In an era marked by unprecedented digital transformation, digital payment tools have emerged as indispensable enablers of commerce in both the online and offline realms. The future of payment is the future of commerce.

Over the past years, digital payment tools have revolutionized the way consumers and businesses engage in the online sphere, with this transformation not only offering customers flexibility but also encouraging repeat business and fostering brand loyalty.

At the 2023 INCLUSION Conference on the Bund, Douglas Feagin, head of Alipay+ cross-border mobile payment services and senior vice president of Ant Group; Tim Huang, head of corporate banking greater China, JP Morgan; and Shaozhang Ding, vice president of digital sales DFS Group, joined Roberto Chade, CEO, and co-founder of Dotz, to discuss how digital tools are unlocking growth for future commerce.

How are digital payments evolving?

Digital payment methods have come a long way, and their evolution is nothing short of revolutionary. Take Alipay in China, which currently serves over 1 billion consumers through its comprehensive lifestyle services app. 

Alipay’s success has also inspired similar innovations worldwide, as many countries have embraced new forms of digital payments.

One exciting development is Alipay+, which offers payment and marketing solutions for digital consumers and digitally enabled merchants to reach a total of 1.4 billion consumers globally.

An example that Feagin provided during the discussion was that of Alipay+ D-store, which was unveiled last year and is currently mainly used in the food and beverage sector, offering a one-stop solution that companies can use to quickly and affordably build digital stores across multiple platforms.

Digital wallets have become a bridge, enabling not just payments but also offering marketing tools and enhanced consumer engagement.

In the global travel retail industry, represented at this discussion by DFS Group, Alipay+ has assumed a pivotal role in engaging upper-funnel customers and creating international experiences. 

Similarly, companies like Dotz in Brazil are establishing digital payments as a “second currency” in the country, while they also collect data through their loyalty program and gain deep insights into consumer behavior and preferences.

Digitalization has been further accelerated in many countries over the past years as customers worldwide increasingly demand the convenience of mobile payments and digital services. This shift has fueled the adoption of advanced digital solutions and provided fertile ground for further innovation.

The evolution of digital payment methods, exemplified by platforms like Alipay and its global counterparts, is reshaping the way businesses engage with consumers, expand their reach, and secure transactions in an increasingly digitized world.

Misconceptions exist

However, misconceptions about digital payments persist, from consumer behavior to organizational readiness, as highlighted by the four speakers during the discussion. 

Despite the abundance of data and readily available technology, many companies struggle to harness them effectively in personalized communication. 

“Data is everywhere. Technology is available. But at the end of the day, we as consumers keep receiving magnified information communication from different companies that drive payments and consumer behavior,” said Chade, adding that this could be greatly improved if companies engaged in personalized communication and messaging.

From the organizational perspective, Ding stressed that digital transformation is an ongoing journey rather than a one-time event. “We need a lot of coaching, inspiration, education, and sometimes a baby step to help employees adapt to digital changes,” he said.

Like Ant Group’s expansion and investments in digital wallets around the world, Feagin said it reminds him of the significance of recognizing that not all countries are like China, where digital enablement is widespread. 

“Many of these countries are at a much earlier stage of development, so they don’t have that kind of embedded infrastructure.” Therefore, when seeking global expansion, companies need to be aware that countries at different stages of digital development require tailored approaches.

For instance, “beginning with simple peer-to-peer transactions, such as mobile phone top-ups and ride-hailing, can gradually lead to more complex use cases like online cross-border transactions,” said Feagin, adding that building comfort and confidence domestically is the stepping stone to international markets.

What will the future of digital payments look like?

The future of digital payments is poised to bring exciting possibilities, although predicting precisely how these tools will reshape the merchant-consumer landscape in five or ten years is a challenging task, given the rapid pace of change in the digital landscape. However, some key trends are emerging.

“Consumers of the future are likely to adopt a hybrid approach, combining online and offline experiences,” according to Chade.

