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.

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.

Cash has long been king in Indonesia — the archipelago is the second-largest cash-first economy in the world. About 52% of the Indonesian population is still unbanked, while credit card penetration sits at just a meager 0.07 credit cards per capita. 

At the same time, Indonesia is the fourth-largest smartphone economy in the world. The country skipped a generation in finance technology and went straight to smartphone-based digital payments.

According to data from Bank Indonesia, e-wallet transactions at the end of 2018 surged by 209.8% hitting 2.9 billion, compared to just 943 million in 2017. The surge has been led by growth in digital services, from ride-sharing and super apps like Gojek to e-commerce.  Today, mobile payments can now be used for a big portion of daily transactions, both online and offline.

In addition, six years ago the government of Indonesia launched a National Non-Cash Movement to gradually foster a less-cash society and as years went by, a growing number of players jumping on board. But with Indonesians still carrying around more than US$46 billion in cash on any given day, according to Bank Indonesia, there’s still a sizeable opportunity for e-payments providers. 

In January this year, the country’s central bank announced that all mobile payment providers were to replace QR codes with the standardized QRIS (Indonesian Standard QR code), providing a single integrated platform for all transactions made using QR codes across multiple e-wallet providers. 

In total, there are 37 local payment methods (LPMs) in Indonesia, this number is expected to grow as Alipay formalizes its entry into Indonesia in partnership with Bank Mandiri and Bank Rakyat Indonesia. The Chinese e-payments leader joined WeChat Pay, which was officially granted a license to operate in the country this year in January in collaboration with CIMB Niaga. 

The landscape is now dominated by four major players; OVO, GoPay, Dana, and LinkAja. According to a recent study, those are the top four e-wallets with the highest number of active monthly users from the second quarter of 2019 to the second quarter of this year. 

As the apps touting the most downloads combined, these four players are the frontrunners in the battle to claim a slice of the payments pie.

Most recently, Gojek’s funding round and Facebook’s plans to build an e-commerce ecosystem around WhatsApp may accelerate the adoption of digital payments for millions of small and middle-scale enterprises (SMEs) in Indonesia, with businesses already using the popular messaging service to interact with their customers. 

Likewise, PayPal’s arrangement with Gojek will see the latter’s users use GoPay at PayPal merchants globally. Perhaps, with the entree of foreign payment services and investment catering to higher consumer demand, while creating the digital infrastructure needed to facilitate higher payment volumes, Indonesia is shaping up to be Southeast Asia’s next digital payments battleground. 

What does it mean for businesses and consumers?

To date, the payments landscape in Indonesia remains highly fragmented, and any sort of consolidation looks to be a long way off. 

On top of creating a lot of work for merchants is asking them to adopt a bunch of different payment options, the discount wars are also harsh battlegrounds which would only result in small margins that make long-term sustainability questionable for many e-wallet contenders.

However, new partnerships will result in greater efficiencies when it comes to connecting consumers and businesses through one platform. 

That being said, the Indonesian market is not without its complexities, and new e-commerce regulations set to come into force in November 2021 will require extra consideration from merchants looking to enter the space without a physical presence in the country.

The post Is Indonesia the new e-wallet battleground? appeared first on Tech Wire Asia.

Vietnam has recently welcomed its latest intermediary payment service provider, AppotaPay, into the country’s competitive e-wallet sector. 

The country’s e-wallet pie is getting bigger, so what would more new entrants mean to the emerging digital payments landscape in a country with a 100-million-strong population, of which 60% are young occupants?

With this latest license, the State Bank of Vietnam has to date granted licenses to a whopping total of 39 service providers, among which are heavyweight names such as MoMo, Moca, ZaloPay, ViettelPay, and VnPay.

Momo is one of the most well-funded firms of its kind in Asia, having raised more than US$133 million since it was founded in 2013. On the other hand, Moca has enjoyed steady popularity after forming a partnership with Grab in 2018. ZaloPay meanwhile is a part of VNG, Vietnam’s only unicorn.

