Is Cash Still As Popular As We Thought?


It is well known that Southeast Asia’s more developed countries like Singapore and Malaysia have moved away quickly from cash payments. Over 68% of Malaysians prefer contactless payment, 34% more than compared to last year but how are developing markets such as Thailand faring? Well, apparently, the market is witnessing a rise in e-payment adoption.

Visa country manager for Thailand, Suripong Tantiyanon, comments,

“As new innovation emerges, consumers are more willing to try new payment technologies. The case in point is how seven in ten Thais (67%) prefer to automate payment, eliminating the entire physical process of paying.”

“Trendy” methods of payments are also attractive for Thais;

75% of respondents stated they felt comfortable using biometrics technology such as fingerprint and facial recognition – the highest percentage in Southeast Asia.

Whether a small business is setting up online or expanding global operations, the payments platform is one of the most important components in building a functional ecommerce strategy.

Afterall, if a customer isn’t comfortable with the payment options, why would they buy?

Although Southeast Asia’s dominant payment method still remains cash-on-delivery, the increased popularity of cashless payments means that ecommerce sites looking to establish a foothold in the region should begin preparing their systems to accommodate different payment types and understand what each can offer.

There are two main types of payment gateways:

  1. Connect ecommerce platform with banks
  2. Connect ecommerce platform with third party platforms
    • Ex. Paypal, Adyen, that allows variation for

To connect your platform to a bank will cost money, in Thailand, owners of the platforms are required to pay approximately $5,884 for integration.

This is why many merchants and smaller brands opt for third party platforms instead – many, like PayPal, will also provide more flexibility for customers.

From global, household names to small online shops, here are a few of the most effective payment gateways to integrate.

Adyen is often a go-to platform for established, global companies looking to expand into new or multiple markets. The payment solution is designed to detect fraud through its risk management systems and provides reports at both the company and merchant account level.

Adyen accommodates international expansions, which means that it accepts all types of credit cards and payment methods. The platform also focuses heavily on providing local solutions to effectively reach more shoppers by looking at which payments provider is widely adopted.

For example, in Indonesia, Adyen offers integration with Visa and Mastercard, but also local e-payment wallets and carrier billings such as DOKU and Alfamart counters. In the Philippines, it adopts a mobile first strategy and offers integration with cash based payments and online banking through mobile phones.

Adyen can handle 250 payment methods, 187 currencies and a single platform for mobile, desktop and physical transactions.

“Instead of building direct integrations to each payment method, we have Adyen,” says Kapil Mokhat, head of payments at Airbnb.

Adyen’s fees include a chargeback fee and commission per transaction, with different commision rates depending on the payment method.

Indonesian based Kredivo is operated by FinAccel, a Jakarta based fintech firm, that focuses on online payment and online credit scoring services. The platform was launched upon noticing a lack of payment methods for ecommerce shoppers without credit cards.

In Indonesia, only one in 15 people own a credit card.

Kredivo allows customers to make payments on ecommerce websites and convert the purchase in installments without a credit card or bank account. The second option is done through the calculation of customers’ credit scores from data points of their online histories, and Kredivo submits loan applications on the customers’ behalf.

Kredivo is only available for residents of Greater Jakarta, Bandung and Surabaya, but the company is preparing to expand to the rest of Indonesia within 2017.  

2C2P is a payments solution that accommodates merchants, in both ecommerce and mobile commerce payments. The platform caters to both banked and unbanked customers in Southeast Asia.

The flexible, locally adapted aspect of 2C2P makes it a reliable choice for merchants and brands that mainly want to stay within Southeast Asia. 2C2P accepts credit cards and also installment payments, making it easier for customers to afford higher valued items.

2C2P also helps provide payment solutions to those without credit cards through its 123 payments access points such as 7-Eleven counter service in Thailand.

2C2P also has a product called Qwik, that is a peer-to-peer payments platform to allow a cashless transfer between buyers and sellers on Facebook.

Customers have the choice of paying via credit/debit cards, counter payments, online direct debit or ATM payments. This platform was designed for Facebook’s merchants who found 2C2P’s payment gateway too expensive, making it easier to use the platform’s secure and efficient service.

2C2P isn’t suitable for a global payment gateway, its better for smaller merchants or brands that are looking to reach a wide array of consumers in the region, without being restricted by credit card ownership.

Thailand based Omise is a reliable, secure payments gateway for ecommerce merchants and brands. Users of the platform have access to the Omise Dashboard that allows them to view recently transferred money, total balance, and conduct refunds.

The all encompassing platform lets users manage everything from one dashboard.

Omise works similarly to PayPal, but is slightly speedier if users want to transfer money from a third party account into their Omise account. It also supplies users with a trial API, which makes it significantly quicker than a bank to implement during a trial period.

The company also practices tokenization, which means the system does not record a customer’s credit card number, as the token swaps out sensitive data with a randomized number in the same format.

Omise charges 3.65% per credit card transaction, and signing up is extremely easy. For merchants, simply submit your ID card and the front page of your bank book. For companies, submit a company registration, director ID card, Tax ID and the front page of the company’s bank book.