With so many shopping apps available, merchants and platforms now find themselves in a fiercer competition than before. Before the pandemic, most brands were slowly building their online stores. However, when the pandemic enforced global lockdowns, the demand for such apps increased so much in recent times.

IF YOU WANT TO INCREASE SALES, IMPROVE YOUR CHECKOUT EXPERIENCE, SAYS STUDY

Aaron Raj | 8 September, 2021

In fact, Google’s SEA e-conomy report in 2021 stated that 8 out of 10 of SEA’s internet users are digital consumers. The report also indicates that 90% of Thai, 81% of Malaysian, and 71% of Vietnamese internet users have had an experience of shopping online. As online shopping becomes the norm, the market itself is predicted to reach between US$ 700 billion and US$ 1 trillion by 2030.

Today, shopping apps sell almost anything. From clothing to services to even cars. But the demand from consumers is not just for more products but for a better and seamless experience when using shopping apps and platforms.

This includes the entire experience on the app from product details to the payment checkouts. Integration is key in almost all apps today, especially when it comes to payment systems. The more options and simplicity an app offers to customers, the likelier they are to return for more purchases in the future.

Innovating the perfect shopping app experience

Paul Harapin, Stripe APAC Revenue Growth Lead

According to Paul Harapin, APAC Revenue Growth Lead at Stripe, brand loyalty is heavily practiced in the region. When customers go online, the engagement shopping apps give them needs to be fluent and seamless.

“25% of customers abandon their sales at checkout because organizations don’t focus enough on customer experience at the point of their excitement to purchase something. If there are hurdles on shopping apps, like too many questions, navigation issues, they will move away. We are helping our clients improve their customer experience especially when it comes to the checkout experience,” said Paul.

He added that organizations are adopting technology much faster now. Most companies have accelerated dramatically by bringing on a decade’s worth of transfor

mation with 12 months. He also pointed out that some companies posted an increase of over 47% in revenues this year by improving their customer and digital experience on their shopping apps.

Customers want more payment options

At the same time, the delivery of new payment methods is becoming crucial for shopping apps. Today, shoppers want to make payments beyond the traditional credit or debit card and online banking methods. Digital payment methods like e-Wallets and buy now pay later (BNPL) transactions are becoming increasingly popular among certain customer demographics on shopping apps.

“Customers want choice. We worked with various e-Wallets and BNPL players in Southeast Asia. Merchants report that BNPL customers are not only bringing in larger sales but also sales in larger basket sizes. The advent of BNPL in Stripe has enabled retailers to not just sell more, but also bigger payments,” explained Paul.

Interestingly, CNBC recently reported that Stripe also isn’t ruling out accepting crypto currency as a method of payment in the future. For now, the market for crypto payments is still in its infancy stage but Paul believes that this can change soon, given the growing interest in crypto payments. And Stripe is also no stranger to accepting crypto payments as they had previously offered bitcoin payments but ended the support in 2018.

The future of shopping apps is all about the experience

(Photo by Matthew Hatcher / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

“In 2022, the customer experience will be the center of focus for most e-Commerce providers. Shopping apps will want to capture customers the moment they start the app. Because if they can’t capture the customer at that moment, it is only going to be harder,” Paul highlighted.

He also pointed out that innovative organizations may try new methods. This includes engaging the creator economy which will become great access to market for retail environments. The creators can leverage their brand and make content that only drives revenue for themselves but also other retailers.

“Over the next 12 to 24 months, you will see more merchants looking to access different ways to connect to their customers and different advertising brand awareness methods like via social media or shoppertainment, to access the audience that they want to sell to. The great thing about the online market is that you can be very targeted to a specific segment. Our customers want to know how they can expand their business rapidly without having to spend months accessing local regulations and understanding requirements of each country, especially with regulations.”

And this is where e-Commerce players want to have as little complexity as they can and focus more on their customers. Paul added that they will want to focus on their customers and let tech providers like Stripe worry about the back end for them, especially as they look to capture global markets at a lower cost footprint.

For example, Stripe recently announced it has entered into an agreement to acquire Recko, a leading provider of payments reconciliation software for internet businesses. Payments reconciliation is an accounting process that compares two or more sets of records—for example, a company’s internal sales log and their external bank statement—to confirm accuracy.

Finance teams perform reconciliation to uncover discrepancies, avoid incorrect accounting, and understand a company’s financial health at a point in time.

With that, the market and opportunities for shopping apps and e-Commerce players in the region are only going to get bigger and more competitive in the future. For now, businesses want to be able to retain their customers, keep them satisfied and provide them a seamless experience. Simply put, they’ll focus on their customers and leave the backend issues to service providers like Stripe.

The post How will shopping apps capture SEA customers in 2022? appeared first on Tech Wire Asia.

With a population of 1.4 billion, the subcontinent is home to some of the largest e-Commerce companies in the world as well. Amazon, Flipkart, and Grofers India are some of the biggest e-Commerce players in the country that continue to see positive growth, especially during the festive season.

INDIA LEADS REAL-TIME PAYMENTS MARKET AFTER CHINA AND SOUTH KOREA

Jamilah Lim | 23 August, 2021

In fact, the festive season in India saw 60% of consumers using digital payments multiple times per week according to a study from YouGov and ACI Worldwide. The frequency in digital payments usage has also increased 57% from the previous year, with only 6% of respondents in the study stating they have no intention to use digital payments during the festive season.

The latest data from The National Payments Corporation of India (NPCI) showed that UPI generated 3.65 billion transactions worth INR 6.54 trillion in September, breaking all previous records both in transaction volume and value. Monthly transactions on the UPI platform have also nearly doubled since a year ago when there were 1.8 billion transactions worth INR 3.29 trillion monthly.

Statistics from Statista Research Department showed that in June 2021, providers of UPI in India recorded a total of 2.8 billion digital payment transactions worth over five trillion Indian rupees. Out of the 2.8 billion transactions, Walmart subsidiary PhonePe had a share of 46% and GooglePay a share of 35%. The third big player is Paytm with a share of nearly 12%.

