Fueling Southeast Asia’s Digital Future Through Payments
We have seen the adoption of early digital experiences accelerate over the past year, spurred by COVID-19.
Businesses have had to step up their digital efforts to keep up with the continued growth of cashless payments and e-commerce. As we anticipate rampant COVID-19, new digital consumer habits are likely to remain, and digital lifestyles in Southeast Asia are expected to be fueled by innovative payment experiences.
In recent years, technology has reinvented the adoption of payments and commerce.
Visa’s 2021 study on consumer attitudes to payment found that 85% of Southeast Asian consumers adopt a number of digital payment methods, including cards, contactless cards, payments mobile phones, e-wallets and QR code payments.
Almost two-thirds of Southeast Asian consumers (64%) have also tried without cash, especially Vietnamese (84%), Thai (82%) and Filipino (79%) consumers.
Overall, the shift to cashless payments is driven by the growing consumer adoption of contactless payments (63%) and card payments (46%), as well as the increase in acceptance of digital payments by merchants (41%) and perceived security of digital payments (40 percent).
With a wide variety of digital payment methods gaining ground across Southeast Asia, consumers now have an abundance of choice and their payment preferences are increasingly diverse.
Contactless cards remain popular across the region, with usage leading by Singapore (75%), Malaysia (65%) and Thailand (41%). However, much remains to be done to develop the use of contactless cards in several markets. Almost four in five non-contactless card users (74%) are interested in adopting this payment method, especially non-users in the Philippines (88%), Vietnam (87%) and Thailand (85%).
Although contactless mobile payments are less prevalent in the region, they have seen continued growth in the markets where they are available: Thailand (45%), Singapore (45%), Vietnam (45%) and Malaysia (37%) ).
There is also an opportunity to drive the adoption of contactless mobile payments, with seven out of 10 non-mobile contactless users in Southeast Asia interested in adopting this payment method, particularly in Thailand (85%) and Vietnam (84%).
As new payment experiences continue to emerge in the region and consumers increasingly access a variety of digital payments, they are likely to opt for more innovative payment methods.
The growth of e-commerce has also accelerated in Southeast Asia, as consumers adopt new shopping habits due to the pandemic. COVID-19 has led many consumers in Southeast Asia to shop online for the first time through websites (43%) or social media channels (35%).
Online shopping has exploded, especially in Thailand, with nearly two-thirds of Thai consumers (65%) purchasing online for the first time through apps or websites. More than half of consumers in Indonesia (56%) and the Philippines (52%) are also first-time online shoppers.
Social media shopping has also seen increasing popularity in the Philippines (45%), Thailand (44%) and Vietnam (44%), with almost half of consumers in each market being first-time online shoppers. times on social networks.
As e-commerce continues to grow rapidly, more than two in five Southeast Asian consumers also buy more frequently from large online marketplaces (44%).
At the same time, consumers in the region also shop more frequently from home businesses (40%) and local businesses (29%). With consumers increasingly accustomed to shopping on their smartphones and computers, e-commerce is poised to continue to grow during the pandemic and beyond.
As consumer preferences and habits continue to change, businesses have the opportunity to delight consumers with digitally driven strategies in payments and commerce.
This includes building e-commerce capabilities and accepting contactless payments so consumers can shop and pay however they want. With the boundaries between traditional face-to-face commerce and e-commerce blurred, businesses in Southeast Asia are also embracing omnichannel commerce, integrating digital services such as smart checkout and application-based solutions in retail stores. physical stores. The result is a consistent and fluid shopping journey, redefined by payments.
Businesses in Southeast Asia are also recognizing the need for digital solutions to increase their efficiency.
The pandemic has exposed pain points in business-to-business (B2B) payment processes – movement restriction orders preventing businesses from depositing checks at bank branches to vendors unable to meet in person for payments or having concerns Manage money.
To reduce friction, many companies have turned to digital solutions such as Visa Commercial Pay, which allows them to issue virtual cards on demand through their mobile apps for B2B payments.
Given the high penetration of contactless in Southeast Asia, we have also seen a growing interest in card products from businesses looking for speed and convenience. Likewise, contactless virtual cards are also poised to grow, as the region’s growing interest in contactless mobile payments continues to expand into the B2B space.
As businesses demand greater control and efficiency over transactions, digital solutions are poised to redefine B2B payment processes, making them smarter, faster and more secure.
In Southeast Asia, the future of payments is digital. We now find ourselves in the fourth payments revolution, where emerging technologies are expected to drive greater interoperability between payment providers and transform user experiences as consumer lifestyles and business processes become increasingly digital. throughout the region.
As the payments landscape continues to expand and fragment, the digital solutions that thrive are the ones that are redefining the everyday experiences of consumers and businesses for the better.
From enhanced digital offerings from legacy financial institutions to new digital solutions from emerging fintechs, the rapid growth of the payments ecosystem in Southeast Asia will continue to be driven by innovation. As a global leader in digital payments and a key player in the ecosystem, Visa aims to collaborate with a host of strategic partners to continue fueling the fintech revolution, making new digital payment experiences accessible to everyone through our network of networks. .
Ultimately, innovative payment experiences will be the hallmark of Southeast Asia’s digital future: intuitive, transparent and secure experiences that will fuel digital lifestyles in the fourth payments revolution and beyond. of the. -CONTRIBUTED
The author is the group’s country manager, Southeast Asia Region, Visa.
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