Amidst the challenges posed by the global economy in 2024, Opn Payments invited Jitsupa Cheowit, the Country Manager for Opn (Thailand), to discuss the trends in the Asian payment industry and the business development opportunities in the payment sector.

Decades of Insight: Jitsupa's Extensive Contributions in the Payment Industry

With over 20 years of experience in the payment industry, Jitsupa, also known as Ple, has an extensive background. Starting her career at American Express for 15 years, she later transitioned to banking for an additional 6 years. Subsequently, she had the opportunity to work with a global payment gateway, collaborating with global merchants to develop payment systems across the Asian region, including countries such as Japan, Korea, Vietnam, and the Philippines.

This rich background has provided her with comprehensive insights into the entire payment system and process, catering to both local and global businesses. Her expertise covers credit card transactions, alternative payment channels, and a spectrum of banking services, allowing her to address the needs and pain points of various stakeholders, including card networks, banks, merchants, and end-users.

One notable project she undertook was the introduction of mPOS technology with Krungsri Quick Pay in Thailand, enabling businesses of all sizes to connect devices to mobile phones and instantly accept credit card payments. This technology revolutionized payment processes in the insurance industry, allowing insurance agents to conveniently receive credit card payments. It streamlined the payment process for customers, enabling them to make quick payments and receive coverage instantly. This project received the "BPA (Banking & Payments Asia) Trailblazer Award 2013" in the category of Product Excellence in Payment Innovation.

With more than two decades in the payment industry, Jitsupa witnessed the evolution of payment methods, from the shift from magnetic stripe to microchip cards to the current diverse trends in payment. Now, she shares her perspective on the current payment trends in Asia.

Payment Trends in Asia Differ Significantly from Global Trends

"While many may perceive Thai payments to be lagging, in reality, Asia is leading the way in many aspects."

From Jitsupa's viewpoint, global payment trends differ significantly from those in Asia. Asia, being a pioneer in digital transformation and mobile phone usage, sets the pace for innovations. The high mobile phone usage in the region drives the rapid development of payment technologies to meet changing consumer behaviors.

Moreover, Asia has a relatively low credit card usage rate and a significant unbanked population. This unique landscape has led to the prominence and diversity of payment methods in the Asia-Pacific (APAC) region. Global businesses entering the region need to collaborate with local players to adapt to the diverse alternative payment methods of each country.

For example, Thailand's preference for PromptPay has grown substantially, with transaction volumes increasing by 179.67% from 2020 to 2023, according to data from the Bank of Thailand. This makes accepting payments through PromptPay crucial for businesses.

The variety of payment methods in Asia has given rise to the trend of payment orchestration – a service that connects businesses with different payment methods and banks in a country. This allows global players to adapt quickly and provide consultancy on understanding the payment landscape and customer behaviors in each country.

In Vietnam, for instance, there are numerous banks issuing debit cards, making it inconvenient for customers to choose from a dropdown menu. Moreover, people in Vietnam are more familiar with logos than card issuer names. Taking local preferences into consideration, the recommendation is to use the card issuer's logo and arrange the logos so that the most widely used cards appear first.

Another interesting trend, as observed by Jitsupa, is the decreasing use of physical credit cards. Part of this shift is driven by younger generations' preference for mobile phones, leading to the development of technologies that cater to changing consumer behavior. In the future, virtual cards are expected to be issued more frequently, where users can conveniently access card details, including card numbers and CVV, through card issuer apps or even store them securely within merchant systems for future transactions.

Furthermore, mobile phone payments are continuously on the rise, whether through QR codes, e-wallets, or tap-to-pay features like Tap to Phone or Tap & go™. These technologies are evolving, but widespread adoption depends on user trust in security. For example, in Thailand, there is still concern about the security of tap-to-pay transactions. However, Jitsupa also highlights that adoption depends on the collaboration among Card Scheme, Issuer, and Acquirer to educate users and develop together. If one party takes the lead in development and others lag behind, the widespread adoption of such technologies might be more challenging.

Strategic Considerations for Businesses Adapting to Evolving Payment Trends in Asia

Businesses should adapt to the changing trends in payment methods in Asia, which are evolving rapidly. After collaborating with merchants for over 20 years, whether as part of credit card networks, banks, or payment service providers (PSPs), Jitsupa believes that businesses can enhance growth opportunities and gain a competitive edge by:

Understanding the Diverse Target Audience

To maximize their reach, businesses need to understand the varying needs and payment behaviors of different customer segments. Different target groups have distinct payment behaviors and preferences. For instance, working-age individuals with access to credit cards tend to rely on them predominantly, while students might prefer prepaid cards or e-wallets. On the other hand, elderly people who are less tech-savvy may require easily accessible payment methods, such as bill payments. Despite the digital aspirations, many countries have a significant elderly population, emphasizing the importance of catering to their needs.

Understanding customers goes beyond age considerations; it also involves addressing various pain points in their daily lives. Another emerging trend is the reduction in the number of applications. Many users are becoming overwhelmed by the multitude of apps they need to use. A solution to this is the consolidation of various apps into a one-stop service application with customizable menus and minimal clutter. This consolidation can involve services from different companies, such as the integration of various apps for electric vehicle charging, each with different functionalities.

Adapting to New Technologies:

While businesses don't need to adopt every new technology trend, they should selectively choose technologies that cater to their customers and business needs. One noteworthy technology that businesses should consider is the use of Tokenization for card data storage. This has become a new standard for card payments, as it reduces friction in data entry steps and improves transaction approval rates. Furthermore, the development is progressing towards Network Tokenization, which aims to elevate security standards and enhance customer experiences even further.

For larger businesses that frequently process customer refunds, such as e-commerce or pre-order online businesses, utilizing wallets may be a beneficial option. Currently, various payment methods like PromptPay and mobile banking lack refund support. Creating a dedicated wallet can streamline the refund process, offering businesses a more efficient alternative than manual procedures involving customer calls for account details.

Given the dynamic nature of payment trends in Asia, businesses can thrive by understanding diverse customer needs, adopting innovative technologies like tokenization, and embracing evolving payment methods. Jitsupa’s extensive experience emphasizes the importance of adaptability and the ability to embrace change and seize emerging opportunities.