He emphasized that this combination could offer the “best of both worlds,” where consumers enjoy personalized promotions online, transition seamlessly to the in-store experience, and make digital payments. But he said that he hadn’t seen many companies doing that yet.

Huang shared similar thoughts with Chade during the discussion. “I think it’s more important is, people want to buy things with experience. As they enjoy, they experience something, there’s always an impulse buy moment. You need to capture as a merchant.”

For travel retail, where decision-making often happens well in advance, connecting with customers before their journey will be crucial. 

“Travelers do very extensive research against their travel and also want to leverage all the information sources that would help them understand where they shop and what they should shop,” said Ding, adding that it’s “quite important” for them to connect the upper funnel customers before they travel.

Meanwhile, the influence of social media on consumer behavior will continue to play a significant role in shaping the digital landscape. 

While a lot of social media influences the things that people are already doing to follow the same pattern, leveraging more sophisticated forms of AI will help companies understand consumers on a deeper level and deliver products and experiences that align with their lifestyles and preferences.

The path forward is not without challenges, and collaboration among digital players and businesses will be essential. As the digital payment landscape continues to evolve, Ant Group and its partners look forward to innovating and driving this transformation to create a more interconnected and prosperous future.

This article was supported by Ant Group. We believe in transparency in our publishing and monetization model. Read more here.

With the theme of “Technology for a Sustainable Future,” the INCLUSION Conference on the Bund was held in Shanghai from September 7 to 9, bringing together global experts, scholars, and entrepreneurs to explore technological developments in economic industries.

On September 8, one of the events organizing committee members, Ant Group invited three overseas guests from the 10×1000 Tech for Inclusion program to the C3 Forum to share their views on the theme, “Building an inclusive digital economy with the new generation of innovators”: Nuraizah Shamsul Baharin (managing director of MADcash in Malaysia), Anbar Nawar (product manager at bKash in Bangladesh), and Opeyemi Praise (senior product manager at Sterling Bank in Nigeria). 

Underserved communities often face unique challenges when accessing and harnessing digital technologies. However, opportunities can emerge from developing the digital economy in these communities. The three guests individually presented insights into their local markets and the varied challenges involved in developing the digital economy.

10×1000 Tech for Inclusion Program Initiated by Ant Group and IFC

Before the panel discussion, the host briefly introduced the 10×1000 Tech for Inclusion Program, an initiative aimed at promoting tech inclusion and bridging the digital divide in underserved communities. 

The program focuses on providing support and resources to empower individuals and communities to fully participate in the digital economy. Its mission is to nurture and inspire at least 1,000 emerging talents and tech leaders each year for the next ten years. Currently, the program connects more than 5,000 individual talents in the global digital community, representing 96 countries and regions. 

Empowering women to build their own businesses in Malaysia

Fintech, short for financial technology, refers to the use of technology and innovation to provide financial services and solutions. It encompasses a broad spectrum of digital tools, applications, and platforms designed to enhance and streamline various aspects of financial activities, including banking, payments, investments, lending, and insurance.

MADCash in Malaysia is a financial service provider that offers a range of cash loan options to individuals in Malaysia, with a particular focus on underprivileged groups including women with limited educational backgrounds. MADCash offers personal loans with flexible repayment options, aiming to provide a hassle-free loan application process with minimal documentation requirements and fast approval times. 

MADCash stands for “multiply, assist, donate cash”, Nuraizah Shamsul Baharin, the managing director of MADCash explained at the panel. “We provide small funds for female entrepreneurs in our country who do not have access to credit. They cannot get loans since they are high risks for traditional banks, but we can help them build their small business,” she said.

In many developed countries and regions, resources related to education and employment are not equally accessible to women. Therefore, women face more obstacles in building their own startups, as most traditional banks often decline their loans for investments, due to factors such as credit history, educational background, and employment experiences. MADCash looks to offer one model for bypassing these traditional barriers.

