributed to the expansion of various small and medium-scale enterprises in different countries of this region. Along with this, the rise in adoption of these digital solutions by commercial enterprises such as restaurants and retail shops has helped the market flourish in recent times. Furthermore, the convenience and automation offered by these financial tools are expected to increase their popularity in the coming period.

For more information on the leading growth drivers and investment opportunities in the market, contact our experts here!

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