Nearly 40% of respondents used a smartphone wallet in India, whereas in China the figure reached 70%, as a result of increased uptake of NPCI’s Immediate Payment Services (IMPS) and innovation from ecommerce technology companies, according to a report issued by the payments gateway ACI Worldwide, firstpost.com reports.
More than 60% of respondents in India used both desktop and mobile devices to make ecommerce purchases, with millennials driving digital use. The importance of faster speeds and higher efficiency (48% in India versus 47% in Asia Pacific), and better rates (28% in India versus 15% in Asia Pacific) when choosing new methods of payments was stronger in India compared with other countries in Asia Pacific.
Mobile recharges (60%), shopping online (58%), utility payments (58%), and paying for taxi services (52%) were the dominant smartphone wallet purchases in India. Newer methods of payment with mobile platforms, such as smartphone wallets and online payment tools, are being driven by increasingly sophisticated Gen Y consumers aged 25-34 years old.
82% of respondents from Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore and Thailand used new digital payments. The top reason consumers use online payment services is to enjoy faster and more efficient payments (47%), followed by trust in online payments (21%) and better rates compared with other methods of payment (15%).
The Shared Economy, which is built around the sharing of resources, is a major market driver in Asia Pacific. The top three ‘shared economy’ services across the region are taxi services, aggregated meal delivery and accommodations. Non-bank financial services, such as Alipay and WeChat Wallet, are disrupting emerging markets and challenging banks by becoming viable alternative payment methods, resulting in higher usage of online payment services (72.4%), smartphone wallets (32.8%) and mobile money (13.3%).
Digital methods of payments are set to grow in tandem with shared economy services in Asia Pacific, especially for transactions where convenience, speed and seamlessness are valued. Examples of these transactions include taxi hire and car sharing services where 10% of respondents in the region are already paying for them with smartphone wallets.
It is expected that the Gen Y consumers to drive further change in payments, with online payments and smartphone wallets showing a distinct skew toward Gen Y users (highest with 36.8% usage). Emerging markets have the potential to be a key force in driving new non-bank financial services, with these markets scoring higher in their intention to use new services on average (nearly twice as likely for smartphone wallets).
The need for seamless and integrated payments within applications is crucial, given the increasing usage of Shared Economy services across Asia Pacific and a continued dependence on cash. Smartphone payments are very likely to replace cash as 62% of respondents were already showing a high intent to use in the future. The increased need for financial institutions to focus on security and real-time fraud management to safeguard the rising volumes of immediate and card-not-present payments for both the banked and under-banked in Asia.
The need for greater collaboration in the payment ecosystem (banks, retailers, telco and fintech companies), as consumers diversify their payment behaviours (debit card (50.5%), bank transfers (50%) and online payment services (52.2%) used equally for online purchases on the desktop for Gen Y), to ensure that new methods of payments remain fast, seamless and secure.
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