“It is encouraging to see the heightened trust in digital payments by Indian consumers, which is also corroborated by the month-on-month growth in transaction volumes, increased frequency of usage among consumers, and use of digital payments for higher-value payments. This reinforces the fact that digital payments are becoming an even more integral part of our daily lives, as India continues to shine as a global leader in real-time, digital payments,” said Ankur Saxena, country leader, South Asia, ACI Worldwide.

Why are digital payments in India popular?

Digital payments in India has seen innovation in recent times, with the latest being the government’s launch of e-RUPI several months ago. Until typical digital payments, however, it comes in the form of a prepaid e-voucher from UPI.

India’s UPI illustrates how an enabling policy framework and supportive regulation can create the infrastructure needed for swift adoption. Government institutions, particularly the central bank, encouraged the use of tools such as QR codes for merchants and radio-frequency identification (RFID) tags for toll gates.

ACI and YouGov’s findings also showed that concerns over digital payments fraud have decreased, with 24% identifying it as a concern compared to 30% last year. In line with this trend, digital payments are considered the most secure way to pay for one-third (33%) of respondents, up from one quarter (24%) in 2020, and just behind cash-on-delivery (35%).

While the study showed that 50% of those preferring digital payment methods to be young adults, between the age of 24 to 35, the over-45 age group continued to divide their payment preferences between card payments and digital payments almost equally.

Judging by those figures, it’s not surprising that 57% continue to use digital payments for groceries and essentials, which remains the most common category for digital payment purchases. Nearly half of those surveyed used digital payments for apparel (48%) and electronics (47%), with other popular categories including household appliances (43%) and homewares (41%).

70% of respondents also said that with the greater dependence on online shopping that developed during pandemic-related restrictions, they now prefer online to in-store shopping. However, 60% also said they look forward to in-person shopping if adequate precautions – including social distancing – are in place.

As such, digital payments in India will most likely only see increased adoption in the future. And with schemes like buy now pay later and e-wallet services increasing, the competition in the industry is also going to be tougher. E-commerce players are aware of this and will be doing their very best to attract more customers with more digital payment flexibilities as well.

The only question now is, will these services also be able to guarantee a secured experience for users. While there have been no major incidents reported yet of any breakdown in the digital services, payment providers and e-Commerce players need to ensure they are prepared to handle the situation if it arises.

The post Digital payments in India soar during Diwali season appeared first on Tech Wire Asia.

The COVID-19 pandemic has led to an increase in digital payments around the world. While online banking has been dominant, more users are now preferring to transact over mobile banking or e-wallets.

ASIA LEADS THE GLOBAL E-COMMERCE MARKET WITH DIGITAL PAYMENTS

Dashveenjit Kaur | 2 August, 2021

According to findings from Kaspersky’s “Mapping a secure path for the future of digital payments in APAC”, 90% of the Asian respondents have used mobile payment apps at least once in the past 12 months, confirming the fintech boom in the region. Nearly 2 in 10 of them only started using these platforms after the pandemic. In fact, the Asia Pacific (APAC) region is the largest contributor to global payments revenue, with analysts expecting the sector to exceed US$ 1 trillion revenue by 2022 or 2023.

The research studied local users’ interactions with the available online payments in the region and examined their attitudes towards them, which hold the key to understanding the factors that will further drive or stem the adoption of this technology.

For Chris Connell, Managing Director for the Asia Pacific at Kaspersky, the figures clearly indicate how consumer behaviors have changed. Tech-assisted shopping has created new opportunities for retailers while mobile devices influence shopping behaviors as well. The use of cash is no longer prioritize for hygiene reasons as well.  But with increasing digital payments, digital risks increase as well, and a lack of cybersecurity awareness is concerning.

“The surging demand for digital payments has transformed the way we transact both online and offline. Businesses are now digitalizing their operations to capture additional revenue through digital payments, while consumers are heavily reliant on it due to the ease and convenience it offers. It is clear that the demand for quick, efficient, and low-cost payment experiences will encourage further innovation in this space, and we are seeing that happening with the emergence of real-time payment rails,” commented Chris.

(Source – Kaspersky)

The Philippines logged the highest percentage of new e-cash adopters at 37%, followed by India (23%), Australia (15%), Vietnam (14%), Indonesia (13%), and Thailand (13%). The lowest number of first-time online payment users are China (5%), South Korea (9%), and Malaysia (9%).

China has been a notable leader in mobile payments in APAC. Even before the pandemic, its top local platforms, Alipay and WeChat Pay, have witnessed significant mass adoption and served as an example to follow for other Asian countries.

Adhering to social distancing was one of the reasons why digital payments are increasing despite some security concerns. However, for 29% of users, digital gateways are more secure now compared to the pre-COVID-19 era and the same percentage also appreciate the incentives and rewards providers offer.

At the same time, cybersecurity awareness is slowly increasing among some users. For example 48% of users is high as they fear they will lose money online while another 41% are afraid of storing their financial data online. Almost 4 in 10 also revealed they do not trust the security of these platforms. More than a quarter also find this technology too troublesome and requires many passwords or questions (26%), while 25% confessed their personal devices are not secure enough.

“To drive a secured digital economy forward, it is important for us to know the pain points of our users and identify the loopholes that we need to address urgently. It is a welcome finding that the public is aware of the risks that come with online transactions and because of this, developers and providers of mobile payment applications should now look into the cybersecurity gaps in each stage of the payment process and implement security features, or even a secure-by-design approach to fully gain the trust of the future and existing digital payment adopters,” added Connell.

During his session at the Marking the Money Movement: The Latest Financial Threats in APAC, Cornell suggested the following steps when using digital payment platforms on any device:

• Be wary of fake communications and adopt a cautious stance when it comes to handing over sensitive information. Do not readily share private or confidential information online, especially when it comes to requests for financial information and payment details.
• Use own devices and network when making payments online. Public computers and networks may have spyware running on them recording everything typed on the keyboards, or the Internet connection has been intercepted by criminals waiting to launch an attack.
• Never share passwords, PIN numbers, or one-time passwords with anyone. While it may seem convenient, or a good idea, these provide an entryway for cybercriminals to trick users into revealing personal information to collect bank credentials.
• Adopting a holistic solution of security products and practical steps can minimize the risk of falling victim to threats and keeping your financial information safe. Utilize reliable security solutions for comprehensive protection from a wide range of threats to help check the authenticity of websites of banks, payment systems, and online stores visited, as well as establish a secure connection.