When AppotaPay — a unit of digital content producer Appota Group — announced that it has received a payment intermediary license from the State Bank of Vietnam last week, market experts reckoned it is closer to taking on VNG.

In perspective, Zalo is VNG’s popular free messaging app, has 52 million monthly active users, and is looking to attract its users to ZaloPay. AppotaPay claims to have 55 million users, setting it up as a likely early-stage competitor to ZaloPay.

Attracting users essential as tipping point looms

With the emergence of more e-wallets in Vietnam, companies will be seen competing fiercely to gain many users to help them to turn a profit. The country’s digital payment market is projected to reach US$8.6 billion in 2020, while the total transaction value is expected to grow by 14.1% to US$14.59 billion by 2024.

While most transactions are still conducted via cash, digital payments technology is evolving rapidly, and the government is also promoting a shift towards electronic payment media, in order to become a cashless economy by 2027.

Within the two main urban centers of Vietnam alone, MoMo, Moca, and ZaloPay are the top three most popular e-wallets, which account for more than 90% of the total market share of e-wallet users. Momo, having amassed 20 million users or 21% of Vietnam’s 100 million inhabitants, is the first local firm to be counted among the top 100 fintech companies in the world since its launch in 2012.

But international consultancy Oliver Wyman believes not all of the e-wallet players in Vietnam will survive. “Already, the region’s crowded mobile payments sector is starting to shrink, with each national market expected to support only two mass e-wallets,” it said.

On the bright side, the State Bank of Vietnam’s data shows that about 15 million people used Internet banking and mobile banking services in Vietnam per month during the pandemic months, indicating healthy cashless adoption. The country has a daily average of around 30 million online transactions.

The post Can Vietnam’s crowded e-wallet market take more players? appeared first on Tech Wire Asia.

4 KEY E-COMMERCE TRENDS IN THE BASKET FOR 2018

Tech Wire Asia | 4 January, 2018

With e-commerce sales estimated to reach US$1.4 trillion in the APAC region alone by 2020, physical retailers are having to up their game in order to compete.

While physical retail has been falling in the United States, in Asia there have been many retail innovations – ranging from payments and logistics to product display – aimed at maintaining the relevance of physical stores. Detailed below are a few examples of how stores are being innovated in China, South Korea, Japan and India.

Unmanned stores in China

Many store operators in China, such as Shanghai-based company BingoBox, are opening outlets across the country.

The 24-hour unmanned stores can be unlocked using a customer’s mobile QR code. Shoppers can then pick out their items and place them on a checkout, which scans and tallies up purchases. These items are then paid for via e-wallets such as Alipay and WeChat Pay.

THE PUSH TOWARD ‘RETAILTAINMENT’

Tech Wire Asia | 6 December, 2017

As well as bringing ease and convenience to many consumers in China, these unmanned stores seek to improve slim profit margins in the retail business by reducing staff costs.

“If capital costs rise quickly, that puts greater pressure on low-margin businesses like convenience stores and supermarkets,” Andrew Song, an analyst at Guotai Junan Securities told South China Morning Post.

“In China, wages and manpower costs have been rising relatively quickly.”

As well as cutting down labor costs, the technology embedded in each store helps to fight against theft.

“Each item has an RFID tag and the system will be able to detect whether it has been paid for,” said BingoBox chief executive and founder Chen Zilin.

“Furthermore, CCTV cameras are monitoring the store 24/7. If you steal something from a traditional convenience store, you might be able to get away with it. But if anyone tries to do that in BingoBox stores, we will definitely find out and they will be banned from entering our stores in the future.”

Super-fast food delivery services

A Baidu Waimai Food delivery service driver in China. Source: Shutterstock.com

Companies such as Tencent-backed Meituan and Ele.me (backed by Tencent’s rival Alibaba) allow users to order their meal of choice using their smartphone, with arrival to their door in around 10 minutes.

