Reasons behind the growth of online payment services in sea

Reasons Behind the Growth of Online Payment Services in SEA www.paymentasia.com

Overview Young millennials in SEA are just the kind of customers that commercial bankswill covet. At a very young age, they already have a bank account and debit card and will soon be in the market for loans and other investment products. They usually also have e-wallet apps on their mobile phones and make full use of online payment services owing to the convenience it provides.

The Trend So Far SEA is experiencing a financial revolution in the way monetary transactions are carried out.

It is conservatively estimated that around 49% of urban consumers use e-bank payment for SEA. Going by earlier trends, this figure is estimated to reach about 84% by 2025. However, in the wake of the COVID-19 pandemic, there is a sharp rise in online payments and home delivery services. This trend is still in its nascent stage but is well poised for quick growth.

Key Focus Areas There are several unmet needs which, if met, could unlock the full potential of digital finance in SEA. Currently, the focus has been on food delivery to homes and offices and transportation. But there is a strong interest among the urban youth to use online payment services for hawker stands and grocery stores as well. There is, however, very low acceptance by merchants as many of them are wary of digital currency and the high fees. If these are addressed, more merchants will be willing to adopt this technology.

Digital Payments – The Critical Battleground Digital disruption has made its mark in history. China and India account for about 70% of all e-wallet users for online payment services. Developing countries are the forerunners in the digital payment revolution. Credit card acceptance is slowly declining as merchants resist them for their high fees. Paying with cash is inconvenient. Finding an ATM may sometimes be difficult in some areas. COVID-19 is expected to increase the number of SEA households in embracing digital payments. E-wallets are a safer means of making purchases.

Consumers are expected to reduce their visits to crowded places such as restaurants and grocery stores. Digital payments represent the most frequent source of customer engagement. It is also a great source of data on customer preferences, interests and purchasing behavior. Using this data, institutions can customize innovative, immersive and convenient payment solutions.

The Way Forward SEA is emerging as the next global hotspot of this financial revolution and the race for competitive advantage has begun. To achieve scale and build a sustainable and profitable business, the financial institution must penetrate markets beyond prosperous urbanites and must convince people to use online payment services such as e-wallets for a wider range of purposes and build greater merchant acceptance. This will take digital finance to the next level.

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