In March and April 2020, Rapyd, a global fintech company led by CEO Arik Shtilman, surveyed 3,500 online consumers to research the preferred and most used payment methods online across the Asia-Pacific region. This resulted in a report uncovering how consumer trends, buying behaviour and expectations are evolving with the increased development of fintech in Southeast Asia. The study showed a rapid rise in new payment technologies that provide a convenient service adapted to the local climate. With so many underbanked communities in the region, fintech is allowing millions of people to catch up with the digital world.
The Rapyd Global Payments Network covers more than 900 locally preferred payment methods in more than 100 countries, making it perfectly positioned to assess the situation. Businesses can use this report to drive their sales, increase cart conversions and reach more customers.
During the current health crisis, buyers have moved more towards wanting to use cashless methods, making it essential for vendors to adopt the most appropriate digital payment option. The pandemic is also helping eCommerce and mCommerce businesses increase their audiences and include new customer segments into the expanding internet economy, an economy which hit the $100 billion USD mark in 2019. We take a look at and give you some insights and key findings for the following four Southeast Asian countries.
Already the second-most popular payment method for eCommerce in Singapore, eWallets and electronic fund transfer services such as PayNow and FAST bank are continuing to rise. Of the respondents in the study, 70% reported having used PayNow in the last month, ranking second place among the top payment methods. GrabPay, one of the services offered by Grab, Southeast Asia’s largest mobile technology company, is the third most popular payment method. Grab is using fintech in Southeast Asia to take on the underbanked problems affecting the region, empowering the populations of SEA through technology. This move towards digital payments correlates with the growth by 25% of online shopping in the country during 2019.
The most popular online payment method by usage (65%) and preference (21.4%) is bank transfer using Maybank2U. This bank offers funds transfer without a transfer fee, and of course, it is easier and faster than using cheque for business and personal transactions. When counted together, 22% of respondents choose eWallets as their preferred payment method with Touch ‘N Go, Boost, PayPal, and GrabPay all rising in popularity. Boost already has 7 million users and is widely accepted in Malaysia with over 140,000 touchpoints both online and in physical stores. Cash on delivery remains widespread–65% of respondents claimed to use it before the Movement Control Order (MCO). This move to digital payments reflects the fact that 82% of the population, aged between 16 and 64, purchased online in 2019, an astounding 100% increased growth in B2C eCommerce spend in the year.
Almost 18% of respondents in the study reported OVO wallet as their preferred payment brand with 69% of them claiming to have used it in the past month. Besides the payment service itself, OVO creates customer loyalty by giving points for shopping at various online stores and offering deals from its partner merchants. On the archipelago, 33.8% choose one of three eWallets (OVO, Go-Pay, or Dana) over cards or cash.
One significant change in the eCommerce sector in the country is the move to in-house logistics, and the gross merchandise volume will likely grow by 50% in 2020, according to Redseer’s latest report. As Indonesians embrace an online culture, companies are having to rapidly respond to what is considered one of the fastest-growing B2C eCommerce markets in the region.
In Thailand, the TrueMoney eWallet is the number one epayment method with 16.8% of users and 66% of these respondents claiming to use the service regularly. During the pandemic, it reminded customers to reduce the risk of infection by using the eWallet instead of cash when visiting its partners like 7-Eleven, Makro, foodpanda, Google Play and Netflix. The most popular payment methods consist of eWallets and bank transfers, a trend accelerated by the interoperable PromptPay payment scheme. But even in the highly digital country of Thailand, cash is still preferred by 19.4%. As the pandemic plays out, Thailand will likely notice an even more marked upward trend in the use of eCommerce and changes in consumer behaviour.
If businesses want to keep competing, it is essential for them to understand consumer trends, buying behaviours and customers’ ever-changing expectations. The Rapyd 2020 Asia Pacific eCommerce and Payment Study provides solid information to allow entrepreneurs to invest in the right technology, suitable for their market so that eCommerce and mCommerce can target the right audiences and bring new customer segments to the internet economy. These strategies will be critical as digital adoption accelerates, especially now, when the COVID-19 crisis is fueling the trend.