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Asia Pacific leads the charge with alternative payments at the heart of eCommerce

October 20, 2017 Financial No Comments Email Email

Asia Pacific is at the forefront of a global trend toward increasing complexity in the online payments market; this is according to new report from leading payments company Worldpay, which has found that consumers across APAC increasingly prefer to pay online via alternative payment methods such as e-wallets, bank transfers and cash on delivery.http://www.tourismlegal.com.au/

In its annual Global Payments Report, Worldpay found that the Asia Pacific eCommerce market will grow by an average of 12% annually, and is set to be worth US$2,100bn by 2021[1].  Alternative payments are cementing their place at the heart of online shopping in this region – echoing a global trend toward fragmentation in online payments, as options like mobile wallets, pre-paid cards and bank transfers continue to steal market share from more traditional payment methods like credit and debit cards.

The Report found that in China – the world’s largest eCommerce market – most consumers prefer to pay with an e-wallet such as Alipay, Tenpay or WeChat Pay. E-wallets now account for 62 per cent market share in China. Meanwhile credit cards are currently the second most popular payment method for online shoppers (10 per cent), and bank transfers are set to overtake credit cards by 2021, increasing their market share to 14 per cent.

This growing preference for alternative payments can be seen amongst online Asian shoppers:

  • In Hong Kong, e-wallets are catching up to credit cards, and are set to make up more than a quarter of the online payments market (28 per cent) by 2021.
  • In Singapore, while credit cards are overwhelmingly the payment method of choice in 2017 (66 per cent market share), by 2021 both bank transfers and e-wallets are set to nearly double in share; from 11 per cent to 21 per cent% and 13 per cent to 21 per cent, respectively.
  • In Australia, bank transfers are set to overtake credit cards by 2021, increasing 23.3 percentage points to become the most popular payment method, with a whopping 43 per cent of the market.
  • In India, e-wallets (26 per cent) and bank transfers (24 per cent) are already the most popular payment methods, and by 2021 credit cards are expected to decline from 12 per cent to 8 per cent market share.

Phil Pomford, General Manager for Asia Pacific at Worldpay, commented: “Once again, Asia Pacific is at the forefront of emerging global trends, as consumers here lead the charge in demanding more opportunities to use alternative payment methods online. While there are significant variations in how consumers in different Asian markets prefer to pay, a constant is that they are shifting away from more traditional options like credit and debit cards, and instead choosing e-wallets, bank transfers and cash on delivery.”

He continued, “In order to keep up with changing market conditions and respond to varying consumer payment preferences from market to market, online merchants should support a wide range of payment options. By giving online shoppers the chance to pay via their favourite method, businesses will create a consistent, streamlined checkout experience which is capable of converting browsers into buyers and fostering long-term loyalty amongst local and cross-border shoppers.”

Worldpay has published a list of guidelines for merchants looking to capitalise on the eCommerce and mCommerce opportunity in the Asia Pacific region:

1)      One-click ordering: Consumers are more likely to shop more often with companies that save their payment details for one-click ordering. Merchants should provide one-click ordering to make online checkout as seamless as possible – especially via mobile apps.

2)      Consider the most popular payments methods in each territory, and prioritise those that complement your business model – there is no one size fits all in the Asia-Pacific region so you will need to understand the best options for your company.

3)      Cross-border trade: Merchants should ensure that they have local acquiring capabilities wherever they have a legal entity; offer a wide range of currencies at checkout; and consider local language customer support in their customers’ time zone to deliver a great customer experience.

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