What makes payments data different from other types of data that marketers have at their disposal? WARC Asia Editor Rica Facundo speaks to Priyanka Gargav, Head of Commercial, SEA and Hong Kong at Adyen about the payments revolution in Southeast Asia and how the financial technology platform is changing how brands approach its marketing strategy.
This article is part of a Spotlight series on e-wallet marketing in Southeast Asia. Read more
- E-wallets are the front-end interaction with the customer and for marketing, each cashless payment can be an insight.
- When customers provide data, they expect brands to remember who they are and give the right personalised experience.
- The payments revolutions will change how marketers think about loyalty and they must now consistently interact with consumers.
Give us an overview of the e-wallet category in Southeast Asia. What has enabled mass adoption?
There is a combination of three factors that has enabled e-wallets to take off in the region: a very good mobile network or high penetration of mobile devices, government initiatives, and merchant acceptance.
This is what first happened in China and now in many other Southeast Asian countries. China has skipped an entire cashless payment method of credit cards and gone straight to Alipay and WeChat Pay. And today, if you’re travelling to China and carrying cash, merchants will not want you to shop from them.
Because of the pandemic, this has also come out very strongly in Southeast Asia. The 2022 Adyen Retail Report said that a majority of customers in Singapore and Malaysia now use cashless as their primary payment method during the pandemic and that is a very significant change from what it used to be.
How does the use of e-wallets vary across the region?
Six out of 10 people in Southeast Asia are either unbanked or underbanked. The launch of e-wallets allows them to be part of the new digital economy that is taking over the region. The use cases vary per country, but the change is undeniable. It is expected that the usage of these will grow three-fold in the next five years in Southeast Asia.
In Malaysia, consumers pick up e-wallets because they have been seeing promotions, cashback offers and government grants for COVID-19 being given out through these wallets. Now a majority of the customers are expecting merchants to allow the consumer to pay by e-wallets. It’s the reverse in Singapore because there is still very wide usage of credit cards. So the top expectation in Singapore is for merchants to accept credit cards but also offer other options. Whereas in Malaysia, it’s the opposite – they are expecting digital wallets to be a main payment option.
How does the payments revolution in Southeast Asia shift the way brands think about their marketing strategy?
E-wallets are becoming more about the front-end interaction with the customer, than a stored value source. This is why, for marketing, the untapped potential is how each cashless payment can be an insight. In our Adyen retail report, we saw that globally three out of four consumers want to go cashless. But only one out of three merchants said that they use insights from payments.
This is such a goldmine waiting to be explored. If unified commerce is a reality, where marketers no longer have to think of online and in-person payments as separate, then the retailer can have a single source of truth. This can help customise and personalise the experience for the consumer.
Can you give examples of brands who are using payments as a single source of truth for their marketing efforts?
Raffles Hotel Singapore, which is one of our clients, uses the exact same payment solution across all of their touchpoints. So whether a consumer is having a drink at the bar or booking a wedding venue, it’s the same interaction.
This is important for a brand that has a lot of VIP guests. It enables the brand to protect the data – by storing and tokenising it – so that in the future they can pull back the card data from Adyen in order to charge you. It allows them to have a seamless experience for the consumer, while being able to protect the data that they have.
It sounds like a payments solution acts as the “synapse” in an omnichannel journey, which is why it’s so potentially powerful for marketers.
Absolutely. Dunkin’ Donuts in the US does this. No one wants to carry a clunky loyalty card anymore because their wallet is not big enough and they have no space. And their phone is full of apps.
So, if you are a returning customer and they recognise the credit card there is a token which gets sent back. The brand recognises that you have made another purchase and that adds more loyalty points.
From a retailer’s point of view, what consumers expect once they have given you the details is that it is stored securely and safely. And when they come back, they expect brands to remember who they are and give them the right personalised experience.
This is also happening in Southeast Asia. Uniqlo and Love Bonito are great examples, where they are starting to put together all the different payment channels into one. I can order online and if it doesn’t fit, I can return it offline in the store. And all of this is possible because the brands are using the insights that they are gathering during the shopping process.
