iPay88 sees the future of a cashless society being built in a major way in 2018. The move towards going cashless will be spearheaded by the growth and adoption of eWallets and the adoption of new technologies that will make e-payments more secure and trustworthy.
Consumers are moving towards online and cashless transactions
The growth of online and cashless transactions continues in Malaysia. The company reported an exponential increase in online transactions from 38.2 million in 2016 to 58.5 million in 2017. A record 150% increase year-on-year. Sales volume also increased from RM3billion in 2016 to RM6.6billion in 2017.
The increase in both transaction number and sales value was attributed by iPay88 to the increase in legislation and government oversight which enabled the proliferation of alternative payment methods (APMs) in the past year. Also contributing to the increase is the increase in the adoption of smartphones and also internet availability. These factors allow online marketplaces to grow and increase the number of consumers who have access to it. However, it is important to note that the increase in the number of users can also be attributed to the introduction of legal measures to hinder and govern the use of personal data. Consumers have become more trusting of online transactions because of this and are more willing to spend their hard-earned money using online platforms and ePayment solutions. Mr Tohru Yoshioka, Executive Director of iPay88, also noted that the user experience for online banking and payment platforms are also a large factor. In fact, he praises Malaysian banks and eWallet platforms for making their user experience (UX) one of the simplest and easiest to navigate in the region.
Mobile transactions lead the way to a cashless nation
Consumers are continuing to move away from desktop transactions to mobile. Increased trust in mobile platforms and online marketplaces are attributed to the increase. Mr Chan Kok Long, Executive Director and Co-Founder of iPay88, also draws a link between the increased proliferation of internet-enabled smartphones in Malaysia to the increase. He noted that the use of feature phones has drastically dropped highlighting that an increasing number of people are opting for more premium smartphones which are better equipped for online transactions.
Transactions on desktop were on par with mobile in 2016. In 2017, however, mobile transactions far surpassed the number of desktop transactions performed. In Q4 alone, the number of transactions on mobile were about 300% that of those done on desktop.
This trend is expected continue in 2018 with desktop dropping further while mobile continues to lead the way. With mobile device proliferation continuing to increase in 2018, According to a 2017 comScore survey, digital users between 15-24 years mainly access the internet via their smartphone while those in the 24-35 age group were more likely to be multi platform. With this in mind, it comes as no surprise that mobile will become a platform of choice for consumers moving forward.
“iPay88 is taking advantage of this trend by continuing to plan for more ingenious and easier payment applications that can be downloaded and utilized via the smartphone – for both seller merchants and buyer consumers…”
– Mr Chan Kok Long,Executive Director and Co-Founder of iPay88
Credit Cards are falling behind Online Banking
An interesting take away from the data from iPay88 was the increase in popularity of online banking platforms compared to that of credit cards. In 2017 alone, the number of online banking transactions were close to double that of credit card transactions.
iPay88 attributed this to the absence of credit terms and interest in online banking transactions. The increased adoption of mobile applications for online banking also contributed to this. That said, one of the most important factors highlighted was the fact that online banking is available to all consumers while not everyone had access to credit cards.
“It is not to say that credit cards are becoming obsolete for online payment and shopping in Malaysia. However, the choice of online banking is more attractive now and it is also generally positive because it advocates the habit of spending what you have in the bank, rather than buying on credit,”
– Mr Chan Kok Long,Executive Director and Co-Founder of iPay88
While credit cards continue to be an important component to online transactions, the oversight of Bank Negara to discourage overspending among Gen X has cultivated a positive, “spend what you have” culture according to iPay88. That said, with the expected increase in the number of eWallet and e-payment applications and platforms, it is expected that the number of credit card transactions is expected to show little growth or stagnate in 2018.
Businesses need to respond positively and adopt big data for growth
The continued shift of consumers towards mobile and e-payment platforms poses a threat and opportunity to businesses depending on how they respond to it. With an increasing number of eWallets and e-payment methods expected to enter the Malaysian market, business must adapt to survive.
The adoption of big data solutions and machine learning will continue to be a way for businesses to react to the adoption of eWallets and e-payment among consumers. In fact, it will be one of the best ways for businesses to maximise adoption. These solutions will enable businesses to collect and make sense of data from transactions allowing them to better target and cater to their customers. Personalisation is how businesses will be able to create that personal rapport with their constituents and data is king when it comes to it.
This also necessitates that business owners be open to adopting payment platforms such as SamsungPay, FavePay, AliPay and other platforms which will soon be available. The quicker they adopt these technologies, the faster they will be able to capture a segment of the market which is quickly becoming cashless.
Businesses will also see an increase in regulation and legislative oversight when it comes to dealing with cashless, mobile and e-payments. But this shouldn’t be seen as a hindrance to their growth. The data has shown that the increase in oversight and policies has led to an increase in trust from consumers which will inevitably lead to an increase in transactions.
Also published on Medium.