Navigating the new norms of payments for businesses across Southeast Asia
By Wenhui Yang, GM, UnionPay International Southeast Asia
There is no doubt that the unfolding of the global public health crisis today has had widespread impact on economies, businesses and almost all aspects of our lives, on a scale that we have never seen before. However, amidst the gloomy repercussions felt at various levels of the society, the payments industry as a whole is encouraged to see a silver lining in the acceleration of digital payment adoption during this exceptional time.
Over a year ago, when we first released The Future of Payments Study conducted by UnionPay International in partnership with Nielsen on 400 mobile payment users in Singapore, we found that cash was clearly king across all consumer segments. Not only was cash the most popular mode of payment used by over nine in 10 (94%) respondents, it was also one of the most frequently-used payment modes.
However, in light of the recent developments as a result of the global pandemic, we may well see an accelerated shift from a predominantly cash-based to a cashless society as more people adopt digital payments as part of society’s “new norm” to minimise physical contact and contamination through the exchange of cash.
With increased adoption of digital payments poised to continue as the public health situation runs its course in the foreseeable future, it is important for businesses to get a better understanding about the benefits of digital payments, in order to take active steps towards integrating into their processes and operations in the long run.
Enabling public health and safety amidst today’s uncertainties
Since the beginning of the outbreak, the World Health Organization has encouraged the use contactless payments. With new information being uncovered about the virus each day, it is important to minimise physical contact and exposure to potential carriers, to prevent the spread of the virus. In the payments world, this means reducing the use of cash and cards that require physical exchanges between parties, while opting for contactless forms of payment instead.
Closer to home, the Monetary Authority of Singapore (MAS) has been urging businesses to use digital finance, working closely with The Association of Banks in Singapore (ABS) to promote greater e-payment adoption. To accelerate this push, the SG Digital Office was set up to drive digital adoption in the community and encourage stallholders from hawker centres and wet markets to adopt SGQR* for e-payment. While these initiatives may have started with the aim of enabling collective public health and safety, going cashless has now spurred greater digital adoption for businesses across sectors.
Businesses to reap the full benefits of digital payments
Besides enabling public health and safety by doing away with the need to handle cash, digital payments modes such as mobile contactless payments and mobile QR payments also streamline the payment process and shorten payment processing times. This allows businesses from smaller convenience stores to major supermarket chains to speed up payment processes while preventing long queues at checkout counters. In addition, the back-end processing of payments is also greatly streamlined, doing away with the need to consolidate cash totals and physically bank in cash in daily operations.
Secondly, cross-border payment can be simplified digitally. With limited business travel to select cities in China already given the green light to resume, it pays to plan ahead for the future when restrictions on leisure travel ease further in time to come. Global payment networks such as UnionPay offer mobile contactless payments in 49 countries and regions, and mobile QR payment options in 33 countries and regions, allowing merchants in destination markets to expand their customer base by catering to visiting tourists from overseas.
Thirdly, digital payments add a layer of security to ensure safe and smooth transactions. Global payment companies with vast networks of users and merchants have a vested interest to ensure the security is top-notch. As such, extensive efforts are in place to ensure that all transactions adhere to the system-safety management and data-safety management guidelines of local regulators, with security measures being continuously updated in response to the ever-changing global security landscape.
Lastly, digital payments allow for greater transparency. Each transaction made has a digital footprint that can be easily tracked by businesses. By going digital, businesses can keep track of each transaction made locally and overseas. With a full view of expenses, business can then make informed decisions for their business strategies.
Collective effort needed
Even with rising digital payment adoption in the midst of today’s public health crisis, there is a need for greater collaboration among payment industry players in order for business and individuals to reap the full benefits of digital payments.
Network payment companies should continue to deepen partnerships with banking institutions, regulators, businesses and individuals to create a sustainable and safe environment for digital payments, while the industry as a whole should work together to enable easier adoption of digital payment methods through unified standards for digital payments.
To highlight a case in point, Singapore’s SGQR initiative has brought about greater clarity for merchants and ease of payment for consumers while enabling interoperability across multiple QR payment systems, and we hope that more of such examples will become a reality in time to come.
The shift to cashless society is not going to stop when the public health situation eases. In fact, as we learn to navigate the new norms of payment, businesses should evaluate the benefits of adopting digital payments for themselves in order to integrate it into their daily operations. At the same time, with new forms of digital payments emerging, it is also crucial for everyone to keep an open mind and continue to embrace new forms of payments. Only by this can we move forward collectively as a society towards a truly cashless future, and to realise our Smart Nation vision.
