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Trust is key in boosting online payment adoption: Akamai

Nurdianah Md Nur | April 23, 2015
Ensuring a good customer experience throughout the entire online shopping process can increase the level of customer confidence, which may translate to sales, said Jason Miller of Akamai.

Jason Miller of Akamai
Jason Miller, Chief Strategist of Commerce at Akamai Technologies 

According to a report by AT Kearney and CIMB ASEAN Research Institute, the online retail market in ASEAN is worth an estimated US$7 billion in 2013. However, the majority of e-commerce payments is made via cash-on-delivery (COD) as consumers are reluctant to believe that online transactions are safe. In an exclusive interview, Jason Miller, Chief Strategist of Commerce at Akamai Technologies, provided tips to help retailers encourage consumers to adopt online payment methods, and to further propel the growth of e-commerce in Southeast Asia.

What are the factors driving the popularity of COD in this region?
There are several factors that contribute to the use of cash over the many non-cash alternatives; the two primary drivers are trust and ease of use.

Trust is an essential part of demonstrating to customers that retailers are using proper security protocols and that card and personal information stored with the retailer will remain safe.

Ease of use requires both a simple intuitive way to collect payment data and a payment system that is backed by a robust infrastructure across the region.

What are the advantages that online payment methods have over COD?
An immediate benefit of online payment compared to COD is the decrease in direct costs to retailers in the form of additional manpower, logistics planning and inventory management. With online payments, the entire transaction can be done online in an automated way, eliminating the cumbersome process of taking the order and sending a courier to deliver the goods to collect payment. Moreover, online transactions means that payment as well as product delivery can be tracked and transactions can be automatically recorded in a much more efficient way for retailers.

The simplicity that comes with online payments shortens the time taken to complete an order. For the retailers, this means more sales in a day without the logistical and manpower nightmare, streamlining the process of the consumer's online shopping experience. For the consumers, this speedy process of completing the purchase online within minutes, leads to faster product delivery and more competitive pricing.

How should retailers in SEA encourage consumers to use online payment methods? What sort of tech investments/deployments do organisations have to undertake?
To encourage consumers in Southeast Asia to use online payment methods, it is necessary for retailers to first establish a sense of trust. The customers need to trust that the information they share is safe and they also need to know that the product or service will meet their expectations. If customers don't feel confident in the product presentation, COD is a way to ensure they can refuse the item, which wastes the customers time and increases costs to retailers. 

 

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