Integrating Alternative Payment Methods
Alternate payment methodologies are widely available, multiple contingencies have to be overcome if they can truly take off in Asian markets, a panel has revealed.
A panel of industry leaders spoke at the two-day Seamless Asia event, highlighting how various online merchants and service providers have a host of payment options available to them in order to bring about a more seamless transaction and overall process for their customers. At the same time, these merchants are somewhat bound by the habits and cultures of the customer base.
The panel, entitled ‘Integrating alternate payment methods’ was moderated by Payments Consulting Network’s managing director Mangala Martinus, who led a discussion with Gerard Creamer, Trade Me Ltd’s Head of Payments, Amit Kurseja, Global Senior Vice President and Country Head of Amazon India, Darren Makarem, Acting CFO, Agoda.com, and Netflix’s Head of Payments SEA, Japan and Korea, Pragya Agarwal.
The discussion provided various insights from some of the key figures in industries likely to optimise alternate payment methods. The two-day virtual seminar gave industry leaders from the Asia-Pacific region an opportunity to share their insights as key players in payments, transactions and e-commerce.
The discussion had earlier established how alternate payments need to be flexible and agile in different markets, given the historic, social constructs traditionally surrounding payment methodologies.
Amazon’s Amit Agarwal pointed out that upon the service’s launch eight years ago, 95% of all transactions that took place in India were cash-based. Amazon’s preferred use of cards as a payment process had many hurdles to overcome.
“The (Amazon) model was working well for us in the US and European markets,” Amit said, “but in India we had to reinvent and relaunch a pay on delivery or cash on delivery model … that was essentially the cost of entering the market for us.”
For Agoda.com’s Darren Mackarem, alternative payments are anything that doesn’t involve traditional cards.
“They are not universal in general,” he said, highlighting the unique payment platforms in India and Indonesia, as well as a whole gamut of electronic payment methods, such as e-wallets, online banking and over-the-counter sensors.
Other challenges faced by online retailers were noted, including how refunding can prove challenging, according to Darren Makarem of Agoda.com
“Many of the APMs don’t offer an easy solution to put money back into someone’s account or return the money to them,” he said. He noted how the refunds can be onerous in terms of time spent bringing about a solution, and expensive to boot.
Mangala brought the conversation around to the importance of solutions for what he called ‘uplift of potential customers’, which Amit Agerwal of Amazon offered his own insights. In a country – India – where a lot of Amazon’s customers are shopping online for the first time, the onus is on the online retailers to build trust with this new market share. One way to build that trust was through allowing customers to pay via cash on delivery.
“Allowing them to pay at the time of receiving that box gives them a lot of confidence to go ahead and place the order. While we don’t like the fact that payments are being delayed – it’s kind of a credit you’re giving to customers for two days while you’re incurring all the shipping costs – if the customer doesn’t accept it, that’s a huge logistics cost you end up incurring,” he said.
“But at the same time, if you simply look at it from the ‘cost of customer acquisition’ perspective, it definitely pays for itself and much more.”
Gerard Creamer from Trade Me Ltd, said crypto is something they had been approached for using, but doesn’t see much use for it in online services in NZ, given the nature of that country’s marketplace.
“People who use crypto are generally ahead of the curve,” he said, “so they’ll have payment cards that they can use.”
Finally, Mangala asked the panel to look forward five years and forecast what they’d like to in alternate payment methods to help improve the checkout process. Pragya summed up many of the panel’s feelings by saying how she wants more creative solutions, rather than rear actions that are currently in place, as well as having more standardised APIs would be more helpful, and to not have the present design discrepancies. Gerard Creamer said that if the technology didn’t have an API or it isn’t mobile-first, it wasn’t going to be massively useful in five years’ time; the volume of customers moving from PC to mobile is too substantial.
The discussion reached something of a consensus in the idea that embracing alternate payment methods is important for the future, but they must be tailored to suit the needs of the marketplace, and only then after enough trust has been established with a customer base not used to non-cash transactions for goods and services.
Author: Matt Reddin, The Big Smoke.
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