Safety a key concern in e-payment
For mobile payment systems to truly flourish, firms must ensure transactions are secure
Asia is widely accepted to be leading in mobile payments globally.
A study by research agency Kantar TNS found that more than half of connected consumers in the Asia-Pacific region use their mobile to pay for goods and services via apps, compared to consumers in North America and Europe.
With e-commerce expected to be worth around US$88 billion (S$121 billion) by 2025, most fintechs in the region have made payments their focus.
According to United Overseas Bank, 43 per cent of fintechs in the region focused on payments, and they are in the driver's seat of making a cashless society turn into a reality.
It is no surprise Singapore is making headway in mobile payments given the Government's push with its Smart Nation agenda.
Starting next year, customers at coffee shops, hawker centres and industrial canteens, can choose from all 20 payment schemes through unified touchpoints. It is the first time the country is unifying behind an integrated system that provides options for consumers.
Last year, the Government introduced PayNow - a national real-time payment platform that allows people to send payments to each other across participating banks in Singapore with just a mobile phone or an identity card number. This has since extended to businesses, government agencies and social service organisations.
Earlier this year, several payment companies came together to develop a universal unified payment Quick Response code, SGQR, to allow consumers to scan and transfer funds from as many as 27 e-payment apps.
China is leading the pack in the cashless game with the rise of digital wallets such as Alipay.
With more than 500 million users, Alipay is the most successful mobile payment solutions worldwide.
China has also been the biggest proponent of the QR code, which has led to the growth of mobile payments as people increasingly use social media platforms to make transactions.
More companies are adopting payment innovation to turn cash into digital money.
Despite the advances so far, there is room for improvement and wider acceptance usage by businesses and consumers across all channels.
Data shows that six out of 10 consumer transactions were made in cash; which contrasts with Singapore's connected lifestyles and digital literacy.
This is largely attributed to fears and concerns over data privacy and convenience fees charged with credit card and e-payment usage.
Today, not offering the best customer experience is a competitive disadvantage.
Shoppers expect faster check-out times and a fuss-free and secure payment process. In retail, modern payment solutions are key to improving the customer experience.
Connected commerce concepts are among the most promising technologies. Supermarkets incorporating the Internet of Things (IoT) technology in their services are currently the latest sensation.
But even with the rise of IoT and mobile payment adoption, security still tops the list of concerns among consumers.
A recent study by F5 Networks found that secure experiences are of foremost importance for Asia-Pacific consumers, with 53 per cent of them prioritising security over functionality and convenience.
For consumers, it could mean the susceptibility to payment fraud due to day-to-day operations or a lost device. Thus, merchants need to ensure transactions are processed securely.
The writer is executive vice-president, financial institutions and sales, of Wirecard. This is an edited version of an article that appeared in The Business Times last Friday.