Photo (IDG) - Tracking eCommerce
Malaysia's online shopping scenario is on the verge of an inflexion point, which is being powered by key disruptive drivers.
Chan Kok Long, who is executive director of regional payment gateway iPay88, said that based on findings from the company's online payment data local "eCommerce confidence appears to be soaring" and was at its highest level in the last five years.
The company currently represents close to 70 per cent of the country's entire eMerchant online payment system, said Chan.
He attributes the latest finding to two key drivers, which are supporting the increased user confidence. These are:
A. Technological: There are new solution innovations that make funds immediately available i.e. Real-time personal banking or overdraft application, and direct conversion of token/reward points - that increases consumers' online purchasing power.
B. Behavioural: Online shopping patterns towards higher value items such as automobile, property and professional services.
Changing eCommerce behaviour
Speaking of the technology driver, Chan said iPay88, an NTT Data company, was also currently working with selected partner banks to approve personal loans for online purchase.
"[With this move] we are emulating what Alibaba has been doing since mid-2015, which is to offer their customers financial loans based on their online shopping history," he said.
Some eMerchants were also starting to offer 'trial session' opportunities for higher value products in effort to lock-in more online orders of greater value, said Chan.
"Tesla (cars) are now being purchased online," he added. "Most car buyers only visit the dealership after they already know which vehicle they desire - the exact specifications, how much deposit they need to pay, or simply to test drive the vehicle. This simply makes it easier for eMerchants offering ready loans to quickly lock-in sale of high value products."
iPay88's data has confirmed that users have started to pay booking fee and down payment for purchase of vehicles and properties via online channel, said Chan.
Over the same period in 2015, the volume of payment for automobile and property related transactions have increased by 53 per cent and 39 per cent respectively in 2016.
Other findings noted that about 36 per cent of the total online transactions processed by iPay88 were from credit card payments while 64 per cent transactions were settled via online banking.
Between the both, the fraud rate recorded was higher at 87 per cent for online banking compared to 13 per cent for credit card.
However, Chan said that iPay88's fraud rate was lower than the market's average of 0.05 per cent. The (178) number of fraud cases reported in the company's online payment system in the current year represent 0.019 per cent of its total eMerchants.
Speaking of iPay88's fraud management strategy, he said, "We are extremely careful at the first-line-of-defence, which is at the eMerchant's account opening process. We use a multi-layered real-time approach to detect fraud at account opening and high-risk transactions. Transactions using iPay88's system are secured, consumers' interest are safeguarded and eMerchants' credibility are maintained".
While Malaysia was currently showing the highest state of online shopping confidence, Chan sounded a note of caution. "Use online shopping services and brands that are trusted, and also make more effort to learn more about the types and ways of how online scams happen. Meanwhile eMerchants should invest in mechanisms that can counter fraud effectively to retain the trust in your online brand and eStore. Focus on the finding the right balance between fraud prevention techniques (so that they are not too rigid to negatively affect your customers' shopping experience), while still being able to convert online visits to your website into sales."
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