Today, commerce and payments innovation are accelerating rapidly thanks to insights and data that enhance efficiency, security, and growth.
The evolving role of payment technologies across businesses—from global enterprises to local small and medium businesses (SMBs)—provides valuable lessons for early adopters.
In the Philippines, SMBs and micro businesses made up 99.63% of the economy in 2023 and are poised for continued expansion, making them well positioned to capitalize on these trends.
Key developments underscore the growing importance of speed, security, automation, and personalization to meet shifting consumer expectations and drive business growth.
Unifying the backend of commerce
As consumers shop more online, businesses are enhancing their digital presence through social and live commerce, supported by unified backend platforms. These systems create seamless shopping experiences, improve cash flow predictability, and optimize operations.
For example, “search to purchase” features let consumers buy directly through social media, while new tools help creators link products for instant purchases. Live commerce is gaining traction, with major retailers increasingly successful in hosting shopping events.
Despite this digital focus, physical stores remain vital in Asia and the Philippines, with 85% of SMBs citing their importance. The unique connection offered by physical locations continues to deliver strategic value.
Embedded payments make the B2B leap
Embedded payments have transformed customer expectations, making transactions easier and shaping buying behavior. Businesses are integrating embedded finance to streamline B2B transactions, improve cash flow, and deliver seamless experiences.
Commerce-linked apps and in-car transactions (like public EV charger access) are embedding payments to simplify processes. ACH-enabled pay-by-bank models are growing in popularity due to lower fees, especially among younger consumers in Europe. However, in the Philippines, 48.2% of the population remains unbanked, limiting access to formal payment tools.
While large enterprises have long experience with embedded payments, SMBs are also rapidly adopting them to reduce payment cycles and minimize cart abandonment.
Turning digital identity into digital security
Payments and security are increasingly integrated to combat rising threats such as identity theft and cyberattacks. The Philippines recorded 17.7 million cyberthreat incidents last year, and global e-commerce fraud is projected to exceed US$343 billion by 2027, making advanced security measures essential.
In the US, passkeys are emerging to replace passwords with unique codes stored securely in the cloud—a critical innovation as AI-enabled fraud becomes more sophisticated. Biometrics such as fingerprint and facial recognition are also gaining traction, improving security and customer experience.
Cryptograms and other tokens are expected to streamline cross-border payments, while “tap-to-pay” technology is growing rapidly, underpinned by tokenization and biometric authentication.
POS becomes the place of service
The payment experience has evolved beyond the traditional point of sale into a “place of service.” This shift provides businesses with a 360-degree view of customer data and preferences, enhancing planning, pricing, and inventory management.
In restaurants, integrated payment systems allow consumers to search, order, and pay seamlessly—where the purchase itself becomes the payment. Digital tools increasingly power personalized recommendations and loyalty programs.
Although the POS market is projected to reach US$100 billion by 2027, with SMBs driving 70% of revenue, terminal penetration remains low in the Philippines—highlighting significant growth potential.
Payment orchestration gains momentum
Payment orchestration platforms efficiently route and process payments across multiple providers, supporting remittances and improving financial transparency. According to a recent survey, 76% of businesses have used payment orchestration for over five years, and 35% plan to increase investments next year.
Nearly 90% of businesses report improvements in operational efficiency, security, and fraud prevention from orchestration tools. AI is expected to further boost these benefits.
As these platforms evolve, they help retailers instantly disperse payments to vendors, manage diverse payment methods, and automate policies to reduce fraud and unauthorized transactions.
AI delivers early wins
Generative AI is transforming client services, fraud prevention, and compliance. In the Philippines—where smartphone penetration exceeds 90%—AI is powering “super wallets” that use voice commands for transfers, balance displays, and spending analysis.
AI is also enhancing fraud detection and risk control. While enterprises focus on using AI for data privacy, SMBs are keen to adopt AI to improve payments and fill skills gaps in the competitive labor market.
These trends highlight the fast pace of innovation in payment technology that will drive future business growth. From embedded finance to biometrics and AI, Asia’s enterprises must embrace these opportunities to stay competitive in an integrated global market.
Editor’s note: This piece was submitted by Krishnaraj Tantri, Senior Vice President, South and SEA at Global Payments.
READ MORE INSIGHTS.
