APAC’s Newfound Love for Mobile Wallets
The concept of “currency” has evolved at a rapid pace in recent years.
Credit cards were introduced just over half a century ago, and today, we simply tap our contactless cards or scan QR codes in order to purchase an item or transfer. Businesses that accept cryptocurrencies are on the rise, and the days of physical cash is becoming a thing of the past as the ‘cash-less’ movement is well underway.
In fact, Asia is a step ahead when it comes to adapting to a new form of transaction platform, which features a cashless mobile wallet payment system, which has become popular in China. Cash or credit cards are now rarely used in urban areas of China where according to a recent study, 98% of people with smartphones use mobile wallets such as Alipay and WeChat Pay. Union Pay and credit cards are losing their share, as mobile cashless payment with QR code is making rapid growth in day to day life. Restaurants, grocery stores, and even street vendors all have designated QR code readily available to receive payment via mobile wallets.
In contrast, Japan, is in fact still a very cash-dependent nation, however over the last 12 months, it has begun undergoing a major transformation with strong backing from the government to promote a cash-less society in time for the 2020 Tokyo Olympics. PayPay, a Softbank/Yahoo! Japan backed mobile wallet payment system in collaboration with Alipay, has become a household brand nearly overnight when they launched a 10 Billion JPY (US$ 90 Million) giveaway campaign right before the holiday shopping season. Users simply received 20% of their total spend back with PayPay credit for all purchases until the 10 Billion JPY cap was reached amongst all users. LINE, the renowned mobile communication platform followed suit by promoting LINE Pay with 20% credit back campaign but with a cap in total rebate amount per user. Dozens of mobile cashless payment platforms are now competing for their market share in Japan, although its fair to say that PayPay has won the brand awareness race by long shot.
All of this means user experience is more important than ever, and these days it isn`t just about the website speed or onsite browsing experience, but also involves the transaction process itself. How often were you turned down to purchase something online when your preferred payment method was not available? Even if you offer a competitive price in the market, if a specific payment system is not offered on a brands website, you are at risk of losing a large percentage of your potential customers.
With a major global transformation in the payment process, e-commerce must keep up. In an already complex market, with specific transaction systems it is no doubt that the coming years will see further evolution in e-commerce transaction processes across the globe. Major e-commerce platforms in Japan such as Yahoo! Shopping and ZOZOTOWN have already announced the integration of the mobile wallet payment in 2019. Alipay and WeChat Pay are already accepted across major e-commerce sites in China such as Taobao and Tmall. Kakao Pay, Samsung Pay, Payco and Naver Pay are widely accepted across e-commerce sites in South Korea.
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