At the end of the day, users need to have cybersecurity awareness and be vigilant when using digital payments. After all, humans are the weakest link whenever it comes to any cyberattack or breaches. The same applies for digital payment adoption as well. Taking security lightly when using digital payment platforms may just cause more problems in the future.

The post Increasing cybersecurity awareness vital as digital payments become mainstream in APAC appeared first on Tech Wire Asia.

According to a Reuters report, Standard Chartered announced a 10-year fintech partnership with Atome Financial to help it grab a piece of the booming BNPL market in Asia, that has been thriving in the midst of the pandemic.

Apart from Atome, some of the biggest BNPL players in the Asia Pacific region include Hoolah, GrabPay, Akulaku, Fave, and several others. While there have been critics of BNPL, especially due to its lack of regulatory checks and requirements for granting installment payments, the services have been proven to be successful in the region during these uncertain financial times.

EMBEDDED FINANCE ENSURES BNPL IS NOT MAKING BANKS IRRELEVANT

Aaron Raj | 24 September, 2021

As the first major bank to unveil a significant foray within the sector in Asia, Standard Chartered is making an undisclosed equity investment in Atome Financial, which operates the Atome platform in markets including Southeast Asia, and Indonesian digital lending platform Kredit Pintar.

In a statement, the bank said the partnership will initially include BNPL services, targeted to roll out in Indonesia, Malaysia, Singapore, and Vietnam in the next few months, and later expand to include digital lending products.

The US$500 million funding will enable Atome Financial to grow and connect a wider ecosystem of merchants to a larger customer base, improving product access and financial inclusion for consumers across the region. At the same time, the bank said Atome Financial’s customers will gain access to more innovative financial services, easily accessed via their mobile devices.

For Judy Hsu, CEO, Consumer, Private and Business Banking at Standard Chartered Bank, the bank’s successful digital ventures and partnerships enable them to continue to be fearlessly innovative in disrupting ourselves to better serve their clients. “This partnership with Atome Financial allows us to be part of the rapidly growing digital consumer finance ecosystem and provides convenient and relevant digital financial products to complement and enrich clients’ digital lives,” said Judy.

The bank’s deep knowledge of Asia’s markets coupled with Atome Financial’s experience in digital consumer finance will allow them to reach even more customers and drive greater financial participation of those underserved and underbanked.

Jefferson Chen, the Co-Founder, Group Chairman and CEO of Advance Intelligence Group, not to mention the CEO of Atome Financial, commented that  “By providing consumers with easier, simpler, and more convenient access to a full suite of digital-first financial services, we can accelerate broader financial inclusion across both developed and emerging markets in Asia.”

Jefferson added that the partnership with Standard Chartered will allow them to expand their merchant network and help retailers increase their customer base and basket sizes, contributing to economic growth across the region.

More banks may consider BNPL after Atome

Meanwhile, Kanv Pandit, Group Managing Director, APAC, Banking Solutions, FIS believes banks are actively looking for ways to tap into the rapidly growing BNPL market, or they risk being left out of a major new market opportunity.

As BNPL’s global e-commerce market share is expected to double to 4.2% by 2024, in Singapore it is the fastest growing online payment method, on track to represent 13% of all e-commerce sales within the same period. He added that Some banks choose to launch their own BNPL offerings, either through the extension of their own credit card offerings or directly to merchants, Citibank being an example.

“In the case of the SC-Atome tie-up, this is a good example of “banking-as-a-service” in play, where a bank offers their platform to the BNPL provider to deliver an expanded set of financial products to the consumer. With its own set of benefits, we can expect to see more of such tie-ups and investments,” explained Kanv.

Kanv also pointed out that banks are looking to take advantage of the current conducive regulatory environment that has allowed BNPL services to flourish. This will also enable banks to leapfrog the product gap they have via such partnerships.

“On the BNPL providers’ end, they are rapidly seeking opportunities to expand their portfolio and leverage strategic partners to differentiate themselves from other players, creating more revenue models and improving their risk models at the same time. Banks can also offer them valuable market insights, given the wealth of data they hold,” clarified Kanv.

The reality is, with BNPL seemingly the preferred method of payment by consumers, banks may eventually just have to follow suit and give in to their demands if they want to remain competitive in the industry and remain relevant.

The post Standard Chartered invests US$500 million in BNPL trailblazer Atome appeared first on Tech Wire Asia.

Though traditionally restricted to travel-related expenditures, businesses spending via corporate cards now presents a budding opportunity worth US$500 billion in India. This seems to be a trend in direct contrast to the country’s low consumer credit card penetration rate, as compared to there being close to a billion debit cards in use in India today.

Among startups and small and medium enterprises (SMEs) in India, the growing popularity of corporate digital payments saw corporate cards and payments company EnKash issuing more than 200,000 corporate cards between February 2020 and July 2021, with the company seeing accelerated growth in transaction values.

“EnKash’s growth is aligned with the growth in digitization of business expenses, which is currently witnessing a snowball effect worldwide with multiple unicorns emerging in this space. This global trend, along with Covid-19, has triggered an unprecedented demand for and dependence on corporate cards in India,” said EnKash Co-founder Naveen Bindal.

This strong trend has served as a beacon for investors, with EnKash having witnessed a lot of inbound interests from international investors, and having so far raised over US$3 million in a Series A funding round.

Another example of the worldwide growth in interest for corporate digital payments would be the Series C funding round of New York-based corporate credit card company Ramp, where the company is aiming to raise US$300 million. The trend seems supported by Ramp having seen total card customers increase five-fold in 2021, while transaction volumes have increased three-fold since April 2021.

