By NAGESH DEVATA
SPECIAL TO THE NATION
According to PayPal consumer research1 , 43 per cent of consumers in the Asia Pacific identify security as the key-motivation factor when they choose a payment method, while 38 per cent of shoppers opt for convenience.
The nation’s upward trend in e-commerce brings with it a rise in “invisible” payments. These take traditional payment methods such as cash, debit and credit cards, and card readers out of the equation and replace them with digital wallets.
This development is tied to how smartphones are revolutionising how Thais experience the world around them, by changing the way they work, live and play. Thailand has a highly digitised, mobile-first population with a rapidly growing base of smartphone users2.
These devices have changed the way Thais shop and pay, and in the process accelerated the adoption of invisible payments by increasing access to online and mobile commerce.
Examples of invisible payments have already been incorporated into commonly used services and products. From ride-sharing with Grab, food delivery services like FoodPanda, bill payments using LINE Pay, to Buy Now buttons hosted by online retailers, merchants are removing friction from the payment process. They enable users to purchase things they want within the platform they’re on, with no interruption to their experiences.
Thanks to invisible payments, new payment alternatives will help to reduce the friction that customers have long encountered when transacting — whether it is waiting in a queue, fumbling to find the right card or manually entering payment information on point-of-sale (POS) machines.
With the emergence of mobile commerce and social commerce, Thais are looking for simple, fast, and secure payment solutions that can adapt to these platforms. With Thailand taking the lead globally for the longest time spent on the Internet (approximately nine hours, 34 minutes per day3 by one study), innovation that improves payment processes in the new lifestyle channels will be critical to build better consumer experiences.
Reducing friction to create invisible payments is a top priority for payment innovation. For example, PayPal.Me for Business, which is a personalised link that allows for swift and secure transactions compatible with social media platforms, shows PayPal’s customer-centric approach to innovation. It also shortens the cycle between discovery and purchase, and creates a convenient and seamless buying experience for consumers.
The Bank of Thailand, along with commercial and state-owned banks, has provided financial infrastructure support to many types of digital payments. This also includes third parties such as retailers, shopping malls, restaurants and online merchants who will need to strengthen their e-payment acceptance capability to accommodate the development of future innovations.
In the next few years, the challenge for Thailand is to make financial services more accessible to the general public. Right now, the growth in invisible payments is being fuelled by the country’s e-commerce boom.
When these transaction methods become available for SMEs and more consumers, it will be a huge leap towards “democratising” financial services.
This cashless revolution can now be seen in parts of China and India.
Beyond this, the future of payments will be largely shaped by technologies:
Artificial intelligence (AI): AI and machine learning are being explored in the fintech industry to deliver richer, data-driven insights that allow businesses to focus on delivering a highly personalised purchase experience;
Virtual Reality (VR): Payment platforms are already being used inside virtual reality environments. Companies are exploring how VR technology can seamlessly let us explore and shop – and also pay – through VR technology with simple gestures;
Blockchain: Blockchain technology will extend beyond the current use in financial services by allowing for data related to the source, identity, credentials and digital rights to be securely stored with distributed ledgers in many different industries from aerospace to retail; and
Biometrics: Voice recognition, fingerprint scanners and facial identification biometric identifiers are rapidly being adopted into payment technology.
For now, invisible payments are enabling transactions to take place in the background as payment providers and merchants prioritise experience and find more ways to reduce barriers to purchase. The payments industry will continue to be disrupted by consumer demand for ease and convenience.
People don’t engage in a transaction for the joy of the payment experience. People pay to experience the joy and the value inherent in the things that they want and need.
Technological advancements will provide the tools the industry needs to respond to this ever-evolving demand.
Contributed by NAGESH DEVATA, general manager for cross-border trade/Southeast Asia, PayPal.
1 PayPal Cross-Border Consumer Research 2018 – PayPal conducted a global survey with approximately 34,000 consumers from 31 [countries] to examine how people shop online and across borders.