Unlocking the Potential of Digital Payments
“Asia Pacific maintains its strong position in the payments market worldwide by showing its continuous revenue growth rate across regions,” according to Globe Newswire’s Asia-Pacific Mobile Payment Methods report (2022).
Payment mainstream had already changed before the pandemic, but this revenue growth was accelerated by adopting mobile and digital wallets as a COVID-19 pandemic after-effect. Additionally, the digital wallet has accounted for the region’s most commonly used B2C digital payment method for E-commerce or POS payments among debit/credit cards, electronic bank transfers, etc. However, the growth path of digital wallets differs greatly between countries.
For example, South Korea and China are heading towards becoming cashless societies, while Japan remains a cash-driven economy (Globe Newswire, 2022). Based on China UnionPay research, their 2021 Mobile Payment Security Survey report found that 64% of the overall population (903.6 million) paid their expenditures through digital wallet services. Meanwhile, 66% of South Koreans embraced mobile wallets and gradually removed paper-based payments such as cash or cheques and physical cards, (GlobalData’s Financial Services Consumer Survey 2021).
In contrast, Japan’s cash demand has continuously expanded during the pandemic even though large cities like Kanto (Tokyo), Kinki (Osaka), and Tokai (Nagoya) have shown increased popularity in the use of digital payments such as e-money or QR payments (Ministry of Internal Affairs and Communication, 2021). The reason why a significant portion of payments in Japan still come from cash may be the security concerns that society has when providing personal card information or the habit of keeping track of their spending (Jun Saito, 2021).
As a result, we have identified three key factors that a company should consider when exploring the potential benefit of digital payments.
Adapting the most frequently used digital payment methods in the region
According to Statista (2022), more than 50% of Taiwan’s population (16 million) used third-party payment apps, with Line Pay being the most popular, followed by Apple Pay and Google pay. Restaurant owners who analyze their customer’s payment behavior and accept mobile payments may find that their customer satisfaction levels and work efficiency are improved after adopting these new payment methods.
Innovation Needed for the next QR Payments Growth
According to the Mastercard New Payments Index (2022), “QR payments have gained traction in the APAC region compared to the rest of the world.” This finding emphasized that 63% of QR users stated that they were using this method more frequently than in the past. Juniper Research predicted in their recent (2022) study that the number of people using QR code payments will increase to over two billion by 2025. Inevitably, if your competitors are still experimenting with their platforms, QR payments will be advantageous to hospitality professionals and provide a richer experience for customers who can use digital vouchers, paperless menus, hotel solutions, and digital forms.
Address Customer online privacy and security concerns
The possibility of cyberattacks is the main reason APAC customers doubt their online personal data security. In 2022 Check Point Research 2022 revealed that the number of cyberattacks in Asia Pacific had increased by 168%. “The five markets with the largest increase are Japan (40%), Singapore (30%), Indonesia (25%), Malaysia (22%), and Taiwan (17%).” It identified the correlation between the number of digital payment users in diverse economies and the need for companies to increase their data security, especially during transactions. Taking hotels as an example, besides training their staff on information security, and ensuring that customer financial information is safely encrypted, they need to check whether their existing technologies meet all the current data standards.
HRS Payment Gateway Solution(HPG) is an innovative and secure payment integration with Oracle Payment Interface, supporting multiple modes of food and beverage and PMS operations, for an efficient and effective means of closing checks to international credit cards, domestic credit cards, electronic wallets and loyalty points. With over 50 payment partners globally and growing, HRS Payment Gateway has a broad market coverage and can support many localized payment solutions.
Wilkins Yeung
HRS Area Sales Director of North Asia