Back in India, HDFC bank, which had seen an embargo from the Reserve Bank of India on issuing new credit cards, is looking forward to recapturing market share, and more, by going back to its 300,000 cards per month issuance rate with the embargo having been lifted at the end of August, with a goal of issuing 500,000 cards per month starting February 2022.

There also remains a portion of the market that had been left in need following the exit of New York-based Citigroup from India in April, citing a lack of scale needed to compete. Citibank had struggled to get a bigger share of the retail banking industry, with most of the bank’s profits from India in the 2020 financial year coming from other income such as brokerage and commission.

“We believe our capital, investment dollars, and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia,” said Citigroup’s global chief executive officer Jane Fraser.

However, joining in the brawl for space in the credit card scene in India is DBS Bank of Singapore through its wholly-owned subsidiary DBS Bank India Limited with a plan to launch a co-branded credit card along with Bajaj Finance, and subsequently a proprietary card “over a period of two to three quarters,” according to The New Indian Express.

A pandemic and the credit card industry

The advent of the Covid-19 pandemic has truly accelerated the uptake of digital payments, especially in India. Although the country remains largely rural and hence cash-centric, digital payments there have surged in both volume and value far beyond the expectations of the policy-makers that had created the enabling environment.

This followed the announcement of India’s e-RUPI digital payment system, which is a form of pre-paid e-voucher from Unified Payments Interface, developed by the National Payments Corporation of India.

With an enabling policy framework and supportive regulation, the infrastructure needed for rapid adoption was created. With government institutions encouraging tools such as QR codes for merchants and radio-frequency identification (RFID) tags for toll gates, India saw a prevalence of low-value payments, which in turn has led to the highest real-time transaction volumes in the world.

However, the pandemic and its effects should also serve as a sign of caution. As with all times of a stressed economy, the likelihood of a loan being defaulted upon increases as navigating the economy becomes harder.

India’s private sector banks saw an increase in gross non-performing assets (NPAs) from 2.01% in June 2020 to 3.32% in June 2021 within the retail and the micro, small and medium enterprises (MSMEs) sector, with the most noticeable surge coming from credit card loans. Public sector banks saw gross NPAs move from 5.99% to 7.28% within the same time frame.

Ultimately, the growth of credit card usage and adoption in India, both for consumers and businesses, marks a step forward for the nation in adopting digital payments. However, this can also be a cause for concern and stress, especially for the businesses and consumers themselves, as credit debt can be a difficult thing to get rid of, especially when times are tough.

The post Corporate digital payments are booming in India. Don’t get left behind. appeared first on Tech Wire Asia.

Naturally, online sales have rocketed, be it for goods or digital services. The paradigm shift to digital ways of making payment has deeply impacted the way many companies do business. 

Not all digital transactions use real-time payments

A recent report by EIU (The Economist Intelligence Unit) explored the digital payments revolution around the world and found that India is leading the real-time payments market, followed by China and South Korea. In terms of the mobile payment market, China leads instead, followed by India.

Whilst all digital payments rely on technology, not all of them are instantaneous like real-time payments. Real-time payments are increasingly popular, with a report recently showing that most Malaysians prefer real-time payments over others, losing only to cash payments.

Real-time payments (RTP) are essentially digital payments that can be initiated and completed instantaneously or near instantaneously. This is different from, say, credit or debit card payments that will take longer to process as they go through layers of queries and approvals.

India’s UPI driving digital payment growth

According to the report, India offers a prime example of the shift to modernize payments systems in order to keep commerce flowing and sustain economic growth. Although the country remains largely rural and therefore cash-centric, the pandemic has lifted digital payments, in terms of both volume and value, to heights far beyond the expectations of policy-makers who had created the enabling environment for their adoption. 

Recently, India announced an interesting digital payment system, called e-RUPI. It is neither a cryptocurrency nor a central bank digital currency (CBDC). It is also not a digital or e-wallet either. The digital payment actually comes in the form of a pre-paid e-voucher from UPI (Unified Payments Interface). 

India’s UPI illustrates how an enabling policy framework and supportive regulation can create the infrastructure needed for swift adoption. Government institutions, particularly the central bank, encouraged the use of tools such as QR codes for merchants and radio-frequency identification (RFID) tags for toll gates. This paved the way for India’s drive towards real-time payments, according to the EIU. 

The prevalence of low-value payments in the Indian economy has led to the highest real-time transaction volumes of this type in the world. Similar trends are visible in other developing countries, however. 

In the Philippines, the government is making a concerted effort to achieve a cash-free society by 2025 and aims to make half of its financial transactions digital by 2023. The rewards of this are numerous, most notably in terms of wider financial inclusion.

Following the success of India’s UPI, several countries are currently in the process of building instant real-time payment platforms. Brazil, for example, debuted its fast payment Platform, Pix, in late 2020. 

In early 2021, Saudi Arabia unveiled its new version of the instant-payments platform, Sarie, which facilitates a quick transfer of funds using various methods of identification, including mobile numbers and email addresses.

Some takeaways from the EIU include:

• Payments providers must create additional capacity to prepare for greater demand for digital payments services. They must also prepare for the rising costs and complexities of compliance with regulatory requirements such as data localization. 
• Firms and service providers in adjacent areas must rapidly transform their businesses to reap maximum benefits. Their strategy should include actions to improve the interoperability of their digital platforms and to deploy APIs to leverage embedded payments.
• Payments providers must create additional capacity to prepare for greater demand for digital payments services. They must also prepare for the rising costs and complexities of compliance with regulatory requirements such as data localization. 

Ultimately, the EIU suggests that governments in countries with a low level of digitalization must appreciate that policy choice and public investment are keys to the widespread adoption of digital payments. This can lead to better outcomes if they are well formulated and put into practice. The positive impact of digitalization on an economy’s growth trajectory is well documented, but this must be sustainable and equitable for all citizens.

The post India leads real-time payments market after China and South Korea appeared first on Tech Wire Asia.

According to the website, Razer Pay is an e-wallet app designed for youth and millennials to go cashless and pay for “most well-used retail and services in the [SEA] region”. The app will no longer be available from October 1st, 2021.