What’s another aspect of marketing that the payments revolutions will influence?
It will change how marketers think about loyalty. Previously, the onus used to be on consumers to ensure that they receive their loyalty points but now no one bothers anymore. Now, in order to stand out, brands must be able to consistently interact with the consumer across channels, day and time.
So there is the case of making loyalty easier, so that the consumer doesn’t have to put that extra bit of effort. Having a unified commerce stack and powering it through a single payment stack as well can really drive that.
Talk to us about the cross-border opportunities enabled by digital wallets. How can marketers take advantage of this?
This is something that we’ve seen over the last several years. As e-commerce grows, cross-border becomes more important. And now there’s room to talk about cross-border in a wider sense.
Luxury fashion houses are familiar with this concept because retailers wanted to cater to Chinese customers who don’t always use credit cards. That is why a lot of these retailers had to start accepting Alipay and WeChat Pay.
That is cross-border commerce from the perspective of travel. But now let’s look at what this means for e-commerce. Imagine being able to shop for a Chinese brand on Amazon Japan, while having it delivered to Singapore.
This means that today’s consumers are buying what they want from wherever they want. What this means for marketing is that the competition is tougher than ever. So the user experience has to be completely seamless. And for that to happen, the user experience on all fronts – from the checkout to how the website actually puts the products together and the payments – has to be completely seamless.
How does Adyen help merchants take advantage of this growing opportunity in e-wallets?
I think of us as a curator. There is so much happening in this space and sometimes it’s a bit too much. The real challenge is not enabling everything but enabling those payment methods which are in line with the user experience that you want to provide your customers with.
What are some pointers you can give to marketers on how to think through this user experience?
It varies per category and who your consumer is.
For example, not everyone is going to use e-wallets at McDonalds. However, a particular McDonald’s branch might need GrabPay because there are a lot of students who go there and they use GrabPay or PayNow.
It’s also different based on who the shoppers are. Are they tourists or students? Are they most likely going to be shopping online or looking online then shopping offline? All of these criteria need to be taken into consideration when you are putting the right payment methods in place.
Creating a seamless experience is undoubtedly important but can you break down what that looks like across different categories?
Let’s first talk about fashion. The shopping experience on Shein is seamless. The brand does a great job at curating exactly what you’re looking for and having the right kind of merchandise at the right price. But additionally, it is a truly seamless checkout. They tokenise the card, which is then saved, and then one click and you’re out. That is a seamless experience that makes it easy to shop, return and keep doing it on a regular basis.
But let’s take a more complex experience in the food category where you are starting a journey from offline.
Imagine that it’s almost lunch time. I want to go out for lunch but I won’t be able to end my meeting on time and I’m really hungry. So I start ordering my food online on Wok Hey. It’s seamless in the sense that I can pick the branch that is closest to me, I can submit my payment and get a queue number. When I finish my meeting, I go down to collect in person when my dish is already ready.
Read more in this Spotlight series
Beyond payments: The future of e-wallet marketing in SEA
E-wallets: The new frontier for driving usage and consumer loyalty
E-wallets in Indonesia: Convenience for consumers with effective campaigns for brands
Omnicom Media Group Indonesia
Inclusion and innovation: What brands can learn from e-wallet marketing in the Philippines
The e-wallet in SEA: How brands can also make it a vehicle for inclusion and change
The Secret Little Agency
Digital finance and its risks: Should Singapore brands step in where regulators fear to tread?
Faraaz Marghoob, Ruth Lim and Felicia Ong
Winning over Indonesia’s digital Gen Z in a changing payments landscape
Ahmad Ghozali and Arindam Bhattacharyya
Blockchain wallets: Engaging consumers across commerce, community and culture
Michael Patent and Acacia Leroy
How GCash is driving the next evolution of digital payments in the Philippines
How ShopeePay is redefining APAC e-commerce with e-wallets