James Daniels, VP and Head of Asia Pacific at FIME
At the end of last month, two major technology events took place in Asia. The first was Seamless Asia, which focused on the future of finance and commerce. The second, MWC Shanghai, centred around ‘Intelligent Connectivity’ – bringing together topics from 5G to AI. The events may have had different focuses but the key trends in fintech echoed across them. So, what can we take away from two of the biggest technology events in Asia?
Mobile payments – the sky’s the limit
The convergence of telecoms and payments was a big theme at both conferences. With recent research demonstrating that Asia is driving the growth of the mobile payments market worldwide, this comes as no surprise. The staggering popularity of QR Code payments and mobile wallets also continue to rise, demonstrating high consumer demand for quick and easy services.
Mobile phones can also be used to accept payments, opening new doors for merchants. SoftPOS solutions allow NFC and QR Code-enabled mobile devices to accept contactless payments. These new payment acceptance methods are growing in usage as they give businesses of all sizes cheap and simple ways to accept digital payments. The introduction of these ways to pay demonstrates Asian merchants’ and consumers’ willingness to adopt new and innovative technologies, ahead of much of the world.
New ways to authenticate
Along with the rising popularity of mobile payment solutions comes the increased importance of strong customer authentication. Conversations at Seamless Asia centred around the delicate balance between adding new security measures without creating more points of friction for consumers. We were delighted to give a presentation on EMV® 3-D Secure (3DS): a messaging protocol which improves communication between the issuing bank, acquirer and merchant.
This means that basic account holder information can be automatically shared in a frictionless way to perform risk-based authentication. This cuts out complex additional steps for consumers, reducing cart abandonment, false declines and resulting in better sales for retailers.
EMV 3DS wasn’t the only focus point of authentication. Across the board, new types of payments authentication are making waves in Asia. Biometric authentication is a big trend due to the increased convenience and security that it offers consumers. It can also be integrated into a variety of form factors, giving end users a range of seamless and secure payment methods. Facial recognition-based payment systems are just one of these emerging options. Consumers can now pay using just their face to buy fried chicken or travel on the subway.
And this isn’t the only biometrics-based payment system being introduced into the daily lives of Asian consumers. Biometric smart cards are one of the biggest trends in payments currently, delivering the convenience of contactless payments with an additional layer of trust. The availability of biometric payment methods mean that terminal, device and card manufacturers are becoming more creative to fit with consumers’ diversifying expectations.
Intelligent connectivity = intelligent payments?
Hot topics at MWC Shanghai from the wider technology market also have big implications for the payments sector. Take the introduction of 5G. Research from Deloitte shows that Asian countries are winning the 5G race, which promises to benefit the payments ecosystem. Increased connectivity and speed could mean shorter transaction times for consumers, quicker and more stable connectivity between merchants and acquirers and even an end to offline payments.
Another growing technology making its way into the retail space is the use of AI. Using big data to monitor for ‘out of the ordinary’ purchases has long been useful for retailers to minimize losses from fraud. However, the next step is to use AI to not only prevent losses but increase revenues. Using intelligent data collection, merchants can use machine learning to drive product recommendations.
This allows them to personalize the shopping experience by deriving meaningful conclusions from behavioural analytics. As well as providing added value for consumers, this boosts profitability rates. Research from Boston Consulting Group found that retailers’ implementation of personalization strategies can drive revenue growth by 10%.
The next steps to digital transformation
At the centre of these upcoming trends is digitalization. With new and intelligent ways of purchasing and authenticating, the Asian payments market is leading the way to take more transactions online than ever before. However, system upgrades to implement the next generation of technology present new challenges. Support from a trusted implementation partner can be key to minimize unexpected delays and costs on the path to service launch.
To find out more about how FIME can support your digital transformation, contact us.