SMBs should focus on digital payments to remain competitive
As digital payments continue to gain momentum in Southeast Asia, more than half of e-finance users in the region believe that medium businesses (SMBs) should begin using digital payments for financial transactions.
In fact, the usage of digital payments has increased tremendously over the last two years, due to the COVID-19 pandemic. The seamless operations of digital payments for both businesses and customers have also contributed to the increased usage.
According to a study by Kaspersky in a bid to identify the attitude and challenges of digital payment users in the region, consumers in Malaysia (72%) strongly favored the SMB’s adoption of digital payment systems, followed by Singapore (68%) and the Philippines (68%).
The demand for contactless payment systems is unprecedented and reflects the projected trajectory of rising e-commerce spending by 162% or US$ 179.8 billion by 2025 with digital payments accounting for 91% of the transactions, according to research company IDC.
Mobile wallets are the preferred method of digital payments with 64% stating that it can also boost businesses by increasing their earnings. The most frequent forms of digital payments among the region’s consumers are mobile payment apps (58%), internet banking via mobile apps (53%), debit cards (36%), credit cards (33%), and internet banking via a browser (31%).
The survey showed an overall belief (64%) among the respondents that mobile wallets can even positively boost businesses by increasing their earnings. Thailand is the most confident with this idea (71%) followed by Malaysia (68%) and Vietnam (64%).
Interestingly, users are also aware of the issues that hamper SMBs in embracing this technology. More than a quarter (27%) of the total respondents said admitted that local businesses are not ready to use digital payments yet because of internet issues and lack of devices. This view is highest in the Philippines (31%), followed closely by Vietnam (30%), Indonesia (29%), and Thailand (28%). More developed countries in the region logged lower, Malaysia (21%) and Singapore (20%).
However, it’s a different matter when an e-commerce provider or seller is subjected to a cyberattack. The survey showed that the confidence of consumers to shop at stores that suffered data breaches dropped by 42% in general.
Yeo Siang Tiong, general manager for Southeast Asia at Kaspersky commented that while consumers are embracing the digital lifestyle and trusting these tools that make their financial transactions smooth and fast, they are also starting to gain an awareness of the dangers and risks of cyber threats in their personal lives.
“To put things in perspective, the cost of data breaches in SMBs rises by 54% but with early breach detection, the average losses would go 17% lower. The SMBs are now in a position to speed up their digital transformation. The radical changes to the demands and expectations of consumers can no longer be ignored or else, they might decide to bring their business elsewhere. I would venture to advise SMBs right now to act and ride the wave, so to speak,” added Yeo.
Experts from Kaspersky have advised SMB owners in Southeast Asia to be vigilant when using digital payments. This includes performing risks assessments by evaluating potentials risks that could compromise the business as well as training employees to be aware of phishing emails and such.
SMBs need to also keep their software updated as unpatched software is a common entry point for most cybercriminals. More importantly, with SMBs relying mostly on e-commerce, online sales, and digital payments, they need to ensure they back up their files regularly and also deploy robust cybersecurity software.
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