According to a study, consumers want to get rid of cards and pay with the wave of their hand.
Imagine paying for fuel, meals, and other necessities by just showing a hand and not having to remember passwords and PINs to authorize online payments. This is how consumers in Singapore envision the new era of e-commerce – and they may not have to wait long for that future to arrive given that 94% of businesses plan to adopt a new mode. payment in 2022, according to Visa.
But with multiple payment methods available in the ecosystem, which exactly should businesses adopt?
Based on FIS Generation Pay 2021, five payment methods are gaining traction with Singaporean consumers: biometric authorization (71%), smart controls (47%), in-car integration (52%), cryptocurrencies (37%). %), and a hand-implanted microchip (25%).
Among these options, Kelvin Lam, regional general manager of a fintech company, YouTrip, said the best to adopt in terms of cost, convenience and security would be biometric authorization.
“[It is a] proven payment method that promises both convenience and security,” said Lam Singapore Business Review, adding that biometric authorization via fingerprint or face verification is “inherently more secure than passwords and [two-factor authorisation] methods. »
This was echoed by fintech company Zwipe’s vice president of sales and business development, Claus Hansen, saying that using biometrics in the payment authentication process provides the highest form of security available today. today.
“Unlike a PIN, a fingerprint stored securely in the EMV chip as a template cannot be stolen,” Hansen told Singapore Business Review.
“Matching the fingerprint to the image already stored on the card preserves the privacy of the cardholder and the safety and health of the consumer while maintaining the convenience of contactless payment,” Hansen added.
It’s not just experts who support the security of biometric authorizations, even consumers say so, with nine in 10 already wanting their payment cards to be biometric in 2022, Zwipe’s study found.
The only concern consumers (80%) have with biometric payments is the risk of infection when paying in-store or touching point-of-sale terminals.
Crypto for Cross-Border Trade
For businesses that not only serve the local market but also across borders, cryptocurrency would be a good option to consider, especially for small and medium-sized businesses.
Lamb said Singapore Business Review that cryptocurrencies are “intended to drive faster and cheaper cross-border transactions” which he says will “expand as businesses increasingly operate in a distributed and borderless manner.”
“Just like B2C payments, businesses will also expect to pay in the fastest and cheapest way. Advancements in payment technologies such as blockchain are a step to help businesses save time and money. money on cross-border payments,” Lam added.
In 2022, professional services firm EY Global said it expects global cross-border payment flows to reach $156t or $209.75t (1SGD = $0.74); of which $201.66t or US$150t will come from B2B transactions.
While crypto will greatly benefit B2B transactions, Lam warned that this type of payment is still “a volatile space that needs a more sustainable framework and more consumer protections before it can be rolled out to the masses.”
Things to consider
When selecting which payment methods to adopt among the rising payment methods, Nagesh Devata, regional vice president, GTM APAC of commercial technology company Payoneer, said businesses should consider not only their global appeal , but also the preferences of the local markets in which they operate.
“For example, Gen Z and Millennials are the digital generations and are particularly keen on mobile payments and digital credit programs, such as Buy-Now-Pay-Later. The silver generation has also been pushed towards contactless and digital payments, which may reduce their health risk during the pandemic,” Devata said. Singapore Business Review.
With consumers paying more attention to convenience, the Payoneer expert said it’s also important to consider the complexity, cost, user experience, speed and market reach of these innovative payments.
More than increased convenience, Lam said businesses should value the security of the payment methods they plan to adopt given that the rise in scams and cybercrimes has led customers to pay a greater emphasis on security when paying.
In 2021, Microsoft reported that six in 10 Singaporean consumers have encountered scams, with Gen Z being the most exposed to IT-related scam interactions.
Besides security, Lam said companies should first assess the volatility of the technology before implementing new payment methods.
“Payment technology[nologies] which are still in their infancy, such as cryptocurrency, are highly volatile and pose a higher risk to consumers as a whole,” Lam said.
As consumers come first, Lam said companies also need to ensure that “many consumer protection regulations” are in place when integrating new payment methods, and ensure that these technologies be accepted.