Customers with credit balances or gift codes may continue to use or withdraw them up until August 31st. As of writing, all new registrations, top-ups, and peer-to-peer (P2P) transfers cannot be carried out anymore.

Southeast Asia’s love for fintech

One could say that the SEA region is rather congested with fintech services. In the Asia Pacific alone, almost half of consumers prefer digital payments. Not only has consumer preference for such payments increased over the past few years, but noteworthy surges could also be seen in pandemic times. 

Countries with a large number of unbanked consumers such as the Philippines and Indonesia have particularly experienced exponential uptakes of fintech apps and products such as digital banking services and e-wallets. Enterprise-wise, many micro and small, and medium enterprises (MSME/SME) have been flocking to digital banks to secure funds as well.

The Malaysian and Singaporean fintech markets, whilst not entirely as mature as their counterparts in greater Asia, are still relatively ahead of their regional peers. In Malaysia for example, digital payments are quickly becoming the norm, coming second only to cash — the latter of which will likely not be king for long.

If there’s anything China’s e-wallet history can teach us, it is that — may the best player win. For e-wallet providers to not just survive but excel, the competition has to be kept small, and consumers have to become highly reliant on their e-wallets. There can be no compromise. 

For years now, hardly anything is paid in China with cash or card. Instead, almost everyone in cities is massively reliant on e-wallets. And this is how the two biggest players; Ant Financial’s Alipay, and Tencent’s WeChatPay, are the reigning champions in the digital payment space in China.

The great e-wallet battle

Within the Malaysian and Singaporean e-wallet spaces, multiple contenders closely vied for market share over the past few years. 

In Malaysia, there are early entrants such as Fave, Boost, and Grabpay. Soon, more joined the motley crew, including Touch ‘N Go (TNG), Maybank’s MAE, as well as China’s stalwarts Alipay and WeChatPay. 

It’s worth noting that Razer Pay was launched by Razer and its Malaysian real estate conglomerate partner Berjaya Corporation Berhad. However, a year later, the Berjaya-linked telco UMobile launched its own “multi-function” e-wallet, GoPayz. But whether that was impactful or not is anyone’s guess, although the lack of traction and news about said wallet might say something. 

In Singapore, the same brands (even from China), aside from TNG, sought to establish their presence, which did not go unnoticed by local banks. DBS Bank launched its highly popular PayLah; UOB its UOB Mighty, and OCBC has its Pay Anyone (all of which are comparable to Maybank’s MAE). 

And to complicate all that, there are your e-Commerce giants such as Shopee, Lazada, and the newest, possibly most threatening fintech player GoTo (i.e. the Gojek and Tokopedia union) that are trying to get their own customers hooked onto their own internal funding ecosystem (aka e-wallets) to pay for their online shopping.

As it is, the early history of the e-wallet battles was waged on nigh uncovered grounds. Early movers such as Boost and Fave appeared to struggle to attract customers, much more retain their loyalty, especially since these startups did not have pockets as large as say, TNG’s (which is 49% owned by Alibaba-linked Ant Financial). 

As other players entered, the scene (de)volved into a delightful, albeit short-lived carrot-dangling fest of rebates, discounts, and other goodies that customers could enjoy — at least, in Malaysia.

It seems like three years later, the e-wallet battle fatigue has set in, as leading providers like Grabpay and TNG started conservatively holding back on the goodies. Of course, this was once they’d managed to secure and retain large enough numbers of customers — and more importantly, their data.

A Razer (Pay) thin margin of opportunity?

Fast forward to 2021, we have central banks in the region working on their own sovereign currencies (CBDCs), with more forward-looking nations looking to facilitate cross-border exchanges.

Furthermore, local banks are digitalizing quickly to tap into a consumer market that’s hungry for contactless, instant payment options.

And then there’s your BNPL players (buy now pay later) too, tapping into the regional consumer debt markets.

In as little as a few years, we have seen all these coming together — deep pockets for marketing; domination of market share; possession of massive amounts of customer data, and increasingly prominent brand presences shaping the scene into something a little more coherent.

Could it be that the stiff competition Razer Pay faced gave it a, shall we say… razer thin margin of success?

After all, with intense competition from fellow e-wallet players, as well as pressure from other fintech players, it would be wise for e-wallet services that can’t do well to drop out of the competition entirely and focus on strengthening their existing portfolios. Alternatively, they could explore closing other fintech gaps to better serve the unique SEA consumer market.

Tech Wire Asia sought comments from Razer; however, our questions clarifying its decision to drop Razer Pay went unanswered.

Nevertheless, a source from inside Razer who declined to be named excitedly exclaimed through a text message that “Other [offline] e-wallets services via Razer Merchant Services [RMS] will continue to operate as usual. RMS payment gateway is still great and rocking!” 

Razer Merchant Services is a B2B provider of solutions ranging from e-Commerce, offline payment solutions, to even logistics. Meanwhile, Razer’s revenues continue to grow, whilst their team teases audiences with previews of their upcoming product, Razer Zephyr — a wearable air purifier… mask… thing. 

Clearly, within the next five years, SEA consumers are going to be incredibly spoilt for choice when it comes to not just e-wallets, but for a digital payments service. 

Whilst the e-wallet scene could be described as grossly saturated, there is always room for innovation. 

And the new window of opportunity?

Cross-border payments. 

And on that front, could UMobile’s 2019-launched GoPayz be the dark horse?

Well, that’s a game I’ll be happy to watch.

Update: Razer has reached out for clarification.

According to Li Meng Lee, CEO of Razer Fintech, “The Razer Pay e-wallet app was conceived as a testbed for Razer Fintech to better understand the e-wallet and scheme card ecosystem in Singapore and Malaysia. The app contributed a very small amount to Razer Fintech’s overall performance, with over 95% of our TPV driven by Razer Merchant Services (RMS). As part of the strategy to drive Razer Fintech’s hypergrowth ambitions in its next stage of development, Razer Fintech will sharpen its focus on RMS to position itself as a forward-thinking, merchant-focused B2B payment, solution provider.” 

