About the author
Chee Kong Chan is the COO and co-founder of GlobalTix,
an electronic reservation and distribution platform for tours,
activities, and F&B in the tourism industry.
The way we transact is changing rapidly, with 86.29% of the world’s
population owning mobile phones. This has entrenched digital wallets as a
major payment option, with predictions that by 2025, there will be 4.8
billion mobile wallet users. By 2028, the global digital wallet market
is predicted to reach US$32.75 billion.
Consumers driving digital wallets adoption
The ease of signing up of digital wallets, driven by superapp wallets
such as GoPay and GrabPay creates an ecosystem of using wallets.
Furthermore, the inability of banks to run credit checks due to limited
data availability on consumers results in low credit card usage (e.g. 5%
in Indonesia). Moreover, the Covid-19 pandemic has catalysed the
decline of cash as a payment option.
Potential generational shift in payment modes
The resultant impact on merchants globally could be an entire
generation skipping credit card usage. Research has shown that with
regards to APAC e-commerce & POS payments, digital wallet usage is
set to rise to 73% and 59% respectively, compared to 15% and 29% for
cards.
What does it mean for merchants?
Merchants are now faced with stark choices, either accept wallet
payment or risk losing the sales – this decision is no different from a
merchant making a decision about whether to have a website 15 years ago –
no one will even question if this is necessary now.
Yet, the challenge for merchants is that a local payment gateway
typically only accepts domestic cards/digital wallets, However, travel
is an international business! For instance, a Singaporean attraction
using a local payment gateway may accept local cards and payments from
domestic digital wallets (e.g. GrabPay Singapore) but unable to accept
foreign digital wallet payments (e.g. GoPay, MCash). Taking it further,
it means an Indonesia visitor will not be able to purchase on the
merchant website using his GoPay wallet and sales may be lost.
What can merchants do?
Businesses can capitalise on multi-country payment redirection
services, such as Alipay+ and GlobalTix's GTPay, to accept a variety of
digital payment methods widely used in Asia.
Alipay+ supports only local wallet payment methods (e.g. Rabbit LINE
Pay in Thailand) to Alipay+'s worldwide network of 2.5 million
merchants, whereas GTPay allows merchants to accept _both _credit cards
and major digital wallets.
In the case of a merchant using GTPay, about 40% of their bookings
are paid via wallets with international wallets contributing 15% of
their bookings.
As the digital economy grows in Southeast Asia, companies must
address the fragmented payment landscape. Merchants need a partner who
can provide connectivity solutions to meet consumer demands and adapt to
changing local and global payment environments.
It's no longer a luxury, but a requirement for businesses to stay competitive.