Voice of the Industry

Ensure local preferences are driving your payout strategy

Wednesday 6 May 2020 07:33 CET | Editor: Anda Kania | Voice of the industry

Highlights from Rapyd’s 2020 State of Disbursements: Asia-Pacific Outlook study presented by Brendan Miller, Head of Global Product Marketing and Research Programs at Rapyd

In 2020, Asia’s combined GDP will overtake the rest of the world’s combined economic output, and by 2030 the region is expected to contribute nearly 60% of global growth according to the World Economic Forum. In a post-COVID-19 world, consumers, workers, and beneficiaries are reevaluating their relationships with the companies they do business with and how they receive funds. Remittance companies, contracting platforms, and marketplaces that are fastest at getting funds into beneficiaries’ hands will be the long-term winners in the battle for new market share as Asia remains a major economic opportunity for global businesses.

Companies that can quickly adapt to the needs of their beneficiaries while solving the complexity of global mass-payouts will outpace their competition during the pandemic and beyond. Stay-at-home orders around the globe are abruptly requiring digital leaders to adapt to new payout methods. In a pre-Covid-19 world, disbursing in cash-over-the-counter may have been preferred by the beneficiary, but now, a bank transfer or push-to-card method is becoming the preferred method as the beneficiary’s local over-the-counter location may be shut down.

Asia Demonstrates That There is No One Size Fits All Payout Strategy

Across the Asia-Pacific region, consumers have high expectations for getting paid in locally preferred methods, and they want to be paid differently depending on who is sending the funds. In March and April 2020, Rapyd conducted a first of its kind study to better understand the financial habits and payout preferences of consumers in seven APAC countries. We surveyed 3500 online consumers, 500 respondents per country in India, Indonesia, Japan, Malaysia, Singapore, Taiwan, and Thailand.

Some key findings include: 

Developing economies are more open to new payment, financial, and billing technologies. Consumers in emerging markets like India, Indonesia, and Malaysia were more willing to explore new payment and billing technologies. Developed economies like Japan and Taiwan were more content to use ‘tried and true methods’. In India, three-quarters of the respondents prefer to be ‘up-to-date’ or ‘likely to explore’ the latest payments and billing technology. In Japan, nearly two-thirds said they were content to use ‘tried and true’ methods or ‘hesitant to try’ any new methods

Beneficiaries desire security, speed, and low-cost alternatives. 82%percent of Indians said “keeping my personal information safe was extremely important.” The cost of the disbursement was the secondary consideration across the region. Additionally, consumers wanted funds the same-day or guaranteed for immediate use upon disbursement date.

Consumers across the region receive a variety of payout methods throughout the month. Although bank transfers are a predominant method overall, we found that consumers receive cash and e-wallet payments frequently. In Malaysia, 52% of consumers received cash from friends and family. In Thailand, 32.6% of consumers received their salary in cash. In India, 60% who work in a contract or gig role received funds in an e-wallet account.

The payout use case ultimately determines the beneficiary’s preferred method. In Japan, 74% of beneficiaries said they desired to get paid from their employer by bank transfer. But, when the funds come from a friend or family member (P2P), 40% prefer to receive funds in cash. In India, e-wallets dominated for repayment from P2P use cases such as payments from friends and family with 33.5% making e-wallets their preferred choice.

Be Adaptive: Build Payout Partnerships Not Payout Infrastructure

Rapyd’s survey data suggests that businesses need to pay attention to consumer’s shifting preferences and needs when developing their payout strategies in Asia. The disbursement market in the region is diverse and changing fast. Keeping up with all the regulations, changing consumer preferences, and trends in every country require building and maintaining a vast technology infrastructure and internal compliance program. None of which is a core competency for most businesses.

Get a copy of the full report - 2020 State of Disbursements: Asia-Pacific Outlook

About Brendan Miller

Brendan Miller leads Global Product Marketing and Research Programs at Rapyd. Prior to Rapyd, Brendan co-led Forrester’s global research on digital commerce and payment strategies. He has spent 20+ years as a B2C and B2B marketer, spanning technology, services, retail, CPG, and durable goods including stints at payment companies, such as First Data, Mercury, and Vantiv. Brendan’s research and analysis have been widely cited in publications including The New York Times, USA Today, Bloomberg, WSJ, Fortune, Barron’s, CNBC, as well as NPR, and the Financial Times.

About Rapyd

Rapyd helps businesses create great local commerce experiences anywhere. Innovative ecommerce, technology firms, and marketplaces use our Fintech-as-a-Service platforms: Collect, Disburse, Wallet, and Issuing to integrate fintech and payment capabilities into their applications. The Rapyd Global Payments Network connects to over 900 local payment methods in more than 100 countries. Investors include Oak HC/FT, Tiger Global, Durable Capital, Üoatue, Stripe, General Catalyst, Target Global and others.

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Keywords: disbursement, APAC, Rapyd, survey, study, payout
Categories: Payments & Commerce
Countries: Asia
This article is part of category

Payments & Commerce