From Speed to Trust in Digital Payments
Source details
- Canonical URL
- From Speed to Trust in Digital Payments
Other formats
Bibliographic details
- Authors: SETHAPUT SUTHIWARTNARUEPUT
- Published: August 18, 2026
Overview
- Asia’s digital finance journey has reached an inflection point: the first phase emphasized moving beyond card-based systems and building out digital infrastructure at scale; the next phase must focus on trust and resilience.
- Key empirical highlights:
- Malaysia’s DuitNow has become a nationwide standard.
- Indonesia’s QRIS connects over 30 million merchants.
- Thailand’s PromptPay handles over 75 million transactions daily and reaches more than 70 percent of the population.
- The PromptPay–PayNow link between Thailand and Singapore was the world’s first cross-border fast-payment connection, allowing instant transfers using only a cell phone number.
- The Reserve Bank of India and four central banks in the Association of Southeast Asian Nations are working to create a network called Nexus, which will allow any single payment system to link to all the others.
Return to basics: trust and resilience
- Core argument:
- Regardless of technological sophistication, the fundamentals of money remain: a unit of account, a means of payment, and mechanisms to transfer that means of payment securely and quickly.
- Underlying these technical elements is trust: belief that purchasing power is preserved, transfers execute as promised, and different forms of money trade at par.
- Two dimensions of trust:
- Ordinary functionality: systems work in normal times.
- Resilience in failure: how systems behave when a platform fails, a provider becomes insolvent, or a cyberattack disrupts operations.
- Lessons from past crises:
- The 2008 financial crisis demonstrated that technology does not restore stability by itself; central banks restored confidence by providing liquidity.
- Three complementary elements required for responsible digital innovation:
- Robust technology that supports interoperability and security.
- Aligned economic incentives to make responsible behavior profitable and ensure scalability, sustainability, and inclusiveness.
- Clear legal and regulatory frameworks that define rights and obligations, allocate liability, and provide guardrails when things go wrong.
- Risks of missing elements:
- Technology without aligned incentives can produce a race to the bottom, underinvestment in fraud prevention or resilience.
- Incentives without legal foundations produce cooperation that unravels under stress.
Applied framework: three current issues in digital finance in Asia
- 1) Fraud
- Problem statement:
- Speed, low cost, and finality make systems attractive to scammers who impersonate officials and pressure victims to transfer money immediately; payments are often irreversible.
- Cross-border linkages add complexity around anti–money laundering, sanctions screening, and fraud.
- Framework application:
- Technology: embed “safety by design” — real-time risk scoring, confirmation of payee, enhanced authentication for unusual patterns.
- Economic incentives: align liability sharing, improve know-your-customer standards, and adopt pricing that rewards secure behavior so those best positioned to prevent fraud have the strongest reason to do so.
- Legal/regulatory: clarify responsibilities across participants and borders and create mechanisms for coordinated response, including protocols for regulatory agencies to work together on cross-border fraud.
- 2) Tokenized money
- Problem statement:
- Distributed ledger technology promises programmability and efficiency, but confidence in privately issued “stable” tokens can evaporate when backing is weak or redemption rights unclear.
- The collapse of the Terra-Luna cryptocurrency ecosystem in 2022 wiped out tens of billions of dollars in value in a matter of days, illustrating fragility when fundamentals are neglected.
- Framework application:
- Legal: establish clear legal claims and robust redemption rights.
- Transparency: ensure transparent backing.
- Economic incentives and regulation: discourage excessive risk taking; prevent issuers from privatizing gains while socializing losses; design regulation to address what happens when a token breaks par and confidence evaporates.
- Governance: build guardrails and accountability from the start, not added later.
- 3) Data-driven finance
- Problem statement:
- Open banking can expand consumer choice, increase competition, and improve access to credit, but long complex consent forms leave consumers without real control if they lack tools, understanding, and bargaining power.
- Framework application:
- Technology: enable secure data sharing.
- Economic incentives: encourage meaningful participation by banks and fintechs in data sharing.
- Legal: provide simple enforceable rights and real consequences for misuse so consent is meaningful rather than a box-checking exercise.
Policy implications and recommendations
- Design digital payment systems with a triad approach: technology, incentives, and law/regulation must be developed in tandem.
- Embed “safety by design” features in payment technology (real-time risk scoring, confirmation of payee, enhanced authentication).
- Align economic incentives through liability sharing, pricing that rewards security, and stronger know-your-customer standards.
- Clarify legal liability and regulatory responsibilities, including cross-border coordination protocols for fraud, anti–money laundering, and sanctions screening.
- For tokenization, require clear legal claims, robust redemption rights, transparent backing, and regulatory designs that predefine outcomes if a token breaks par.
- For data-driven finance, ensure consent regimes are backed by simple enforceable rights, consumer tools, and consequences for misuse to make data sharing genuinely meaningful.
From Speed to Trust in Digital Payments, SETHAPUT SUTHIWARTNARUEPUT, September 2026.
Content in this bundle
- From Speed to Trust in Digital Payments