Visa wants to equip SMEs in APAC with digital payments & online solutions to keep them in business.

Visa wants to equip SMEs in APAC with digital payments & online solutions to keep them in business. Source: AFP

Visa on why smaller retailers must embrace digital payments

  • One of the few ‘wins’ from the pandemic has been the overnight growth of the digital commerce space in APAC
  • Visa wants to help SMEs keep up with digitization to drive better experiences
  • Digital transformation among SMEs will be crucial for their recovery, and for the economy as a whole

Over the span of a few months, consumer shopping behavior in the Asia Pacific (APAC) region has twisted radically towards online purchasing, led by the rise of social distancing and movement restrictions across the continent.

But that’s not to say the opportunity for physical retail has gone up in smoke. With restrictions easing, customers are ready to be enticed back in-store, but retailers must be wary of the fact that the health crisis has driven a new preference for technology that offers contact-free exchanges.

These methods include touchless credit card payments, mobile-based payments, and QR code payment methods when it comes to in-person payments. A Visa survey of consumers from 40 countries including Singapore, found that two thirds (66%) of Singaporeans were developing cash-free payment habits during their lockdown, while 78% of the city-state residents said they would prefer using digital payment methods once the crisis is over.

Furthermore, many Singaporean consumers tried e-commerce for the first time during COVID-19, and much like other parts of Asia and the world, at least 40% think they are likely to increase their online buying in the coming years.

“The stickiness of digital payments cannot be underestimated, as three quarters of respondents indicated a preference to continue paying digitally instead of going back to cash, even when the pandemic has subsided,”  Chavi Jafa, Visa’s Head of Business Solutions for Asia Pacific, told Tech Wire Asia.

“Commerce across Asia Pacific is shifting further into digital in the wake of COVID-19, from more people ordering essentials online to people looking for secure, touchless ways to pay in person,” said Chris Clark, regional president, Asia Pacific, Visa. “Visa’s role as a payments network means we can help SMEs adapt to these new ways of managing and growing their business, ensuring that these crucial players can recover.”

But many SMEs, especially in developing regions, have yet to firmly establish a digital presence, which could threaten their sustainability as consumers (and competitors) take advantage of the digital commerce boom.

To help smaller businesses capitalize on this shift, Visa has pledged to support 50 million SMEs worldwide, including 10 million in Asia Pacific, by introducing a range of solutions that could help SMEs to optimize their digital commerce efficiency, and enable them to make and receive digital payments.

“In light of these changes and in an effort to get local communities back to business, some initiatives we have developed to help SMEs include the launch of ‘tap to phone’ solutions in Malaysia, with more markets such as Australia, Hong Kong, India, Taiwan and Vietnam to follow.

This innovative solution enables a merchant’s mobile phone to become a payment terminal, which provides SMEs with a low-cost acceptance solution,” Jafa said, adding that ‘tapping to pay’ is already the preferred in-person Visa payment option in certain markets like Australia, New Zealand, Singapore and Taiwan.

Aside from powering e-payments, Visa has realized that information and skills training will be invaluable for non-digital small businesses to embrace digital commerce. The payments provider has compiled virtual resource centers that offer tools, partner offers, and know-how on how to manage and grow a digital small business – often with a localized focus in different countries, as Jafa explained to us:

“For example, we launched a digital transformation guide for SMEs in Australia. Further, Visa is teaming up with leading e-commerce platforms such as Shopify and Boutir to help local businesses get online. In Thailand, where social commerce is popular, we are partnering with leading fintechs to help SMEs accept digital payments on social media pages, virtual marketplaces, or live chat platforms.”

Making up more than 90% of businesses, the critical role small businesses will play in the new digital economy is recognized, with many government administrations including Singapore, Malaysia, and the Philippines acknowledging the importance of fostering digitization among the SMEs in their countries, making them central focal areas in their national digital transformation plans.