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Thailand has been one of the countries that continues to reduce its dependency with cash. The government has been keen on driving the country towards a cashless society, from launching nationwide e-payment scheme PromptPay to recently announcing a campaign that offers a reward up to 1 million THB ($29,463) for users who adopt cashless transactions.

It may seem like a lot of money to reward people to try more convenient methods of payment but the Thai Bankers’ Association predicted that commercial banks could save $2.18 billion in the next 10 years with a digital payments system as the cost of transportation and insurance that came with the use of cash transactions lowered.

Market value for digital transactions is also expected to reach $23 billion in 2021, up from $11 billion this year so it’s no wonder fintech has become so popular.

A company that was an early adopter and saw Thailand’s potential for digital payments is AirPay, the pre-payments platform by Garena (now Sea), Southeast Asia’s most valuable internet company to date.

Serving the unbanked one internet cafe at a time

AirPay was initially launched in 2014 as an e-wallet to facilitate online transactions for users of Garena’s gaming service and since been downloaded 3.2 million times.

As one of the biggest market for Garena in the region, Thailand was chosen as the product’s launch pad. AirPay Thailand’s Country Product Manager, Supphavit Hongamornsin, shares another reason with eIQ.

“Compared to the other markets in emerging Southeast Asia, we find that Thai people are more open to trying new forms of payment,” said Hongamornsin.

To ensure AirPay was user friendly for the roughly 18.3 million gamers in Thailand – where 26% of are below the age of 20 and have low bank account ownership – the company ended up creating two platforms to complement one another, AirPay Counter and the AirPay app.

AirPay digital payments

Thai gamer demographic shows a population of digitally savvy young people. Source: Newzoo

“An app was created because urban millennials with digital nativity are used to completing all types of transactions directly through their phones,” explained Hongamornsin.

The AirPay Counter, on the other hand, is a more traditional payments option that allow users to top up their AirPay e-wallet through cash payment at an internet cafe, convenience store or regular  mom and pop shop.

“We started the counter service at internet cafes because of their wide network and familiarity – there are around 40,000 of them in Thailand,” said Hongamornsin. “They’ve been highly helpful for residents in rural regions without access to smartphones or bank accounts.”

To date, AirPay has around 100,000 AirPay Counters nationwide in every sub-district of Thailand and partnered with local chain stores like Supercheap and IT Shops like IT City to expand its reach.

“Only 10% of our counters are actually in Bangkok,” said Hongamornsin.

AirPay digital payments

Internet cafe with AirPay Counter facility

Supporting the country’s cashless agenda

Since its inception in 2014, AirPay has evolved from simply facilitating online transactions for the Garena gaming community to providing a wider range of payment services for both physical and digital goods including utility bills, phone credit, movie tickets, and ecommerce.

Hongamornsin said AirPay wants to empower people, especially the younger generation, through better financial capabilities and provide a solution to siloed bank accounts.  

“Right now, there is actually very little that you can do with your bank account. In Thailand, for example, not all debit cards can be used for online payments.”

To combat this, one of the new services provided in the AirPay app is a virtual prepaid card called AirPay Card in partnership with MasterCard.

AirPay digital payments

Setting up an AirPay Card in the AirPay App

“There’s a large population in Thailand that’s still underserved by traditional financial services and unable to complete online transactions. With the AirPay Card, customers can purchase from any merchant in the world that accepts MasterCard,” comments Hongamornsin.

AirPay’s foreseeable future

In 2016, AirPay reported an annualized gross transaction value of $510 million. Although gaming services contributed heavily to the company’s revenue, AirPay is expecting the tide to shift to ecommerce with a goal of one million AirPay Card owners in Thailand by the end of this year.

Hongamornsin, however, admits that there’s still a long way to go before the country can achieve a “majorly cashless” status.

“I think it would take at least five years for Thailand to reach this milestone [80% cashless],” said Hongamornsin.

