Are we ready for Digital Payment Solutions, asks Saurabh Mathur of VMLY&R

Driven by increased smartphone penetration and a rise in digital payments adoption, Asia has been widely accepted to be leading in mobile payments worldwide. 

Over half of connected consumers (53 per cent) in the Asia-Pacific region use the mobile to pay for service apps and goods, compared to 33 per cent in North America and 35 per cent in Europe, as was showcased in a recent study done by Kantar TNS. 

India has always been a progressive country when it comes to adapting newer, better technology, and as a result, has adopted digital payments at an accelerated rate. The digital payment solution has been a game-changer for India when it comes to any financial transaction.

In other countries, convenience is prioritised, so digital payments are used to save the hassle of procuring physical money. Although physical cash still makes up for 85 per cent of retail payments worldwide, digital payments have triggered a spending revolution. 

This system has resulted in sellers offering more attractive packages when customers use e-payments. As per a research report by Credit Suisse, people prefer making digital payments primarily in the organized sector, and digital transactions are set to reach $1trillion by 2023. 

For digital marketing experts, this is a good opportunity to add touch points further down the funnel. With e-commerce becoming more widespread and the government pushing harder on digital payments, it has become extremely easy for consumers to use Unified Payment Interface (UPI) for payments. 

Digital marketers need to make the most of this by using channels like social media to drive sales, rather than just awareness. Social payments are the new advancement in digital payments as they provide the functionality of exploration and chat along with mobile payments on the same platform. This can help marketers set the path for the future of marketing online. 

In India, the internet user base is rising at an unprecedented rate and the integration of payment options in apps like WhatsApp will further increase this reach. WeChat in China has not only seen P2P transfers increase, but local brands are now designing campaigns specifically for the platform, enabling immediate transactions. 

Mobile internet companies, globally, are striving to make P2P payments quicker and easier. Mobile wallets, UPI and netbanking are the primary methods used for social payments. 

Additionally, Paytm, Tencent- and Foxconn-backed Hike Messenger, which claims 100 million users in India, also introduced payments on its messaging platform in January. While Facebook-owned WhatsApp has initiated a test phase for testing payments via UPI early this year, the feature is yet to be fully rolled out in India.

The real battle among these platforms is likely to be fought by WhatsApp and Paytm in India, since both platforms claim to have over 200 million users each. Stockholm-based Truecaller acquired Mumbai-based mobile payments start-up Chillr, marking its entry into the mobile payment landscape. 

It also claims to have over 150 million users in India. Digital payments have had a varied effect on marketing strategies depending on the industry. For instance, traditionally some categories moved to “plastic” money faster than others – retail, FMCG, CPG etc. However, even with the rise of IoT and mobile payment adoption, security is still a major concern amongst customers. 

A recent study highlighted that secure experiences are of foremost importance for Asia Pacific customers, with around 55 per cent of them prioritising security over convenience and functionality of an app. 
The solution to this is using biometric payments to counter these safety concerns. Biometric authentications such as fingerprint, voice or face recognition are more secure and can protect customers from unlawful purchases if their phone is stolen.

In a progressively more competitive online business, retailers and marketers must therefore focus on integrating new concepts that improve consumer experience. This will further help in retaining customers. Appropriate digital payment solutions are already available in the market and are just waiting to be used – the future of digital payment has already been activated.

(The author Saurabh Mathur is Head – Strategy Planning at VMLY&R.)

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com