Diverse Payment Needs Shape Southeast Asian E-commerce
Retailers must integrate local payment rails as the regional online market moves toward a US$400 billion valuation by 2031.
Updated on Oct. 15, 2026 in Retail
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Southeast Asia's e-commerce market is forecast to reach US$400 billion by 2031, growing from a US$197 billion valuation in 2025. Major platforms saw significant momentum in early 2026, though business leaders express concerns about their current infrastructure's ability to support future payment complexities.
Why it matters
Merchants must navigate highly fragmented payment preferences across regional markets, where successful conversion now requires specialized local infrastructure. Most business leaders recognize this operational gap, yet few believe their systems are prepared for the next decade of demand.
Major e-commerce platforms grew 33% year-on-year in Q1 2026, with quarterly net merchandise value reaching US$39 billion compared to US$29 billion in the prior period. While VietQR transaction value surged 151% in 2025, regional payment needs remain diverse across markets like Singapore and Vietnam.
The players
Xendit
A payment infrastructure provider that specializes in processing diverse local digital payments for Southeast Asian businesses.
Shopee
A major Southeast Asian e-commerce marketplace that competes for volume across multiple regional markets.
Lazada
An international e-commerce platform that operates as a primary retail channel for merchants across Southeast Asia.
TikTok Shop
A social commerce platform that integrates retail features directly into a short-form video application.
The details
Operators are shifting strategy from generic payment gateways to direct connections with local payment rails to handle market-specific checkout requirements. These systems typically route transactions through regional service providers to clear locally, rather than relying on global processors. As market share for cash-on-delivery continues to decline, retailers are prioritizing integration with local account-to-account and QR-based systems.
Timeline
2019: Cash-on-delivery accounted for approximately 50% of regional transactions.
2025: Southeast Asia reached a US$197 billion online market value.
Q1 2026: Combined growth for Shopee, Lazada, and TikTok Shop reached 33%.
2027: AI agents are expected to complete their first consumer purchases.
2031: The e-commerce market is projected to reach US$400 billion.
Market Landscape
This development follows a documented trend where regional payment preferences shift from cash-on-delivery to digitized account-to-account transfers. The findings mark a departure from previous reliance on global credit cards as the primary standard for online retail transactions.
Retailers should audit their current checkout infrastructure to ensure it supports local QR and account-to-account methods rather than relying solely on global card schemes. Managing these direct connections is now essential to maintaining competitive conversion rates across disparate regional markets.
The takeaway
The rapid fragmentation of local payment rails means that relying on a single, standardized payment provider likely limits your market reach. Review your current checkout performance metrics by specific country to determine if switching to a localized payment aggregator will improve your regional conversion.
Further reading
For more on industry shifts in global markets, see our coverage in Retail.
Source note: This article includes information reported by Fintech Singapore.
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