QR payments: The ASEAN way

Southeast Asia is leapfrogging global leaders and setting the new standard for digital payments.

Hilman Palaon

30 June 20254 min read

Last month, I took a trip across three different countries – Indonesia, the United States, and Thailand – with a single experiment in mind: could I eat, shop, and move around with nothing but my smartphone?

Living in Sydney, where tap-and-go is second nature – I pay for everything from coffee to ferry rides with my smartphone. Curious about digital payments elsewhere, I tested them during my trip. What stood out was Southeast Asia’s QR payments offering a blueprint for countries looking to leapfrog legacy payment infrastructure.

QR payments allow customers to scan a merchant’s unique QR code using their smartphones. The payment app, provided by a bank or financial technology company (fintech) and linked to the user’s account, prompts them to confirm the transaction. Once approved, the funds are transferred instantly, with real-time notifications sent to both parties.

First stop: Jakarta

QR payments are everywhere – not just accepted, but often preferred. Whether you're shopping at a supermarket, riding the MRT, or grabbing nasi goreng from a street vendor, there’s always a QR code ready to be scanned, even on vending machines.

Larger merchants accepted cards and digital wallets like Apple Wallet, and my Australian bank’s digital wallet worked seamlessly with tap-to-pay on point-of-sale (POS) terminals. Notably, there were no extra fees for using an international card – a sign of the Indonesian government’s strong push towards a cashless society.

A QR payment sign for the Bank DKI mobile payment app is displayed at a food stall in Jakarta (Dimas Ardian/Bloomberg via Getty Images)

Next up: Washington, DC

In a country that gave the world Apple Pay, surely I’d be in mobile-payment heaven? Well … not quite.

Washington, D.C.’s metro system was a highlight – simple, fast, and very mobile-friendly. I downloaded the SmarTrip app, linked it to Apple Wallet, and within minutes I was tapping through metro and bus turnstiles with ease. The integration felt slick and modern, exactly what you’d expect from a capital city.

Most merchants accepted tap-to-pay digital wallets, and I had no trouble using mine. However, not everything was smooth – some places were still cash-only, and to my surprise, a popular bagel shop didn’t accept cards or digital payments. Instead, they pointed me to an ATM inside the store so I could withdraw cash to pay.

At the airport for my domestic flight, I ran into another surprise. When I tried to pay for checked luggage using Apple Wallet, it didn’t work – only physical cards were accepted. And not just any card: the payment terminal only supported magnetic stripe swipes, with no tap or chip functionality. It felt like stepping back in time. On the flight, it was more of the same. Passengers paid for snacks with physical cards, swiped on Electronic Data Capture (EDC) devices – another reminder that parts of the US payment system are still stuck in the past.

A customer pays cash for a purchase at a store in California (David Paul Morris/Bloomberg via Getty Images)

Then: Bangkok

QR codes were everywhere – from street food stalls to tuk-tuks and ride-hailing cars – ready to scan for instant payment. Credit cards and digital wallets were accepted in more formal settings, though often with a catch: some smaller vendors warned of a 7 per cent surcharge for card payments.

I had my first chance to test Southeast Asia’s cross-border QR payment system when I paid a Thai vendor using my Indonesian mobile banking app. After scanning the QR code, the amount appeared instantly in Thai baht (THB), along with a real-time conversion to Indonesian rupiah (IDR) – no hidden fees, no hassle. The vendor got a confirmation, and I walked away with mango sticky rice and growing admiration for the system.

Still, cash remains king here. Most merchants, public transport, and even toll roads still accept it. A fully cashless future feels within reach – and should be the next step.

A leapfrog

The seamless cross-border QR payment system, powered by ASEAN central banks, offers an example of financial integration and interoperability. For travellers, it’s a game-changer. For businesses, it lowers costs. The region doesn’t need a single currency – it already has a practical alternative.

Southeast Asia’s digital payments revolution offers a compelling lesson for countries looking to modernise payments without the cost and complexity of rolling out card infrastructure. It introduces a new standard: bypassing the legacy systems in developed nations and moving straight to QR payments.

The future of payments isn’t being led by Silicon Valley, but shaped and refined on the streets of Southeast Asia.

So, what does this mean? For countries without a dominant card payment network – think many Pacific Island nations – they can skip the plastic card era entirely. The focus shifts to improving internet access and smartphone penetration. With QR payments, the cost of adoption is low, especially for small merchants who only need a printed QR code linked to their account, eliminating the need for costly EDC or POS devices.

The future’s already here – just look at Southeast Asia

I began this journey expecting the US to set the gold standard for digital payments. But by the time I returned home, it was clear: the real innovation is happening in Southeast Asia. Cities like Jakarta and Bangkok have shown that it’s entirely possible to build fast, inclusive, and low-cost payment ecosystems using nothing more than smartphones and QR codes – and they’re doing it at scale.

My experience revealed a quiet but powerful truth: the future of payments isn’t being led by Silicon Valley, but shaped and refined on the streets of Southeast Asia. It’s time we stop viewing the region as simply catching up – because in many ways, it’s already setting the pace.

About the author

Hilman Palaon

Dr Hilman Palaon is a Research Fellow at the Lowy Institute’s Indo-Pacific Development Centre. His work focuses on digital economy issues in the Indo-Pacific region, including financial inclusion, economic empowerment, and technology innovation.

Topics

ASEAN Economy Cyber & technology