E-commerce fuels payment gateway boom, and vice versa
E-commerce fuels payment gateway boom, and vice versa
E-commerce fuels payment gateway boom, and vice versa
- Payments an integral part of customer experience, not just an end process
- Mobile-first is passé, it’s multichannel – and that includes physical retail

ASIA has been the epicentre of an e-commerce boom, the convergence of increasing Internet and mobile penetration having sparked the growth of players like Lazada and Rakuten.
Yet behind these behemoths lay important processes that make e-commerce possible. One is logistics, while another, and much-neglected piece, is the payment gateway that makes one-click buying possible.
Payment gateways allow people to pay online with their credit card or digital wallet, negating the need for cash-on-delivery, bank transfers or other methods that may force users out of the house.
Digital News Asia (DNA) spoke to various payment gateway providers to get their take on the e-commerce boom in South-East Asia, and no surprises, they were all enthusiastic, but also pointed out key challenges that lay ahead.
E-commerce players are recognising the importance of secure and efficient online payments, according to Chew Ann Wee (pic), South-East Asia senior regional director at CyberSource.
“South-East Asia is at a turning point in terms of Internet and mobile penetration, with the number of Internet users making the region an attractive market for both big and small e-commerce players,” he told DNA via email.
“As the popularity of online shopping in the region grows, the demand for payment gateway services increases,” he added.
PayPal South-East Asia general manager Rahul Shinghal echoed Chew’s views.
“With e-commerce projected to reach US$1.3 trillion across Asia Pacific by 2019, the boom … is creating greater demand for access to secure payments, especially with the proliferation of cross-border online transactions,” he said.
“For online shoppers, cybercrime is still top of mind, and safety and trust are top priorities when choosing a payment method.
“As e-commerce takes off, there is a growing demand for payment options that can give shoppers peace of mind and confidence when they make online transactions,” he told DNA via email.
Fraud also remains a key concern for payment gateway providers.
“As technology evolves, we will see new challenges and opportunities for e-commerce companies when it comes to fighting fraud,” said Rahul.
“Fraudsters are constantly deploying an array of advanced tactics to obtain personal information, and with smart device penetration going up, more fraud is expected to move to mobile,” he added.
The payment industry in South-East Asia is still nascent, and playing the global game would require a focus on security, according to Adyen Asia Pacific president Warren Hayashi.
“These payment methods around South-East Asia are relatively new, and they all growing and … trying to evolve a user experience that meets the requirements of global players,” Hayashi told DNA in Singapore.
Customer experience the key
Consumers have been forcing e-commerce players to change as well, according to CyberSource’s Chew.
“The new breed of digitally-savvy consumers is exhibiting changes in their buying behaviour, and this is driving the convergence of channels,” he said.
“In response, payment gateway service providers have also embraced the change – they’re using innovative ways to support e-commerce businesses in reinventing and delivering a true cross-channel experience, while simplifying back-end operations,” he added.
The fact that payments sit at the end of any e-commerce shopping spree makes it an integral part of the customer experience.
“We have kind of changed the way merchants think about payments – it’s no longer something you deal with at the end of your product cycle, it is an integral part of your user experience,” Adyen’s Hayashi (pic) said.
Rahul concurred, saying user experience was especially important in the mobile space, with mobile payments having risen from less than 1% to 30% of PayPal’s total payment volume.
“To capitalise on this trend, any business with an online presence should also invest in a well-developed mobile experience, where users are not burdened with having to key in extensive amounts of information in order to complete their purchase,” he said.
“What is important is a seamless payment experience,” he added.
CyberSource’s Chew agreed, noting that customer experience was cited as one of the top 10 critical success factors in 2016 by research firm Forrester, and with Gartner reporting that 89% of companies are competing on customer experience alone in 2016.
“E-commerce merchants need to provide a wholesome end-to-end customer experience – from the moment a customer visits their website, to the delivery of the package, and beyond,” he said.
“For instance, payment gateway service providers need to provide e-commerce merchants with the solutions to allow their customers to pay the way they prefer, regardless of device or currency.
“In doing so, they can enhance customer experience as well as capture more sales, ultimately boosting the competitive advantage of their e-commerce business,” he added.
Cross-border boom
International cross-border sales are also a key trend that is shaping the e-commerce market, with Chew citing statistics from Accenture and AliResearch that predict global e-commerce sales will reach US$1 trillion in 2020.
Thus, the opportunity is ripe for e-commerce vendors to emerge big winners by expanding their reach beyond their local or domestic boundaries, he argued.
“This also implies that e-commerce merchants will look towards payment gateway service providers which can offer a wide spectrum of payment acceptance – payment types, methods and currencies,” he declared.
Quipped Adyen’s Hayashi: “People are just buying everywhere from all over the world.”
PayPal’s Rahul, in fact, cited cross-e-commerce as “a driving force in the global marketplace, with more than 50% of online shoppers buying from other countries around the world.”
“Cross-border trade can be a vital source of incremental revenue for merchants,” he suggested.
Payment integration issues
While everyone and their grandmother may be looking to set up an e-commerce store, payment remains one of the trickier challenges, especially with cross-border buying in the mix.
“Businesses need to be aware that payment preferences may differ across regions,” Chew said.
“As a result, e-commerce businesses should adopt a holistic payment management platform that offers customers a vast range of options that cater to local preferences, providing them with flexibility and convenience,” he added.
Meanwhile, Hayashi noted that “merchants want a platform they don’t have to integrate 10 different times for 10 different payments in 10 different countries.”
This, in fact, can often lead to ‘shopping cart abandonment,’ according to Rahul.
“Some consumers may decide against completing a purchase online due to the lack of seamless and secure payment options, the high shipping costs, or simply because the process of entering the required data is too lengthy, tedious or complex,” he said.
Another challenge is facilitating mobile and cross-channel payments, given that many shoppers have an ‘always-on’ outlook.
“As customers are increasingly demanding anytime, anywhere, ‘know me everywhere’ experiences, sales channels are converging,” Chew said.
“By enabling security-driven acceptance of digital payments across multiple channels worldwide, e-commerce operators can facilitate cross-channel payment activities and simplify back-end integrations,” he added.
PayPal’s Rahul (pic below) agreed, bemoaning the fact that merchants might not be paying attention to mobile shoppers.

