APAC: digital wallets consolidation among main transformations to impact ecommerce

Boasting 60% of the world’s population and a growing consumer base twice as likely to buy online, as compared to any other group in the world, Asia is expected to set the agenda for global online retail until 2020. In fact, according to eMarketer`s forecasts, China is expected to surpass USD 1 trillion in ecommerce transactions, accounting for over 40% of total worldwide ecommerce transactions by 2018.

In its white paper called “The 10 Industry-Wide Transformations Impacting Ecommerce in Asia Pacific and Implications for Your E-Commerce Growth Plans”, MasterCard has identified ten transformations (from a consumer, merchant and issuer perspective) that are expected to drive the ecommerce evolution by 2018.

On payment providers and issuers` side:
• The consolidation of digital wallets
With digital payments progressively embedded in mobile phones, there will be less need to subscribe to a variety of digital wallets (there are over 20 in India alone). Payment technology is enabling consumers, issuers and merchants to leapfrog to a secure digital payment network. This is happening through cutting edge technology in digitisation, tokenisation and authentication of card information. At the same time, big digital players like Apple, Samsung and Android are using existing payment networks like MasterCard, integrated into their card-on-file systems.

• Security in a heartbeat
The use of biometric data from mobile and wearable devices will ensure constant identity authentication. This is already being explored with the use of facial recognition and electrocardiogram (ECG) technology.

• Faster checkouts, less fraud
The consolidation within the digital payments industry, coupled with the innovations in digitisation, tokenisation and authentication will ensure a seamless checkout experience for consumers, according to MasterCard. Thus, merchants will not need to hold huge amounts of personal payment data which is making them a target for fraud.

On consumers` side:
• Mobile devices will be the door to High Street
The mobile screen will be a retail destination, giving people on-the-go access to supermarkets, marketplaces, boutiques and niche stores.

• Familiarity breeds consent
Merchants using transaction data in a secure and intelligent way will unlock the trust of the consumer. People will be able to choose to only receive offers that are relevant and of value to them. Companies that get the equation right will be given permission to access more touchpoints in people’s lives. Consumers will browse, rate and recommend products and services with friends and followers at all times. There is already an increase in partnerships between merchants and social platforms like Instagram, Facebook and Pinterest that make each shopping moment shareable with one-click.

On merchants` side:
• Data will drive intent
Customers will be prompted to shop for things even before they know we need them. Buying will be one component of a much larger digital ecosystem. Data gathered from operating systems and mobile devices will inform what customers buy, when they buy and who they buy from.

• Service and rewards will be the killer apps
Comparison shopping will make price tablestakes. The merchants who deliver on their brand promise in a personalised and emotionally engaging way will gain the loyalty of consumers. Reward systems and CRM programmes will become critical for sustainable success.

The white paper can be downloaded here.