According to a statement, Razer Merchant Services in H1 FY 2021, expected to grow their TPV at a double-digit percentage year-on-year, driven mainly by e-commerce marketplace purchases, food deliveries, and e-wallet top-ups.  RMS has also seen a continued strong uptick in adoption from merchants with an 89% growth year-on-year coming from the Retail, F&B, and professional services industries.

Some key licenses and network expansion include the direct acquiring license from Visa and Mastercard to commence direct card processing in Malaysia before expanding into Singapore and the Philippines. In Singapore, Razer Fintech has been granted a Major Payment Institution license from the Monetary Authority of Singapore (MAS) for domestic and cross-border money transfer and merchant acquisition services.

In Taiwan, Razer Fintech has been approved by the Financial Supervisory Commission (FSC) as an overseas payment provider for cross-border payments through a partnership with E.Sun Commercial Bank.

In the Philippines, Razer Fintech has been approved by Bangko Sentral Ng Philippines (BSP) as an Operator of a Payment System to operate merchant acquiring and payment facilitator services. Razer Fintech has also been approved by BSP as an E-money issuer to operate as a domestic and cross-border e-money transfer service.  Razer Fintech is currently operational in Thailand through the payment gateway license held via MOLAP (Razer Gold) and is in the application process with the Bank of Thailand for Razer Fintech to obtain its direct merchant acquiring a license.

The post The death of Razer Pay: Did it fail to slice through the competition? appeared first on Tech Wire Asia.

From enabling money remittance services for governmental platforms, to allowing mobile payments for websites and e-commerce apps, financial service providers have had to look again at how they can help speed up the digital transformation efforts of numerous businesses, worldwide.

In the Asia Pacific region, the events of the past two years have thrown a spotlight on the woeful digital transformation journeys of organizations in the world’s fastest growing region, and that is not limited to developing markets like Vietnam, Indonesia, and the Philippines that were emerging rapidly in the days before the pandemic. Even organizations in developed territories like Singapore, Australia, Hong Kong, and Malaysia were caught unaware by the nearly overnight need to be digital-first – whether that be embracing online productivity methods like cloud computing services or enabling alternative revenue-generating channels by providing digital payment options.

The COVID-19 crisis once again highlighted fears around the usage of cash, which had already been seeing dwindling use in recent years as many markets looked towards digital cures to power payments acceptance in brick-and-mortar retail, to allow for convenient bills payment, and in empowering online sales channels.

New payment technologies such as mobile payments, e-wallets, and contactless cards have been simplified over the years, and they are smoothening both business-to-business and business-to-customer experiences with their range and flexibility of capabilities.

These strengths are putting organizations under pressure to accept these payment innovations that go beyond traditional banking models. And as the online payment processing market continues to develop, users are demanding for additional payment features and options that will lead growth in multiple directions.

For one, users will be demanding online transaction means that will be increasingly exposed to risk of fraud, widening the risk management strategy of the company to whole new horizons, such as chargebacks for fraudulent transactions. Too many chargebacks could effectively cripple a merchant, and without the chip-based physical card authentication of credit cards, newer technologies such as biometrics and multifactor authentication need to be used to validate the identity of online purchasers and authorize their transactions.

Another critical function being demanded of new-age payments is the ability to facilitate cross-border transactions. Traditionally, national banking structures would rather avoid the complexities of enabling cross-border payments, but with digital platforms and services making the internet essentially borderless, consumers are coming to want goods and services from other countries that they may not be able to access in their own.

Hence, transnational payment systems are on the rise, trusted systems that are not bound to any single country, instead licensed by accredited bodies such as the Payment Card Industry Data Security Standards (PCI DSS) certification that governs credit card transactions, both online and off. By partnering with governments and local payment service providers, these new payment systems can maintain a secure network with strong access control measures, manage security and credit risk, and protect users’ identities as well.

Enabling cross-border transactions means being able to accept and process a variety of payment methods and currencies. E-wallet payment processing, mobile payment processing, and of course acceptance of international credit and debit cards help online merchants compete in global markets by allowing their customers to pay in their native currencies and method of choice.

Having the right payment service provider in place, with the necessary infrastructure and technical integration capacities such as applications programming interfaces (APIs) and payment gateways already on board, can go a long way towards serving the customer the digital capabilities they have to expect, including a variety of features, integrated systems that connect with other services, as well as a fast and reliable online payment process that seems virtually seamless.

Convenient, seamless, and secure payment options are what these three service providers below have in common. Let’s take a look at what sets them apart:

KIPLEPAY BY GREEN PACKET

Founded back in 2000, right in the heart of California’s Silicon Valley, Malaysia-based Green Packet Berhad (Green Packet), an international technology solutions company has been designing, and producing wireless devices, user-centered applications, and value-based services that complement the telecommunications and digital payments ecosystems.

With an industry know-how that has powered integrated solutions for over 100 clients in more than 70 countries, Green Packet offers bespoke digital financial technology solutions through its subsidiary, Kiplepay Sdn Bhd (Kiplepay). Fintech outfit Kiplepay provides solutions such as e-payment ecosystems and e-wallet services through Kiple products that will help established businesses and organisations, as well as meet the needs of underserved sectors and government-linked projects and bodies.

As a disruptive fintech player, Kiplepay has been a driving force for financial inclusion in Southeast Asia. Its kipleUNI program, in partnership with local Malaysian universities, provides a cashless means of payment on university campuses. Their kipleBiz arm extends Kiplepay’s ability business to connect businesses with end-to-end e-payment solutions. Kiplepay has also worked with Malaysian state governments to distribute funds to disadvantaged communities in poor areas.

Not only does Kiplepay enable cashless transactions with its suite of wallet-as-a-service (WAAS) for different sectors, but its ecosystem of e-wallet, payment gateway, and payment services portal have been harnessed to empower national and state government digitization goals and welfare initiatives, including for universities, small-medium enterprises, low-income groups, and underserved communities.

Read more about Kiplepay here.