“Many merchants do not pay enough attention to developing a great mobile experience for their customers,” he said.
“Increasingly, most consumers first connect with a business on the Internet, and more often than not, it’s from their mobile device.
“Mobile payments are therefore an essential part of any business that wants to capitalise on today’s savvy online shoppers,” he added.
Quipped Adyen’s Hayashi again: Merchants “don’t want three separate integrations for three different channels.”
Mobile-first or multichannel

Mobile commerce has in fact become the mainstay of e-commerce in South-East Asia, and CyberSource’s Chew believes that its ascension will continue.
“With the rise in mobile penetration over the last few years, mobile phones have seen a surge in their use, not just to call or text, but also to shop,” he said.
“Forrester predicts that m-commerce sales will top US$142 billion in 2016.
“More than ever before, e-commerce merchants will have to look towards having their online stores tailored to mobile browsers or apps,” he added.
An omni-channel approach is also going to be key.
“E-commerce is complementary to brick-and-mortar retail and even then, the norm now is for consumers to look past using just one device for online shopping,” said Chew.
“The International Council of Shopping Centers reported that customers who shop across various channels (physical, online, mobile) tend to shop more frequently and spend 3.5 times more than single-channel shoppers.
“As customer buying behaviour drives the convergence of channels, e-commerce businesses and payment gateway providers alike need to be committed to supporting capabilities that deliver a true cross-channel experience,” he added.
In fact, Adyen’s Hayashi said that increasingly, “it’s no longer conversations around mobile-first or mobile-only now.
“We do want to make sure that every payment product is mobile-friendly and omni-channel,” he added.
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