Banks operating in Southeast Asia are set to miss around 14.3 percent of their payments revenue by 2025, which amounts to $5 billion, according to reports. This is mainly due to digitalisation and the emergence of many fintech firms providing alternative services.

The report further reveals that Southeast Asian banks’ income from card transactions and fees are facing risk from free payments. The banks are at a risk to lose around 9.6 percent of the income during the same period. Also, payments made through virtual wallets or mobile apps put 3.1 percent of the bank’s revenue at risk.

With regard to the possibility of banks in Southeast Asia losing billions in payment revenue, Divyesh Vithlani, head of Accenture’s financial services practice in Asean told the media, “The world of instant, invisible and free payments is here to stay, squeezing margins further on a business that was already feeling a lot of pressure from new competition, particularly in Southeast Asia with the proliferation of ewallets.

“As payments modernisation has already made a good headway in Asean, with the introduction of instant payment schemes in many countries, revenue from the consumer space is already low or near zero, except in the cards space, so the push to find alternate sources of revenue and optimise costs is already an immediate concern here.”

A report by global management consultancy Bain and Company, Google, and Singapore state investor Temasek revealed that online banking services in Southeast Asia could generate around $38 billion in revenue by 2025.

If the report’s estimation comes true, it will mark a growth rate between 245 percent and 445 percent from the $11 billion revenue currently generated by digital financial services.