And unlike Shopee and Garena that have made their marks at a regional level, AirPay’s story is still pretty localized to Thailand.

In other countries like Indonesia and Vietnam where AirPay is present, Hongamornsin says the population is much more underdeveloped when it comes to digital payments creating new challenges.

These markets have complex banking landscapes that make it difficult for AirPay to integrate.

“In Vietnam, there are more than 50 small banks used by the population. Compared to Thailand’s roughly 20 banks, we still need to understand how to connect them all through AirPay.”

“Expansion to another country is definitely in the pipeline, but we want to make sure we are strong in our existing markets first,” said Hongamornsin.

With the pace that fintech is growing in Thailand thanks to the efforts by companies like AirPay, it won’t be long before the millennial becomes well accustomed to plastic over paper.

Here are today’s most news worthy ecommerce headlines.

1. Rocket Internet says it lost $682m so far this year

More financial earning reports from Rocket:

The earnings statement touts several achievements, such as improving profit margins and net revenue, bragging that selected companies have reached record revenue in the year so far.

Read the rest of the story here

 

2. Singapore becomes a test bed for Citi Pay e-wallet

Entering the already crowded e-wallet marketplace is Citi with the official launch of Citi Pay, a digital wallet developed by the bank. It says Singapore is the first country in the world to have Citi customers have access to its new e-wallet facilities.

Read the rest of the story here

 

3. New study encourages Amazon restrictions

Within the company, the report claims that Amazon is driving down wages of manufacturing and delivery jobs with a long-term goal of automating thousands of positions. And the company is doing this while taking millions in public subsidies to build warehouses around the country.

Read the rest of the story here

Ready to start your weekend? Check out these ecommerce headlines first.

1. E-wallet services boom at airports for Chinese tourists

International airports have become the new battlefield for the country’s top internet companies as they gear up for over-seas expansion by providing Chinese outbound travelers with more e- wallet services. Read the rest of the story here

 

2. Paytm plans to build a mini bank inside its app

Paytm’s got challengers on all sides. With its ecommerce site, it competes with Amazon India, Flipkart, and Snapdeal. When it comes to money, it puts up against rapidly evolving banks, including the newly released Unified Payments Interface that lets people transfer money with a single identifier. Read the rest of the story here.

 

3. Thailand to get ‘Samsung Pay’ this year

The banks and card issuers already confirming their support for the service are Krungthai Card Co, Citibank, Kasikornbank, Bank of Ayudhya, Siam Commercial Bank and Bangkok Bank. Read the rest of the story here.

 

4. Ten airports introducing Alipay for Chinese tourists

Alipay’s new “Future Airport” program will launch at  Munich Airport, Singapore Changi Airport, Narita International Airport in Tokyo, Kansai International Airport in Osaka, Seoul Incheon International Airport, Auckland Airport, Suvarnabhumi Airport , Hong Kong International Airport, Taoyuan International Airport and Macau International Airport. Read the rest of the story here.

 

Online shopping is surging in the Philippines, ecommerce is expected to reach $4.69 billion by 2020, reports Tech In Asia.

More and more Filipinos are getting their hands on smart devices and combined with lower mobile data offers, it shouldn’t come as a surprise that online shopping is the next big wave in Philippines.

Filipino shoppers have swapped bulks for baskets

In 2012, The Nielsen Group found that shoppers in Philippines have switched their shopping carts for baskets. With plenty of convenience stores and grocery shops within walking distance from residential areas, most people don’t feel the need to buy in bulk.

Although Lazada currently holds the largest market share at 80%, they are still competing with Zalora, Hallo-Hallo and Go Buy.

One of the strongest driving forces for the average shopper is the deals offered by online marketplaces. Nine out of ten shoppers admit to usually buying more than planned for, opening up doors for retailers to try all sorts of promotions, from free items to ‘buy 1 get 1 free’ options.

