In your opinion, what could be considered the biggest technology hurdles cross-ecommerce transactions are facing today and what can be done to streamline them?
From a consumer perspective, the most convenient way to make cross-border payments by far is by using a credit card. Taking into account that in certain Asian markets a high number of consumers do not have access to credit cards, most of the times it is not easy for them to do online transactions. The evolution and the emergence of new alternative payment methods in the market, as we can see in the increase of wallet payments in China and in other Asian markets, starts to fulfil the needs of these consumers and makes it easier for them to do cross-border ecommerce payments. Other technologies would also be needed – for example in the case of Chinese consumers who would like to make purchases from a Singapore website, Thailand airline, and so on. In this case, there should be a payment gateway capable of processing country specific alternative payments, other than credit card, to ensure that cross-border ecommerce transactions can be fulfilled securely and in a frictionless manner, while providing ready local currency settlement and account service to local merchants.
What is your view on cash payments in ecommerce? Can you give examples of countries where successfully implemented digital payment methods have decreased the share of cash-based payments? In which countries is cash still playing a key role in ecommerce?
With no doubt, the most disruptive changes are witnessed in China, India and Vietnam. In the past, many transactions would still rely on cash (cash on delivery) but, due to the coming of age of motilities and mobile commerce, many transactions are no longer cash-based, but streamlined by wallets like Alipay, WeChat Pay and others. Even so, I think that the use of cash for ecommerce is still factual though diminishing, like we witness in the case of markets like the Philippines, Thailand, India; here, some people transact online and mobile, but they will continue to pay in cash until the fully cashless society becomes a reality. Overall, I believe that due to the increase of the access to alternative payments and to motilities, the ratio of cash payments in certain markets in ecommerce transactions will continue to go down.
Do you believe that mobile payments, as well as loyalty programs and rewards, will lead to a cashless economy and to what extent?
Mobile payments, loyalty programs, and rewards will definitely encourage and lead to more consumer behavioural changes towards more digital payment adoption, whether paying online, mobile or offline – in stores. Currently, we see that, thanks to the development of motilities and the high mobile penetration in Asian markets, the economy becomes more cashless. Beyond that, loyalty programs and rewards are also getting more popular in Asia: merchants offer more incentive for customers when paying via digital means and allow their customers to have the choice to pay by the card loyalty points as part of the checkout.
What are your main expectations regarding ecommerce for the next 3–5 years? What is going to be the most notable difference from what we see today in digital commerce?
I believe the experience of making payments will be getting more frictionless, as evidenced by a wide range of new technologies from tokenisation, biometrics, express checkout, IoT, etc. The user experience will get more digital over time because of the multi-channel commerce and more developments in VR. Due to the avail of Big Data and AI, we see that customers are taking the initiative to make a timely decision. We will witness the uptake of a more intelligent commerce.
The use of Big Data analysis for shopping platforms will help in understanding consumer behaviour, to be able to help in making easier and valued buying decisions. Beyond that, we could also refer to the merchant’s perspective. Because of the avail of more alternative payments to support ecommerce developments across various sales channels and media, the demand for a regional integrated omnichannel payment service for merchants will continue to grow and it will be a lot easier for merchants to address and meet the market needs on managing and diversifying payment options across various markets. Apart from that, we should also take into account that the more data and connected devices (IoT) available on the market, the more opportunities for security vulnerability arise. On a technical side, concerns arise and banks and merchants should take necessary measures to enhance the protection of consumer and payment data along the digital journey. We could also bring into discussion chatbots in ecommerce, regarding the support that will scale in streamlining ecommerce transaction. We will see more and more merchants using chatbots to serve customers for ecommerce transactions, especially cross-border.
What member(s) of the current payment ecosystem has/have the most to gain, which has/have the most to lose and which one(s) need(s) to innovate the fastest to stay relevant for their customers?
There have been some successful disruptors who capitalised a lot and reached market potential with the right technology capable of disrupting the market. These players offer extra convenience and value to the consumers and to the market, and provide more low-cost payment processing. We see that, traditionally, the payment ecosystem is largely dominant by banking and financial institutions, but currently, we see a lot more non-traditional payment players in the market, like WeChat, Alipay, Grab Pay or LinePay. It is not only the technology they possess, but also the mass of consumers and the amount of transactions and data that will make them play a more important part in the payment ecosystem. Apart from that, we also see the continuous disruption of some new players in the blockchain and AI area, players who will capitalise on the coming market demands and will be key innovators.
About Joseph Chan
Joseph Chan, CEO of AsiaPay, founded the company in August 2000. He spearheaded the company and product development together with his management team, to become one of the most successful e-payment service and technology company in Asia, with operations covering 13 countries.
About AsiaPay
AsiaPay, a premier e-payment solution and technology vendor and payment service provider in Asia, strives to bring advanced, secure, integrated and cost-effective e-payment processing solutions and services to banks, corporate and e-Businesses in the worldwide market, covering international credit card, China UnionPay card, debit card, eWallets, ATM transfers and other prevailing prepaid card payments.
This editorial was first published in our Payments and Commerce Market Guide 2018-2019. The Guide presents the key trends and developments in global and regional payment methods by highlighting the innovation, challenges, and developments in the use of the most important payment methods across geographies and verticals.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now