ALIBABA ENLISTS BRICK-AND-MORTAR BUSINESSES INTO QUEST FOR RETAIL DOMINANCE

Tech Wire Asia | 8 December, 2017

Facial recognition payment

Ant Financial, one of China’s largest fintech companies, owned by e-commerce giant Alibaba, is testing a payment service called “smile to pay” powered by facial recognition. The company partnered with KFC in China last September.

South Korea’s 3D virtual shopping assistants

Physical stores in South Korea, such as iClothing, have installed 3D scanners where shoppers are able to scan their bodies to create a 3D avatar of themselves. With this, shoppers can virtually try on garments, skipping the need to go to the fitting room.

Japan’s smart vending machines

One of the latest innovations in Japan is the smart vending machine. Through taking a picture of the shoppers, the machine recommends a drink option to them based on their gender and age.

These are interesting times for bricks and mortar stores in Asia and beyond. Source: Shutterstock.com

India’s e-wallets

Carrying cash is becoming increasingly unpopular with consumers, with many now using e-wallets as a preferred payment method.

While platforms such as Alipay and WeChat Pay dominate the e-wallet industry in China, mobile payment platforms in India are arguably more diverse. Among the major mobile payment services in India are Paytm, Oxigen, MobiKwik and PayUmoney.

The post How are physical stores innovating retail in Asia? appeared first on Tech Wire Asia.

The Tencent study surveyed more than 6,500 people across 34 cities, asking them about their payment habits, from the type of payment platform they used to the things they buy. The study found China’s capital, Beijing, emerged as the city with the highest digital payments penetration, with tech capital Shenzhen following soon after. Guangzhou and Shanghai are in third and fourth place respectively.

Beijing is China’s “smartest” city for cashless payments, study finds https://t.co/ona5TBhxDb pic.twitter.com/ZTYoVaJP3p

— SCMP News (@SCMP_News) July 31, 2017

Around half of those surveyed said 20 percent of their monthly spending was totally digital at this point, with another 40 percent saying they carried less than CNY100 (US$14.84) when they go out. An office worker interviewed by South China Morning Post said an entire week could pass without him needing to use cash, as all kinds of merchants from ubiquitous convenience stores to low-tech vegetable stalls offer some form of cashless payment option.

Seven in 10 respondents say going cashless for more than a week was totally feasible and they could subsist with only CNY100 cash in hand, while 84 percent said their smartphones were enough to take care of all their needs.

SEE ALSO: China: Consortium releases paper on QR code standards

As it is now, China is becoming a kind of petri dish for fintech watchers who are predicting digital payments will transform the face of not only shopping, but consumption in general. The cities in China have evidently become especially adapted to the new normal: bicycles and subways are being tinkered to accept payments through mobile apps like Alipay and WeChat pay.

Even beggars are on the trend now, accepting donations through QR codes.

Eighty-four percent of respondents said they were comfortable with going out with CNY100, which could last them for a week. Source: Reuters

Tech Node said Beijing, Shenzhen, Guangzhou, Shanghai and Chengdu are the top performers of the report’s “overall smart life index rankings”, which measures just how much mobile penetration is affecting commerce, social life and residents’ welfare. Though the penetration is still low amongst the older generation and there’s significant age gap in cashless penetration, the adoption rate is generally picking up, especially since WeChat Pay came into play in 2013.

The appearance of Tencent’s product changed the game so much that credit cards finally took off – mobile payments jumped in volume from US$183 million in 2013 to US$2.4 trillion in 2016.

SEE ALSO: Robots, students in charge at Singapore’s first unmanned mart

Furthermore, the way fintechs are playing now in China is also redefining what it means to share and own money. The ubiquitous QR codes are allowing users to transfer funds quickly between friends, while e-wallets are becoming more and more common as time passes. Likely, the banks in China will begin capitalizing on fintech to keep their control over their market shares, while the over saturation of the fintech market will edge out less competitive players.

China is giving us a glimpse of what the future will likely be when cash inevitably gets phased out by digital payments. It will totally transform the face of cities and likely give millions of unbanked and underserved communities access to payment services.

The post In China, cash isn’t king anymore appeared first on Tech Wire Asia.