Integrating payment solutions towards a cashless society

Asia remains a fragmented market in the digital payments space but more convenient and secure payment solutions are already available for businesses and customers.

DRIVEN by increased smartphone penetration and a rise in digital payments adoption, Asia is widely accepted to be leading in mobile payments globally. A study by Kantar TNS found that over half of connected consumers in the Asia-Pacific region use mobile to pay for goods and services via apps, compared to consumers in North America and Europe.

Consumers today are embracing e-payments in almost every aspect of their daily lives due to the convenience and speed they bring. This is made possible with the increasing array of solutions such as digital wallets, mobile payment apps and stored value cards. At the same time, there's increased awareness of going cashless as more governments in Asia drive the payments transformation.

With e-commerce expected to be worth around US$88 billion by 2025, the majority of fintechs in the region have made payments their focus. According to UOB, 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.

However, Asia remains a fragmented market in the digital payments space with varying levels of readiness as well as differing payment infrastructure and emerging technologies.


The tiny island driving regional digitisation

Singapore has consistently led in digital transformation both regionally and globally. It's no surprise that they are making headway in mobile payments given the government's push with its Smart Nation agenda. The country recently announced that starting next year, customers dining at coffee shops, hawker centres and industrial canteens (all of which make up a significant portion of dining locations in the country), can choose from all 20 payment schemes through unified touchpoints.

It's the first time the country is unifying behind an integrated system that provides options for consumers.

Across the country, there has also been a wave of e-banking and peer-to-peer electronic fund transfers rolled out by financial institutions in Singapore, which have been readily adopted by consumers.

Last year, the government introduced PayNow - a national real-time payment platform that allows individuals to send payments to each other across participating banks in Singapore with just a mobile phone or identity card number. This has since extended to businesses, government agencies and even social services organisations with the implementation of PayNow Corporate.

Earlier this year, several payment companies came together to develop a universal unified payment QR code SGQR to allow consumers to scan and transfer funds from as many as 27 e-payments apps. This was a win for both consumers and merchants. Consumers don't have to worry about not having options and merchants need not display multiple QR codes and payment options at their stalls.

China shows the way in the future of payments

China is leading the pack in the cashless game with the rise of digital wallets such as Alipay. With over 500 million users, Alipay is the most successful mobile payment solutions worldwide, driving the value of non-cash transactions in the country. Used for payments in online shops and at point-of-sale locations in China, the Alipay app includes functionalities which enable users to manage coupons and receive shop recommendations.

From a consumer's point of view, these platforms and services offer real added value that goes far beyond the convenient payment at the point of sale.

In addition, China has been the biggest proponent of the QR code, which has led to the growth of mobile payments as people increasingly use social media platforms such as WeChat to make transactions. Through one of Alipay's latest payment services (a collaboration with Wirecard), Chinese tourists can now pay with their smartphones while travelling overseas - without incurring currency exchange fees.


More and more companies are adopting payment innovation to turn cash into digital money in this online payment revolution. The scale and pace of digital transformation, however, varies across the region. Partnership and collaboration will be key to closing the gap between cash and cashless; and companies need to constantly reinvent their payments to cater to their customers.

Despite the advances so far, there's room for continued 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 highly 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-payments usage.

As more payment systems come to the market, there needs to be greater collaboration in the payments space to create a more inclusive environment for both merchants and consumers. Ultimately, it's about integrating all the different payment methods to provide a seamless and safe way for consumers to pay for their goods and services.


Providing a frictionless customer experience used to be the key differentiator some years ago. 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 the world of 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 technology (IoT) in their services are currently the latest sensation.

In Germany, T-Systems is one of the first to implement such a solution to simplify the customer retail experience. Similar to Amazon Go, the concept allows consumers to shop in a virtual environment and receive real objects delivered to their doors - eliminating long waiting times during the check-out process.

But even with the rise of IoT and mobile payments 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 of an app.

For consumers, it could mean the susceptibility to payment fraud due to day-to-day operations or a lost device. Merchants, on the other hand, need to ensure that transactions are processed in a secure manner.

Biometric payments will be key to counter these security concerns. The use of biometric authentications such as fingerprint, face or voice recognition are more secure than current practices and these biometric identification methods can help protect customers from unlawful purchases if their smartphone is stolen or when faced with malicious attacks by cybercriminals. While the introduction of these systems has taken off significantly due to mobile phone proliferation, there's still much more that can be done and businesses need to accelerate their adoption of such options for their consumers.

What we do know is that successful payment systems of the future must be uncomplicated and offer both customers and retailers real added value. Appropriate solutions are already available today that are far more convenient and secure than existing systems. In an increasingly competitive online business, retailers must therefore focus on integrating these new concepts that improve the customer experience. This will help retain customers.

Much of this lies in future-oriented technologies such as IoT-supported shopping and payment solutions which can help completely close the gap between online and offline trade and combine the advantages of the stationary shopping experience with those of online shopping. Appropriate solutions are already available on the market. The future of payments has begun.

  • The writer is executive vice-president, financial institutions, sales, Wirecard

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