STRIPE

Stripe sets its stall out as an API environment designed for developers, and therefore those looking for pre-built solutions may wish to look elsewhere. However, if an organization possesses the necessary tech chops, the company’s offering is powerful and can be adapted to individual use constrained only by the developers using it.

Complete tokenization places a layer of security between the merchant and payee, and allows easy repeat payments, as references are only ever back to the token(s), rather than to the original payment details.

This leads the way to using Stripe to manage subscription-based payments, such as membership or licensing. This is achieved by subscribing a customer to a predefined plan in the Stripe API – repeat payments are then a matter of iteration through a standard presentation of identifying keys and transactional data.

The company also offers Stripe Connect, a full-stack solution for using Stripe’s capabilities on behalf of others. This includes collecting fees for providing such a service, managing all the different types of Stripe accounts and supporting different pay-out schedules and methods.

Security is paramount in the Stripe environment, with a machine-learning engine that carries out risk evaluations of all payments. There’s the standard blacklist of unwanted cards and emails, plus a constant review process examining unusual payments. Action on flags can be configured through a user dashboard, and automated.

Learn more about Stripe’s integrated payments ecosystem.

PAYPAL

With well over 340 million active users worldwide, PayPal is one of the most recognizable brands offering payment and money remittance services anywhere in the world. With a base of operations that spans the globe, PayPal offers comprehensive payment options for individuals such as freelancers, for online merchants and platforms, as well as for SMEs and larger enterprises.

PayPal’s business services are available for organizations of all sizes, with both B2C and B2B payment options. For e-commerce purchases, customers can checkout using a unified PayPal solution that enables the customer to access a variety of payment methods from the merchant’s website, on mobile or on the web, or via the merchant’s dedicated app.

The experienced provider also supplies other options, such as accepting both card and contactless payments using QR codes, with a unique QR code generated for each transaction allowing for a speedy and contact-free transaction.

Debit or credit card payments can now be processed via PayPal’s Virtual Terminal too, which doesn’t require any specialized equipment, coding or software to accept credit and debit card payments by phone. This option saves on costs by requiring virtually no investment, and requires only an internet connection.

Learn more about the PayPal Commerce Platform.

ZIP

Since arriving in 2017, Zip has taken the payments landscape in Australia and New Zealand to new heights. Zip pioneered the interest-free loans that have become part of the ‘buy now, pay later’ phenomenon that has become the in-demand staggered payment option of late.

Zip offers flexible repayments and a six-week repayment period for its online merchants in categories ranging from clothing and lifestyle products to electronics and travel. While there are no interest charges like many BNPL options, it is vital to understand the service’s late fee schedule. For instance, in New Zealand, the purchaser will be charged NZ$8 per purchase on the day the repayment is missed, followed by NZ$8 every subsequent week that the repayment remains outstanding.

Late fees are capped at NZ$40, which is a substantial sum but still reasonable for many. Payments are automatically deducted from the preferred debit or credit card. If other payments have been made, the repayment schedule will automatically adjust, providing flexibility and ease of use.

Zip is a convenient option for those who are not financially savvy or for the growing number of young users who are averse to credit cards or store credit. It provides an easy way to shop primarily online without the risk of long-term credit card debt.

Learn more about Zip by following the link.

*Some of the companies featured on this article are commercial partners of Tech Wire Asia

The post Bridging digital payments to power the cashless economy appeared first on Tech Wire Asia.

• 32% have reduced reliance on cash, credit and debit cards

• Compared to before covid, 45% are moving towards real-time payments

It comes as no surprise that the days of cash transactions are numbered. Changing payment necessities and preferences as a result of Covid-19 seems to have brought this dramatic shift towards digital payments.

In the Asia Pacific (APAC) itself, almost half of consumers have shown a preference for digital payments. In fact, card payments are also being overtaken by digital payment options.

But not all digital payments are the same. Whilst digital payments rely on technology, not all of them are instantaneous like real-time payments. 

Real-time payments (RTP) are essentially digital payments that can be initiated and completed instantaneously or near instantaneously. This is different from, say, credit or debit card payments that will take longer to process as they go through layers of queries and approvals.

Cash not gonna be King for long

Consumer demand for real-time payments is on the rise in Malaysia as the pandemic accelerates digitization of payments, according to new research from ACI Worldwide and YouGov. 

The research found that over half of Malaysian consumers (52%) in Malaysia preferred real-time payment methods such as DuitNow. This is behind only cash (62%), and e-wallets requiring cash or card top-ups (62%).

A little over a third (32%) of Malaysian consumers have reduced or stopped using credit cards, debit cards, and cash since the pandemic started. Because of this, almost half (45%) are using real-time payments now as opposed to before the pandemic.

Although cash transactions are instantaneous, the rise of digitalized preferences has pushed real-time payments to the fore. Applications that give users real-time notifications on settlements and payment history are some of the features that cash transactions, although instantaneous, cannot provide.

“This fundamental shift in consumer demand and payment expectations sets forth a challenge for Southeast Asia’s banks, financial institutions, and merchants,” said Leslie Choo, managing director – Asia, ACI Worldwide. 

Real-time digital payments a result of rapid digitalization

Due to rapid technological change, consumers now expect mobile-first and real-time experiences, a facet of the financial industry that has often lagged behind.

Real-time payment systems enable consumers, merchants, and financial institutions to pay friends and customers, settle bills and transfer money instantaneously and effortlessly.

“These organizations can ill-afford to put their modernization projects on hold, despite the challenges caused by COVID-19. 

On the contrary, they can drive growth by joining the region’s emerging real-time payments ecosystem, which will improve their ability to innovate and transform while reducing the cost of infrastructure and operations.”, added Choo.

Consumers expect real-time payments abroad 

As consumers are becoming more reliant on real-time payments domestically, there is, of course, the expectation that this convenience will translate to payments beyond domestic borders. This is especially true once movement restrictions are relaxed, and people are able to more freely travel again.

In fact, almost half (49%) of Malaysian consumers who have previously traveled internationally expect increased usage of RTPs the next time they can travel. 

