APAC: Y consumers advocate diversified payments plethora

The study, conducted by IDC Financial Insights and commissioned by ACI Worldwide payments gateway, surveyed 2,000 respondents across Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore and Thailand. Research results showed that across the eight countries surveyed, 82% of respondents had used new digital payments, enterpriseinnovation.net reports.

Online payment services usage was driven by the desire 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, according to the survey, is defined as being is built around the sharing of resources, is a major market driver of online payment usage in Asia Pacific. The top three ‘shared economy’ services across the region are taxi services, aggregated meal delivery and accommodations.

More than 77% of survey respondents have used online payment services such as PayPal and Google Checkout, with the top reason being that the services are faster and more efficient (48%), followed by them being trusted over competitor payments (27%). Of the respondents who have carried out online shopping activities on Facebook, Line and WeChat, almost 50% have also purchased virtual products on these social platforms, while 22% have used a contactless wallet accessed through a smartphone. The most typical use cases were for offline shopping (61%) and paying for services such as taxis (59%).

“The region is rapidly moving toward real-time or immediate payments, driven by customers’ demand for faster and more efficient payments. Non-financial services have added to the dynamic competition, extending payments from online and mobile ecosystems into peer-to-peer payments within social apps such as WeChat and Line,” said Rachel Hunt, marketing director, Asia Pacific & Japan, ACI Worldwide. “Asia Pacific’s FSIs, processors and retailers will need to transform their payment infrastructures to support any-to-any payment flows and offerinnovative value-added services in a secure environment to compete.”

“The rising behavioural complexity in the younger consumer demographic is driving a shift in digital payment methods, and the choice is no longer simply between cash and cards. We are seeing a rise in unique Shared Economy business models, and non-bank financial services are quickly experimenting with new mobile solutions to cater especially to unbanked populations in emerging markets,” said Leslie Choo, general manager & vice president, ASEAN & Greater China, ACI Worldwide. “Banks need to embrace these disruptions in order to innovate long-term winning strategies. We are entering a new era in payments, with developments focused on financial technology and customer experience that will shape our purchasing behavior on the mobile platform.”

Emerging markets in APAC 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). Moreover, 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. There is an increased need for financial institutions to focus on security and real-time fraud management to safeguard against the rising volumes of immediate and card-not-present payments for both the banked and under-banked in Asia.

There is also a 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.

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, like taxi hire and car sharing services where 10% of respondents in the region are already paying for them via smartphone wallets.