Why localisation is the key to unlocking long-term growth in APAC


Kristian GjerdingCEO of Digital CellPointexplains how understanding the diverse financial habits and consumer preferences in Asia-Pacific can help create relevant payment experiences.

Across Asia-Pacific, the buzz around alternative payment methods has grown exponentially. Some recently published research contains interesting results for any business seeking information on consumer financial habits and payment method preferences in seven APAC countries (India, Indonesia, Japan, Malaysia, Singapore, South Korea , Taiwan and Thailand).

The research results, which include the frequency of purchases through online and physical channels, consumer attitudes towards new financial and payment technologies, and preferences for payment methods, indicate an increase in methods payment methods (APM). However, each APAC country differs significantly, and creating truly seamless checkout experiences means understanding those differences. Traders should be prepared to personalize the experience, determining which solutions will make the biggest splash in each market.

APAC Unboxing: Markets on the Move

It is fair to say that there is strong growth in digital payment adoption across APAC. However, examining the search results by country reveals a more complex picture.

International spending, for example, varies widely. In Singapore, 60% of people shop cross-border. In South Korea, it’s 50.4% of consumers, while in Thailand 50% of respondents prefer international shopping. In India, cross-border spending accounts for 74% of total online sales. This contrasts with Indonesia, where only 4% of people have international credit cards and often have preset debit cards that disable online payments to prevent fraud.

A remarkable finding, however, is the burgeoning appetite for innovation and new technologies in developing markets. This, in fact, is higher than in other APAC markets.

Some statistics challenge Western assumptions about the digital literacy of APAC consumers – and we should welcome the opportunity to remove these biases as we prepare solutions for these markets. For example, only 37% of consumers in Japan would say they are ‘tech-savvy’ or ‘seek out smart solutions’. This rises to at least 70% of consumers in Malaysia, India, Thailand and Indonesia.

This is perhaps more surprising given that smartphone penetration and internet connectivity remain higher in developed APAC countries. Smartphone penetration is 22% in India, while internet penetration is 50%. In Japan, smartphone penetration is 46.8%, while internet penetration has reached 90%.

A new path for emerging economies

At least one more general statement can be applied to consumer payment preferences in APAC: there has been a dramatic shift towards e-wallets and bank transfers, which was likely driven by the pandemic. Even in a card-first market like Singapore, e-wallets and bank transfers like PayNow are preferred by 42% of consumers.

In India, although Visa credit cards remain a popular payment method, with 83% of people saying they used it in the month before the survey, it was overtaken by Paytm. Paytm is a digital/mobile wallet used by 85% of India’s surveyed population, making it the most popular payment method in the country.

Similarly, in Indonesia, the OVO e-wallet was the most popular payment method at 69%, followed by debit cards at 67%. In Japan, credit cards remain the most popular payment method, while the Paypay e-wallet ranks fourth among countries. Over-the-counter species, such as Konbini, are highly preferred and rank second.

This underscores the revelation that more developed countries, which adopted cards long ago, have been slower in adopting APMs. Emerging economies are doing something new; they are bypassing the card stage altogether in favor of finding other ways to pay online and adopting APMs. Remember, these are the countries where respondents said they are hungry for innovation.

What does this mean for traders?

Obviously, a blanket approach to payment solutions for APAC consumers can never work. Traders face a potential quagmire of actively used APMs in the region, and the costly challenge of integrating them. Payment orchestration is an essential piece of the puzzle. According to PYMNTs, the global market for payment orchestration platforms is also expected to grow by 20% annually between 2021 and 2026.

Merchants may be stunned to learn, or already painfully aware, that 44% of consumers abandon a purchase if their preferred payment method is unavailable, which rises to 51% for millennials.

As this research confirms that in APAC almost all consumers (94%) would consider using an APM in 2022, an in-depth understanding of the diversity of consumer preferences is essential to help merchants build payment systems on measure. By integrating the most relevant APMs for a given market, payment orchestration can dramatically improve customer experience, increase brand loyalty and conversions, and enable merchants to succeed in every region.

About Kristian Gjerding

Kristian Gjerding is CEO of CellPoint Digital and held leadership positions at Network Appliance and Sun Microsystems before co-founding CellPoint. A skilled payment and commerce orchestration professional, he has a background in business-critical technologies as well as payment orchestration platforms and is a frequent speaker at airline, financial services, and industry events. and retail.

About CellPoint Digital

CellPoint Digital is a fintech leader in payment orchestration. Its core solution, Velocity, is a payment orchestration platform that optimizes digital payment transactions and accelerates the deployment of new payment options. Merchants can easily scale their own payment ecosystem across the globe, unify customer payment experience across their website, mobile apps and other channels, optimize the routing of every transaction, increase conversion rates and minimize payment costs.

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