A whopping 70% expressed that it would be important if their preferred RTP can be used abroad. Consequently, a quarter (25%) expect that their reliance on traditional payments such as cash or credit cards will reduce.

The research also showed that three-quarters (76%) of Malaysian consumers prioritize payment safety and fraud prevention, whereas 67% think that transparency in exchange rates is more important.

A quarter (25%) of Malaysians are buying more online from regional Southeast Asian (SEA) merchants during the start of the pandemic, whereas international online shopping stands at around 23%.

According to the report, Malaysians who choose international sellers do so because they are reassured that their payment and personal data are safely transmitted, secured, and stored (36%); are able to pay with their preferred domestic payment method (24%), and are presented with a wider range of payment options as compared to SEA merchants (24%).

Real-time digital payments and their benefit to enterprises

Whilst cash may still lead slightly as a payment option, it is clear from these figures that the consumer demand for RTPs is dramatically rising. RTPs, with their convenience and speed, are emerging as a preferred form of payment, besides other digital payments such as e-wallets.

As domestic demand for RTP increases, so will regional and international demand. This demonstrates an urgent need for payment modernization not just in Malaysia, but across SEA as well.  

Doing away with cumbersome legacy payment systems can optimize and speed up payments and improve customer satisfaction. 

It is thus imperative that regional players work together to form a coherent, regional cross-border RTP ecosystem, which can boost trade and economic growth down the road. In fact, Malaysia and Thailand already have a cross-border RTP system, using QR codes.

But of course, the safety and security of personal data that are transmitted and stored should be equally prioritized in designing collaborative systems. 

In addition, RTPs can work alongside central bank digital currencies (CBDCs), which a number of Asian countries are exploring. This includes Japan, Singapore, Malaysia, China, Hong Kong, and Cambodia.

It’s not just online merchants that will benefit from RTP solutions, however. Brick and mortar sellers, even mom-and-pop stores, will find it wise to digitalize with RTP as well. 

And come to think of it, RTPs could even pave the way for the future of non-consumer payments too.

Typical payment pain points such as ‘cheque clearing’ that take days; administrative delays caused by manual or technical errors, or delays by layers of management approval can be addressed when parts of the business’ financial processes are digitalized.

Coupled with the automation of business and financial processes within a robust, physical and cyber-secure ecosystem, B2B transactions can also reap similar benefits and drive increased growth.

The post Real-time digital payments are winning the hearts of Malaysians appeared first on Tech Wire Asia.

In parallel to this pandemic-stricken year in which time often seemed to stand still, global economies moved quickly in ways that accelerated change, bringing lasting impact to consumer behavior, fraud patterns, and risk mitigation needs. For Asia specifically, now more than ever, there is a pressing need for better robust payment security and experiences as consumer behavior evolves beyond the Covid-19 pandemic.

Leading payments giant Visa has set its focus on strengthening payments security as consumer behavior evolves during the pandemic. The group stressed the need for robust payment experiences in a changing commerce environment.

As it is, many businesses are no longer taking cash payments, especially since consumers who were once averse to online shopping have had to change their behavior with the occurrence of the pandemic. As this trend continues, e-commerce is likely to grow across all verticals. 

Three trends pervasive in the Asia Pacific

The first noticeable trend is that contactless payments are becoming a health and safety priority; the second, on-demand e-commerce experiences have heightened expectations of quality and speed of service; and finally, the lines between e-commerce and physical purchasing have been blurred.

Because of these trends, Visa noted that fraud has migrated from traditional storefronts to digital commerce. Consequently, it urged the industry to take proactive steps to tackle them. “The pandemic has greatly accelerated changes in consumer behavior, commerce, and hence digital payments. We believe these patterns are here to stay and many first-time digital consumers will decide where to shop based on whether they trust the seller or not,” said Visa Asia Pacific’s regional risk officer Joe Cunningham.

Cunningham emphasized that as digital commerce becomes mainstream, payment security is a fundamental driver of trust so the industry must deliver on consumers’ expectations of safe, convenient, and fast payment experiences.

The payment giant expects contactless payments to replace cash and become the preferred payment method for businesses and consumers, with consumers prioritizing health and safety. As of February 2021, Visa noted that one in two face-to-face Visa transactions in the Asia Pacific is now contactless. Since e-commerce experiences are also shifting, Visa said shoppers now expect products and services to be available when and where they want. This, the company reckons, will require faster, smoother, and more convenient buying and payment experiences.

MASTERCARD CRYSTAL-GAZES HOW THE FUTURE OF PAYMENTS IN APAC WILL PLAY OUT

Dashveenjit Kaur | 10 June, 2021

Additionally, there is an increasing blurring of lines between e-commerce and physical buying. According to Visa data, excluding travel, global e-commerce payment credentials grew over 20% in the last quarter compared to the same period last year, while e-commerce payments volume averaged at least 30% growth in India and Singapore over the last three quarters. This shift is likely to persist as e-commerce growth continues to be robust even as consumers begin to return to stores, Visa said

Security solutions

To stay ahead of the curve, the payments ecosystem must buttress existing infrastructure with enhanced and trusted fraud management solutions, according to Cunningham, since fraudsters evolve their methods faster than consumers and most businesses can prepare for. “In an increasingly digital world, payments security is crucial for consumer trust and must be the foundation of business and commerce, now and in the future,” he said.

Visa has introduced solutions such as Visa Secure to deal with such fraud. It uses the latest standards of the EMV 3-D secure protocol and adds a layer of fraud defense so financial institutions and sellers can be confident that transactions are genuine. This potentially reduces lost sales for sellers because of declined payments and improves the overall consumer shopping experience, Visa claimed.

On the other hand, Visa Token Service (VTS) turns sensitive payment data like card numbers and account details into randomized tokens, thus devaluing data and rendering it useless for fraudsters even if stolen. Visa’s data for the US shows that tokens can reduce fraud by 26% on average compared to online card transactions where consumers enter their card details for making payments, it claimed.

The post Payment security will be critical in post-pandemic digital commerce appeared first on Tech Wire Asia.