Guide to enabling local collections in ASEAN for PSPs and institutions

Southeast Asia is a highly fragmented region with different regulations, rails, and spending behaviour sharing the same regional label. This makes go-to-market efforts difficult for PSPs and institutions especially those looking to offer capabilities that make cross-border transactions as seamless as possible for locals.

Take, for example, a global PSP or bank looking to offer merchant collection services across Malaysia, Indonesia, Vietnam, the Philippines, and Singapore.

That's five different sets of currencies, licensing regimes, banking relationships, and payer preferences to support, for every merchant client onboarded into the region. The institution isn't building "an ASEAN offering"; it's building five distinct market capabilities that happen to sit next to each other on the map.

This fragmentation problem is a big reason why institutions underestimate the cost and complexity of standing up reliable collection coverage across the region.  

To get a better sense of the scale, we've broken down the fragmentation into five key areas to look out for.

1. Payment Rails: No single regional payment system

Every ASEAN market has built their own set of real-time payment rails:

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Each has its own integration standard, settlement timing, and local partner ecosystem. Institutions offering collections across multiple markets must build and certify separate integrations for each rail, multiplied across every merchant vertical they serve, or fall back on slower, costlier cross-border wire transfers, pushed down to merchants and their end customers.

Wire transfers carry an additional cost for an institution's platform economics: the drop-off that comes with asking an end payer to use a more troublesome or unfamiliar payment method reflects directly on the merchant's conversion rates, and therefore on the institution's value proposition.

2. Regulations: One license is not enough

Each market regulates money movement separately. Key differences include:

• Licensing regimes
• Know Your Business (KYB) requirements
• Reporting obligations
• Rules on who is permitted to hold and move money locally

A license held in Singapore doesn't automatically extend to VND collections in Vietnam or IDR flows in Indonesia.

For an institution, this means either pursuing local licensing market by market, a multi-year undertaking, or managing a patchwork of local partners just to collect locally, each adding a layer of counterparty risk, commercial negotiation, and operational oversight to the stack.

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3. Convertibility: Not every currency moves freely

Some ASEAN currencies, notably the Indonesian rupiah (IDR) , Vietnamese dong (VND) , and to a lesser extent the Philippine peso and Thai baht, carry capital controls, restricted convertibility, or repatriation rules that don't apply to majors like SGD or USD.

Funds collected locally in these currencies can't always be freely and instantly converted and moved out of the country.  

For an institution running treasury across many merchant clients, this creates real balance-sheet exposure: cash trapped onshore across multiple entities, unpredictable FX conversion timing at scale, and pressure to accept unfavourable rates just to unwind positions quickly when a merchant needs repatriation.

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4. Operational compounding: Fragmentation multiplies

When an institution operates across three, four, five markets on behalf of many merchant clients at once, the operational load multiplies: multiple bank accounts to reconcile, FX exposures to hedge across a growing client book, compliance calendars to track per licence, and support relationships to manage, each with its own quirks.

An operations and treasury function built to run one market's collection infrastructure doesn't scale linearly. Reconciliation, risk management, and regulatory reporting compound with every additional market and every additional client onboarded. Maintaining in-house ASEAN infrastructure across multiple markets become an intensive multi-year, multi-license commitment.

The M-DAQ Approach

Looking at the region's fragmentation, Wallex by M-DAQ is built to give institutions and PSPs a unified gateway into ASEAN, rather than requiring them to build one market at a time. One integration provides access to collection, FX conversion, and payout capabilities across the region's six key currencies: SGD, MYR, IDR, THB, PHP, and VND.

This coverage is backed by regulated infrastructure, not just partnerships: M-DAQ holds payment licences across ASEAN, including its own local payments infrastructure in Malaysia, Indonesia, and, most recently, Vietnam, giving direct access to VND collection and payout rails.

For institutions, the result is a single point of integration, one API, and one FX and compliance partner standing behind six markets, infrastructure they can extend to their own merchant clients without carrying the licensing, banking, and treasury burden themselves.

FAQs:

Can a foreign PSP hold IDR or VND onshore?

Generally, no (not directly, without a local presence).

• IDR: Offshore-to-offshore IDR transactions are illegal, and physical FX must be backed by trade documentation. A foreign PSP needs either its own Indonesian legal entity + PJP license, or a partnership with a licensed onshore bank/PJP that holds the IDR on its behalf via a collection/virtual account.

• VND: VND cannot be traded or held offshore at all, it's non-convertible outside Vietnam. A foreign PSP must route VND collections through a locally licensed bank or payment intermediary that holds the VND account onshore, then convert and repatriate FX under documented purpose (trade vs. capital account rules apply).

Bottom line: local bank/licensed-partner rails, not direct offshore holding, is the standard model for both currencies.

How long does it take to get a payments license in Indonesia?

Bank Indonesia can take up to 220 working days (~10–11 months) to process a PJP (Penyedia Jasa Pembayaran) license application. Once granted, the licensee then has 120 business days to actually launch operations. All-in, realistic timeline from submission to live operation is roughly 10–14 months, plus pre-application prep (incorporation, capital, systems readiness).

Who offers collections accounts in Asian currencies to foreign PSPs and their merchants?

Wallex by M-DAQ provides collection virtual accounts spanning ASEAN's key currencies (MYR, IDR, VND, PHP, and SGD), each settled through the relevant domestic payment network (BI-FAST, SKN, and RTGS for IDR; DuitNow, IBG, and RENTAS for MYR; NAPAS for VND).  

This sits alongside broader coverage of G10 and other major global currencies, giving businesses a single platform to collect locally and settle globally.

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