New ACI Worldwide Survey Highlights the Future of Payments in Asia
Gen Y consumers in Asia Pacific demand more payment options in the age of the Shared Economy, according to new report from ACI Worldwide and IDC Financial Insights
Tuesday, September 22, 2015
Singapore — September 22, 2015 — ACI Worldwide (NASDAQ: ACIW) today released findings from an Asia Pacific study on the current state of digital payment adoption and how new internet-based services affect payment trends across Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore and Thailand.
Principle findings of this study include:
Faster and more efficient payments – The Shared Economy
- Findings across Asia Pacific highlighted that newer methods of payments with mobile platforms, such as smartphone wallets and online payment tools, are being driven by increasingly sophisticated Gen Y consumers aged 25-34 years old.
- Across the eight countries surveyed, 82 percent of respondents had used new digital payments.
- The top reason consumers use online payment services is to enjoy faster and more efficient payments (47%), followed by trust in online payments (21%) and better rates compared with other methods of payment (15%).
- The Shared Economy, which is built around the sharing of resources, is a major market driver in Asia Pacific. The top three ‘shared economy’ services across the region are taxi services, aggregated meal delivery and accommodations.
- Non-bank-led financial services, such as Alipay and WeChat Wallet, are disrupting emerging markets and challenging banks by becoming viable alternative payment methods, resulting in higher usage of online payment services (72.4%), smartphone wallets (32.8%) and mobile money (13.3%).
- Digital methods of payments are set to grow in tandem with shared economy services in Asia Pacific, especially for transactions where convenience, speed and seamlessness are valued. Examples of these transactions include taxi hire and car sharing services where 10 percent of respondents in the region are already paying for them with smartphone wallets.
“The region is rapidly moving toward real-time or immediate payments, driven by customers’ demand for faster and more efficient payments. Non-financial services have added to the dynamic competition, extending payments from online and mobile ecosystems into peer-to-peer payments within social apps such as WeChat and Line,” said Rachel Hunt, marketing director, Asia Pacific & Japan, ACI Worldwide. “Asia Pacific’s FSIs, processors and retailers will need to transform their payment infrastructures to support any-to-any payment flows and offer innovative value-added services in a secure environment to compete.”
“The rising behavioural complexity in the younger consumer demographic is driving a shift in digital payment methods, and the choice is no longer simply between cash and cards. We are seeing a rise in unique Shared Economy business models, and non-bank financial services are quickly experimenting with new mobile solutions to cater especially to unbanked populations in emerging markets,” said Leslie Choo, general manager & vice president, ASEAN & Greater China, ACI Worldwide. “Banks need to embrace these disruptions in order to innovate long-term winning strategies. We are entering a new era in payments, with developments focused on financial technology and customer experience that will shape our purchasing behavior on the mobile platform.”
Future payment trends
- The survey results across Asia Pacific point to the expectation for Gen Y consumers to drive further change in payments, with online payments and smartphone wallets showing a distinct skew toward Gen Y users (highest with 36.8 percent usage).
- Emerging markets have the potential to be a key force in driving new non-bank financial services, with these markets scoring higher in their intention to use new services on average (nearly twice as likely for smartphone wallets).
- The need for seamless and integrated payments within applications is crucial, given the increasing usage of Shared Economy services across Asia Pacific and a continued dependence on cash. Smartphone payments are very likely to replace cash as 62 percent of respondents were already showing a high intent to use in the future.
- The increased need for financial institutions to focus on security and real-time fraud management to safeguard the rising volumes of immediate and card-not-present payments for both the banked and under-banked in Asia.
- The need for greater collaboration in the payment ecosystem (banks, retailers, telco and fintech companies), as consumers diversify their payment behaviours (debit card (50.5%), bank transfers (50%) and online payment services (52.2%) used equally for online purchases on the desktop for Gen Y), to ensure that new methods of payments remain fast, seamless and secure.
ACI will be releasing the second part of the research findings in early October, focusing on the future of digital payments in Asia and how financial services will likely further evolve with changing consumer choices and payment preferences in Asia Pacific. The report can be downloaded at http://www.aciworldwide.com/campaign/2015/ap-digital-payments.
The survey was conducted with 2,000 respondents across 9 major markets of Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore and Thailand.
About ACI Worldwide
ACI Worldwide, the Universal Payments company, powers electronic payments and banking for more than 5,600 financial institutions, retailers, billers and processors around the world. ACI software processes $13 trillion each day in payments and securities transactions for more than 300 of the leading global retailers, and 18 of the top 20 banks worldwide. Through our comprehensive suite of software products and hosted services, we deliver a broad range of solutions for payment processing; card and merchant management; online banking; mobile, branch and voice banking; fraud detection; trade finance; and electronic bill presentment and payment. To learn more about ACI, please visit www.aciworldwide.com. You can also find us on Twitter @ACI_Worldwide.
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