Ecommerce has also taken off alongside increasing e-payment options. Aside from GCash and Smart Money (Smart Communications), alternatives such as DragonPay, PayPal, 7 Connect from the 7 Eleven franchise and Hello Pay have made online payments much easier for Filipinos.

How to capture the Filipino consumer

  • Exclusivity: Consumers, especially Filipinos, love to be at the forefront of new trends. Websites like Straightforward.ph have small inventories but ensures high quality. The site also features a 365-day guarantee, free of charges and fees.
  • Customer Service: Websites such as Unlideals.com respond to customer queries within 24 hours.
  • Customization: Look to websites such as Hallo Hallo Mall, it provides customers with value per transaction with their point system. The site customizes the discount experience by letting users earn their own points, and use those to get the saving they want.

The market in Philippines is large enough for the ecommerce giants such as Lazada to make room for smaller players, as long as they make it a priority to diversify.

A version of this appeared in Tech In Asia on July 14. Read the full version here.

Thailand recently unveiled a 4.0 economical model to develop Thailand into a valued-based economy, according to Prime Minister Prayut Chan-O-Cha, reports Retail News Asia.

Thailand 4.0 will change the country’s traditional farming to smart farming, traditional SMEs to smart enterprises, and traditional services to high-value services.

The aim is to create creativity and innovation through the application of technology.

As The Nation comments, the challenge of this model is getting the country to come out of its middle income trap.

The government wishes to see farmers become entrepreneurs and SMEs to branch out of being tied to government assistance and to become startups that grow beyond their potential growth areas.

Thailand 4.0 comes after three prior economic models

  • Thailand 1.0 focused on agricultural development
  • Thailand 2.0 focused on upgrading low income households reach middle-income
  • Thailand 3.0 emphasized on  the growth of the industrial industry

The Prime Minister sees 10 target industrial groups to be the new engines of Thailand’s growth, including seven industries that are considered the backbone of the country’s new digital economy.

Ex. the government’s e-wallet platform, PromptPay is an integral part of Thailand’s 4.0 plan to drive the country forward.

Even if this initiative kicks off, the country would not see results for another three to five years. Unless the country makes it a sustainable national aim, the blueprint is dependent on the new government’s stance on the matter, following next year’s impending election.

A version of this appeared in Retail News Asia on July 13. Read the full version here.

Yoyo Wallet, the European mobile payments and rewards app is making a late entry into Asia, using Singapore as its foray into the region, reports Tech In Asia.

Yoyo Wallet will join an already crowded space, filled with Samsung Pay, Apple Pay and Android Pay, but claims that it will be the first platform in the market to combine payment with loyalty and provide value to both retailers and customers.

Yoyo will initially only work at Foodclique, a food court at the National University Of Singapore. In the UK, Yoyo Wallet also has presence at numerous universities, offering students an e-payment option for their lunches.

How Does Yoyo Wallet Work?

Payments made using Yoyo Wallet are processed via a QR Code on the app which is then scanned by the shop assistant on the cash register. For every transaction made through the platform, users can collect loyalty points and personalized discounts.

Yoyo wallet launches in Singapore

Source: visaeuropecollab.com

The payment itself is an enabler to a new buying experience where loyalty is automated and personalized. The platform want to move away from cash, stamp cards, loyalty cards and paper receipts.

Alain Falys, CEO of Yoyo Wallet states that the platform typically enjoys the highest share of checkout (30%) versus cash, cards or Apple Pay.

Yoyo Wallet also provides insights for retailers. The platform offers Yoyo Engage, a web tool that aims to help companies understand their consumers better, along with tools to assist in engagement. An example of this feature would be a merchant using this tool to target customers that prefer drinking lattes before 9am, and sending out personalized promotional offers. The platform leverages from big data and targeted communications to drive sales, and it’s effective.

Like a lot of Western startups cautiously experimenting with Asia, Yoyo Wallet plans to use Singapore as a hub, and will consider expansion in other Asian countries once it strikes gold in Singapore.

A version of this appeared in Tech In Asia on July 13. Read the full version here.