This blog is based on our analysis, Growth Opportunities in Payments and Banking as a Service (BaaS), 2025-2030, authored by Frost & Sullivan’s growth expert, Dewi Rengganis, from the Enterprise Wireless Services team.
The need for digital payments, virtual wallets, and embedded finance solutions is expanding across verticals, with businesses in retail, eCommerce, travel, and transportation showing especially strong momentum in the APAC region. This is driven by open banking initiatives, regulatory support, and fintech innovation. As a result, the payments and Banking-as-a-Service (BaaS) vertical is evolving — ushering in service-based pricing models, smart payment hubs, and new avenues for cross-industry collaboration — all aimed at delivering more personalized and seamless customer experience (CX).
This transformation is fueled by megatrends like:
- Embedded Finance: Making banking, payments, lending, and insurance services available directly within non-financial services platforms.
- AI and Automation: Harnessing natural language processing (NLP), big data analytics, and machine learning (ML) to facilitate the autonomous management of cash, risks, and business assets.
- Neobanks and Digital Banks: Using third party platforms and BaaS to scale digital banking services like payments and account management.
- Cross-border Financial Services: Leveraging open application programing interfaces (APIs), distributed ledger technology (DLT), and blockchain-based solutions for securing international transactions.
- Mobile Wallet Interoperability: Developing national real-time payment (RTP) systems and unified platforms for higher payment interoperability.
- Digital Nation Initiatives: Investing in the expansion of digital infrastructure, thereby taking advantage of technologies like 5G, Internet of Things (IoT), edge processing, and cloud computing.
Frost & Sullivan’s latest analysis unpacks the evolution of APAC's payments and BaaS ecosystem, delving into:
- The growth potential of BaaS across 11 APAC countries.
- Emerging growth opportunities in payment hubs, AI-first banking solutions, and decentralized financial modules.
Which strategies will help you capitalize on growth opportunities emerging from these megatrends?
Strategic Imperatives Transforming APAC’s Payments and BaaS Landscape
Now, industry incumbents that prioritize the following imperatives can position themselves favorably to secure long-term competitive advantages and capitalize on new opportunities worth $114.24 billion:
- Innovative Business Models: Focusing on service-based pricing models that generate supplemental revenue through data monetization, enhanced analytics, targeted marketing, and personalization.
- Disruptive Technologies: Investing in next-generation APIs and developer portals that easily integrate into existing customer websites, applications, and platforms. This will help in democratizing access to digital commerce.
- Industry Convergence: Forging collaborative alliances with the right fintech companies to customize payment solutions for segments like travel and tourism, automotive transportation, retail, and government services.
How will you adapt your growth strategies in payments and BaaS to factor in these imperatives?
Growth Avenues in Banking as a Service (BaaS), Smart Payments, and Embedded Finance
Download full analysis for in-depth intelligence on APAC’s payments and BaaS ecosystem.
Top 3 Growth Opportunities for Providers to Capitalize On
As governments ramp up efforts around financial inclusion and open banking, the cost of payment services is steadily dropping. While this is great news for customers, it puts pressure on providers to rethink their strategies—especially as more users switch to competitors offering low-cost, feature-rich alternatives. This implies that providers will need to find innovative ways to maximize value and protect margins. To stay competitive, they must differentiate with product/technology innovation, better integrations and interoperability, and value-add services.
Further, the following growth opportunities can help industry incumbents better differentiate themselves:
- Payment Hubs:
- Building unified platforms and cloud-native solutions to help enterprise customers streamline financial transactions and reduce the complexity of managing multiple, siloed systems.
- This will not only make it easier to modernize legacy infrastructure, but also support better regional compliance—paving the way for more agile, efficient, and decentralized payment ecosystems.
- Serving Untapped Segments
- Today, most BaaS solutions are geared toward the retail sector, leaving a significant opportunity in underserved segments like small and medium-sized enterprises (SMEs) and corporate banking.
- Providers that step up to offer customized solutions for these businesses—addressing challenges like credit access, cash flow management, and payment efficiency—stand to build long-term value and competitive advantages.
- AI and Automation:
- Leveraging AI to process high-volume, real-time, and bulk payments, thereby strengthening the payment and banking value chain.
- By scaling infrastructure intelligently, providers can enable personalized recommendations, better fraud detection/management, automated issue resolution, optimized payment routing, and improved dispute handling/reconciliation.
Do you have the tools to calculate the ROI potential of these growth opportunities?
Download full analysis to supercharge your organization’s embedded finance action plan.
From fintech innovation to government-backed digital nation initiatives, APAC’s finance transformation is unstoppable. Businesses must tap into emerging models like BaaS, embedded payments, and payment hubs to thrive. With customer expectations soaring, the time to act and adapt is now — What’s your strategy to turn regulatory shifts and open banking initiatives into a competitive advantage?
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