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Asia Pacific’s new sharing economy

Leslie Choo, General Manager & Vice-President, ASEAN & North Asia, ACI Worldwide | Nov. 3, 2016
The need for seamless and secure cross-border payments within mobile applications is crucial, given the increasing usage of shared economy services across the Asia Pacific region.

This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.

Mature merchants embracing the sharing economy

The sharing economy, built around the sharing of resources, is an emerging concept gaining mainstream attention through Internet-based giants including Uber and Airbnb. Asian companies are pulling in their weight with Malaysia's Grab (for logistics) and Singapore's Roomorama (for accommodations). PricewaterhouseCoopers sees the industry growing from US$15 billion (S$20 billion) today to a whopping US$335 billion (S$450 billion) by 2025.

In Asia Pacific alone, respondents in a Nielsen survey are more receptive than other regions, with the highest percentage of 78 percent willing to share their own goods, and 81 percent willing to rent from others. In collaborative marketplaces disrupting traditional merchant-buyer relationships, anyone can transport passengers in his own car, and then later order a meal delivery from someone else.

While the sharing economy creates variety and new consumption habits, there is still demand for reliability from trusted retailers with expertise in various aspects from the manufacturing of goods to service delivery. How can customers' payment details remain digitally secure? What can merchants then do to remain competitive in Asia Pacific's changing retail landscape?

What retailers need to note

To stay ahead in this era of disruption, Asia Pacific's merchants must provide both card and card-not-present payments for consumers on the go. They must also not be afraid to explore mobile payment capabilities to welcome the rise of mobile commerce. There has been growing consumer interest with 72.4 percent of Asia Pacific respondents in an IDC survey having used online payments, and 82 percent stating their intention to do so in future.

Customers in mature markets (i.e. Singapore, Hong Kong and Australia) exhibit stronger levels of card adoption. Many of their traditional brick-and-mortar establishments would already have card-friendly Point of Sale (POS) systems. Where countries have stricter regulations on funds stored in digital wallets, cards will remain as a reliable payment mode. Big-ticket purchases such as flights, accommodation and electronics often involve large sums that customers are less willing to transact on mobile. Such scenarios are better suited for credit and debit cards to provide better protection and security guarantees.

Having that said, the "under $50" transaction space presents more room to experiment with card-not-present solutions. Newer proximity-based options such as Near Field Communications (NFC) may soon displace the physical swiping of cards. Mature Asian markets are expected to tread similar paths with Western economies when embarking on mobile payments. Google's Android Pay recently made its Asian debut in Singapore. As fertile testbeds for the latest digital wallets, these markets are maximizing their potential as mobile payment leaders in the region.


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