Non-card payment methods in Southeast Asia
Warren Hayashi, President, Asia Pacific, Adyen, shares his perspectives for 2021
2020 was certainly a year like no other. While the global pandemic has shaken the world up, it has also offered businesses new opportunities and challenges. As APAC is spearheading the road to recovery, it’s key that we consider these perspectives and learnings for the year ahead.
Before the Covid-19 pandemic, consumers were already demanding shopping experiences that seamlessly link the online and offline. Click-and-collect, buy-online-return-in-store experiences were really just the tip of the iceberg.
It’s even more important that retailers think beyond online/offline moving forward, as consumers worldwide have had a taste of how flexible retailers can be – implementing buy-online-pick-up-in-store, endless aisle, curbside pickups, etc. – as cities around the world implemented lockdowns and retail restrictions to contain the pandemic.
For example, according to our recently published Agility Report, 87% of shoppers in Singapore want the cross-channel experiences that retailers offered during restricted retail conditions at the start of the pandemic to continue as restrictions start to ease. While the experiences may have been less than seamless then, consumers are now expecting these unified commerce conveniences. The pandemic has raised the bar.
The unpredictability of the pandemic has shown us that brands have to be present in more channels. Stores with only brick-and-mortar presence were hit the hardest, and we see many brands quickly pivoting online. But the learning here is: it’s not just an ecommerce boom.
In our Agility Report study covering key markets including Australia, Hong Kong and Singapore, we uncovered that businesses that consistently perform the best are the ones that can combine their physical and digital worlds to create a fluid, channel-agnostic experience which prioritizes the customer. This is unified commerce, and our data has revealed it to be a critical success driver. It helped to stabilize sales during the pandemic by offsetting lost in-store transactions with an increase in ecommerce.
"The store continues to be an important part of retail, and unified commerce isn’t just about the digital storefront and the physical store."
Especially for Asia Pacific, the store continues to be an important part of retail, and unified commerce isn’t just about the digital storefront and the physical store. We’ve seen how social media and even instant messaging have become part of the shopping experience – and it’s important that brands consider the full customer journey as online and offline channels continue to blur.
Covid-19 has shown that for many brands, even if you serve a large domestic market, you may still gain traction from a global audience. We’ve seen domestic shoppers turning to global sources for essentials like face masks when local supplies run short.
As more and more traditional brick-and-mortar-only brands go online and more local shops go global, shoppers now have a wider pool of brands to shop from. This applies to items beyond essential goods, of course. For example, a shopper from the Netherlands may shop online for an ergonomic chair on a Hong Kong website as Work From Home (WFH) becomes the norm. Or a US shopper may be searching for homeware on an Australian ecommerce site.
One way to make shopping easier for a global customer base is to reduce friction in the checkout process. Strong customer authentication is a growing global trend. Several APAC brands that already have customers in Europe and the US are perhaps more familiar with international regulations such as Europe’s PSD2. If you have an online presence, it’s vital that you familiarize yourself with the regulations and authentication that makes sense to your shoppers.
Another quick win is to offer some of the key preferred payment methods such as credit cards, wallets and “buy now pay later” options that have recently become more popular. If you notice an influx of shoppers from a particular region or country, you may also consider offering local payment methods that are common to those shoppers.
The demand for more seamless payments is growing, and shoppers are more and more in control of the shopping and payment journey. This demand forms the basis of some of the innovative shopping and payment experiences that we’ve seen globally.
Demand for frictionless, contactless and cashless payments is growing in APAC and around the world
Some brands have introduced virtual experiences where shoppers can opt to shop via a personal shop assistant and pay using Pay by Link. New Zealand-based jewellery brand Michael Hill is one such example. The brand enabled Zoom consultation while physical stores were closed, which meant that shoppers were still able to get that perfect gift.
Even as shoppers return to stores, you’ll notice that things are a little different these days – there’s an elevated hygiene consciousness. They’re asking for contactless payments, which could be in the form of NFC cards, QR codes, tokenized cards on their mobile phones, etc.
“Buy now pay later” which was a trend brought about mainly by millennial and Gen Z shoppers, are also in greater demand as shoppers look to better manage their spending.
In short, brands need to think of payments beyond just cash and cards. Rather, it will be an evolving payment landscape where local payment methods become more important. Local payment methods, from over-the-counter payments to wallet payments and buy-now-pay-later, will be key to better cater to your customer payment preferences – helping to reduce friction and increase the rate of conversion at checkouts.
Many brands have started to better understand the importance of payments and how Adyen as a solution can help optimize revenue across all channels, including online and at the point-of-sale (POS) in-store.
Many of our APAC merchants have a regional and even global presence, and are utilizing the Adyen local acquiring solution in the US, Europe, LATAM – and of course within the key APAC markets of Australia, Hong Kong, Malaysia and Singapore. For example, foodpanda and Sephora are leveraging our Malaysia acquiring solution to better serve their customers in Malaysia.
Brands can leverage Adyen's end-to-end payments solution, including local acquiring, to grow revenue
Some of the advantages of Adyen local acquiring include better card authorization rates and faster processing with direct connection to major card schemes like Visa and Mastercard. In many cases, marginal gains in authorization rates can result in significant revenue improvements. Speak with our team to learn more about the solution that best suits your brand.
The year-end retail season used to start with Black Friday, followed by Cyber Monday and the Christmas gifting period. These days, we are all familiar with the record ecommerce sales volume that happens on Singles Day (November 11 or 11/11). From a Chinese shopping festival, it’s grown to become an ecommerce phenomenon that global brands also actively participate in.
Inspired by the 11/11 date, retailers in APAC have also started introducing shopping events on 10/10, 9/9 and 8/8 – bringing an earlier start to the traditional Q4 retail season.
What does this mean for retailers? Making sure you can support the increase in transaction volume online and in-store is one aspect, as well as being able to offer shoppers’ preferred payment methods, optimizing the customer journey, and managing risk/fraud. The earlier you speak with the Adyen team, the faster we can set up an end-to-end payment solution that works for you.
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