There is no doubt that the unfolding of the global public health crisis today has had widespread impact on economies, businesses and almost all aspects of our lives, on a scale that we have never seen before. However, amidst the gloomy repercussions felt at various levels of the society, the payments industry as a whole is encouraged to see a silver lining in the acceleration of digital payment adoption during this exceptional time.
Over a year ago, when we first released The Future of Payments Study conducted by UnionPay International in partnership with Nielsen on 400 mobile payment users in Singapore, we found that cash was clearly king across all consumer segments. Not only was cash the most popular mode of payment used by over nine in 10 (94%) respondents, it was also one of the most frequently-used payment modes.
However, in light of the recent developments as a result of the global pandemic, we may well see an accelerated shift from a predominantly cash-based to a cashless society as more people adopt digital payments as part of society’s “new norm” to minimise physical contact and contamination through the exchange of cash.
With increased adoption of digital payments poised to continue as the public health situation runs its course in the foreseeable future, it is important for businesses to get a better understanding about the benefits of digital payments, in order to take active steps towards integrating into their processes and operations in the long run.
Enabling public health and safety amidst today’s uncertainties
Since the beginning of the outbreak, the World Health Organization has encouraged the use contactless payments. With new information being uncovered about the virus each day, it is important to minimise physical contact and exposure to potential carriers, to prevent the spread of the virus. In the payments world, this means reducing the use of cash and cards that require physical exchanges between parties, while opting for contactless forms of payment instead.
Closer to home, the Monetary Authority of Singapore (MAS) has been urging businesses to use digital finance, working closely with The Association of Banks in Singapore (ABS) to promote greater e-payment adoption. To accelerate this push, the SG Digital Office was set up to drive digital adoption in the community and encourage stallholders from hawker centres and wet markets to adopt SGQR* for e-payment. While these initiatives may have started with the aim of enabling collective public health and safety, going cashless has now spurred greater digital adoption for businesses across sectors.
Businesses to reap the full benefits of digital payments
Besides enabling public health and safety by doing away with the need to handle cash, digital payments modes such as mobile contactless payments and mobile QR payments also streamline the payment process and shorten payment processing times. This allows businesses from smaller convenience stores to major supermarket chains to speed up payment processes while preventing long queues at checkout counters. In addition, the back-end processing of payments is also greatly streamlined, doing away with the need to consolidate cash totals and physically bank in cash in daily operations.
Secondly, cross-border payment can be simplified digitally. With limited business travel to select cities in China already given the green light to resume, it pays to plan ahead for the future when restrictions on leisure travel ease further in time to come. Global payment networks such as UnionPay offer mobile contactless payments in 49 countries and regions, and mobile QR payment options in 33 countries and regions, allowing merchants in destination markets to expand their customer base by catering to visiting tourists from overseas.
Thirdly, digital payments add a layer of security to ensure safe and smooth transactions. Global payment companies with vast networks of users and merchants have a vested interest to ensure the security is top-notch. As such, extensive efforts are in place to ensure that all transactions adhere to the system-safety management and data-safety management guidelines of local regulators, with security measures being continuously updated in response to the ever-changing global security landscape.
Lastly, digital payments allow for greater transparency. Each transaction made has a digital footprint that can be easily tracked by businesses. By going digital, businesses can keep track of each transaction made locally and overseas. With a full view of expenses, business can then make informed decisions for their business strategies.
Collective effort needed
Even with rising digital payment adoption in the midst of today’s public health crisis, there is a need for greater collaboration among payment industry players in order for business and individuals to reap the full benefits of digital payments.
Network payment companies should continue to deepen partnerships with banking institutions, regulators, businesses and individuals to create a sustainable and safe environment for digital payments, while the industry as a whole should work together to enable easier adoption of digital payment methods through unified standards for digital payments.
To highlight a case in point, Singapore’s SGQR initiative has brought about greater clarity for merchants and ease of payment for consumers while enabling interoperability across multiple QR payment systems, and we hope that more of such examples will become a reality in time to come.
The shift to cashless society is not going to stop when the public health situation eases. In fact, as we learn to navigate the new norms of payment, businesses should evaluate the benefits of adopting digital payments for themselves in order to integrate it into their daily operations. At the same time, with new forms of digital payments emerging, it is also crucial for everyone to keep an open mind and continue to embrace new forms of payments. Only by this can we move forward collectively as a society towards a truly cashless future, and to realise our Smart Nation vision.
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