QR Diplomacy: Chinese Payment Companies’ Expansion in Southeast Asia

Southeast Asia has emerged as a critical emerging market for digital payments, with Chinese payment companies playing a leading role in shaping the region’s financial landscape. As economies across the region digitalize their financial ecosystems, several key markets are demonstrating openness to China-backed payment companies. For these companies, the region offers a comparatively friendly political climate, an evolving regulatory landscape and a quickly growing user base, providing Chinese payment companies the space to expand. At the same time, amid slowing domestic growth, China’s government has sought to encourage companies to “go global” through policy support and incentives.  

The convergence of factors drawing payment providers to the region and driving Chinese companies to seek new markets has made Southeast Asia a promising market for investment by Chinese payment companies.  

Chinese Payment Companies “Going Global”

Chinese payment providers’ expansion into Southeast Asia has been propelled by a combination of policy, macroeconomic and industry-specific pressures from within China itself. To maintain stable financial flows to its companies overseas, Chinese financial institutions have sought to expand the use of the renminbi (RMB) in cross-border transactions. These efforts have been backed by institutions like the Cross-Border Interbank Payment System (CIPS), a global clearing and settlement system supported by the People’s Bank of China (PBOC). This financial push is intertwined with the Digital Silk Road (the technology arm of the Belt and Road Initiative), which focuses on building digital infrastructure, including e-commerce and payment systems, in “Belt and Road” countries.  

In this vein, China’s government actively negotiates diplomatic agreements to support payments. Diplomatic visits by Chinese leaders to countries in Southeast Asia often coincide with the signing of payment interoperability agreements. For example, soon after Chinese President Xi Jinping’s state visit to Vietnam, China UnionPay and the National Payment Corporation of Vietnam agreed to reciprocal QR code acceptance. Similarly, following Chinese Premier Li Qiang’s meeting with Indonesian President Prabowo Subianto, China and Indonesia signed a memorandum of understanding on expanding the use of each country’s local currencies in bilateral cross-border transactions. Even on the local level, governments have implemented policies encouraging RMB internationalization. Shanghai’s municipal government specifically has facilitated cross-border payments using RMB by piloting blockchain technology in cross-border payments and expanding CIPS coverage.  

Further, domestic factors have pushed China’s payment companies to seek new markets overseas where they can expand and innovate. China’s domestic digital payments market is mature and mostly saturated. With an 86% mobile payment penetration rate and a highly mature domestic market dominated by two major providers, China’s payment companies face limited growth opportunities at home. Establishing a presence in Southeast Asia gives Chinese payment companies room to expand and build their international reputation, testing their products in the region’s diverse markets before expanding to even larger economies. 

Market Landscape of Digital Payments in Southeast Asia

Southeast Asia offers a set of structural and behavioral conditions that make it well-suited for Chinese payment companies. The region is mobile-first, with a digitally fluent population that began using digital payments through QR codes rather than cards. In countries like Indonesia, Vietnam and the Philippines, large segments remain underbanked, and without widespread access to traditional banking, QR-based systems that operate on smartphones and support microtransactions provide a more accessible and scalable solution. 

This aligns closely with how China’s domestic payment ecosystem evolved. Chinese companies do not have to change user behavior when they are entering markets where the consumer experience is already compatible with their systems. This congruence reduces barriers to entry and increases the likelihood of uptake. 

Beyond that, the commercial logic is also compelling. Chinese e-commerce platforms have built a strong presence across the region early on. Lazada, Shopee, and TikTok Shop have entrenched Chinese sellers in Southeast Asia’s digital retail economy. Cross-border trade between China and the region continues to grow. The ability to settle payments quickly and with less friction gives Chinese platforms and their financial partners a strategic advantage. 

Regulatory conditions are also relatively supportive. Real-time payment systems like PayNow in Singapore, DuitNow in Malaysia and PromptPay in Thailand have laid the foundation for interoperability and cross-border payments. Each country has its own regulatory framework, but the direction is broadly consistent in encouraging financial inclusion and reducing costs. This creates space for Chinese payment providers to integrate and expand, often in partnership with local institutions. 

More importantly, Southeast Asian countries by and large maintain a position of strategic non-alignment. This gives Chinese firms more room to operate than they would have in the United States, EU or Japan. It also provides a testing ground for Chinese payment standards that can be refined and scaled in other parts of the world. 

For Chinese payment companies, Southeast Asia offers growth, regulatory space and political access. For Southeast Asian markets, these firms bring innovation that drives national agendas, making the benefits clear for both sides.  

Conclusion

Chinese payment companies’ entry into Southeast Asian markets helps close infrastructure gaps, expand access to financial services and support national digital agendas. Countries in the region also remain open to Western standards, with American, European and Japanese payment providers still highly competitive. Remaining open to players from around the world gives Southeast Asian countries the flexibility to adopt interoperable systems that operate across regions. The result is a more connected, inclusive and resilient financial system that strengthens local economies and positions them to integrate into the wider digital economy across both East and West. Nonetheless, payment companies should stay aware of digital payment trends in this market to ensure interoperability and meet customers’ rapidly evolving needs.