Fostering trust in the digital economy for local customers in Bangladesh

bKash is a mobile financial service in Bangladesh, offering a diverse range of financial services, including money transfers, bill payments, mobile top-ups, and more, through a mobile app or USSD code. bKash has played a significant role in promoting financial inclusion in Bangladesh, especially among the unbanked population. One of the key advantages of bKash is its convenience. Users can easily send and receive money, pay bills, and make purchases using their mobile phones, without the need for a traditional bank account. 

However, a key challenge lies in ensuring trust and security in digital technology. Like any digital financial service, there is always a risk of fraud and unauthorized access to personal information. It is crucial for both bKash and its users to prioritize security measures and educate customers about safe usage practices.

“First of all, what we really struggle with is the dependency on cash. There is a huge difference between cities and semi-urban or rural areas,” Anbar Nawar, product manager at bKash, explained “People don’t have access to a lot of technological knowledge, so they are more prone to using cash, even if we provide them with enough awareness about our apps, and our services. No matter how easy that is, they feel more comfortable with cash.”

In addition to trust issues, Anbar also elaborated on other challenges, including employment difficulties for technological talents in Bangladesh, huge differences between urban and rural areas, and the need for financial-related education for local people.

Emerging markets and opportunities in Nigeria

Sterling Bank is a leading financial institution in Nigeria, offering a wide range of financial services to individuals, businesses, and institutions. It provides various financial services, including personal banking, corporate banking, asset management, treasury services, and electronic banking solutions. 

Similar to many banks in Nigeria, Sterling Bank has embraced digital banking to provide its customers with convenient and efficient banking services. This consists of internet banking, mobile banking, and other digital channels for transactions and account management.

“Last year, the total electronic transactions reached $1.7 trillion in Nigeria. It is projected to grow by 30% this year, at least, Opeyemi Praise, senior product manager at Sterling Bank, told the conference. “The internet penetration is 95% in our country. The challenge is that we need to advocate for overseas investors to localize their digital products for the local market.” 

Another key challenge that Praise mentioned was the need for educational training in financial and technological fields for the younger generations in Nigeria. Young people under the age of 30 comprise more than 70 percent of Nigeria’s population, he added, indicating enormous potential in the digital economy for this African country.

This article was supported by Ant Group. We believe in transparency in our publishing and monetization model. Read more here.

In a world of widespread economic uncertainty throughout most of 2023, small- and medium-sized enterprises (SMEs) are looking for new technological solutions to accelerate their businesses in a volatile period following the sudden impact of the COVID-19 pandemic.

A senior executive at China’s Ant Group expected digitalization driven by innovative technologies to become a key factor during the post-pandemic recovery, especially the prosperity of SMEs, while also reducing financial exclusion and enhancing data security. 

Speaking during a panel discussion at this year’s INCLUSION·Conference on the Bund in Shanghai, Yang Peng, President of the International Business Group at Ant Group, said that digital transformation could help deepen SME merchants’ ties to consumers, and drive commerce with more growth tools. He also called for more collaborations among organizations to unleash the full potential of the digital economy.

Fragmented payment landscape

As the pandemic fueled a surge in online shopping and digital payments worldwide, almost all economies of the world have adopted payment innovations, significantly accelerating the development of e-wallets, bank apps, and super apps with a pay button.

However, technologies and support systems behind payment methods are not coordinated. In some countries, there are dozens of payment logos covering up a tiny cashier space. Because of this fragmented landscape, businesses, especially SMEs, face an incredibly complicated payment management situation. 

“SMEs do need a helping hand on the payment side,” said Yang. “They should primarily focus on their businesses and services to serve their customers without spending too much resources on payment.

In 2016, Ant Group initiated efforts to develop Alipay+, a suite of cross-border digital payment and marketing solutions. According to Yang, today Alipay+ connects over 20 payment apps from Thailand to Italy, allowing consumers to use their familiar e-wallets wherever they go. This also allows merchants to focus on improving their products and fine-tuning their services, without the need to handle the maze of payment routes.

SMEs go digital

Payment is the end of a positive consumer journey but also could be the beginning of many new ones. According to Yang, digitalization solutions derived from digital payment can do more to help businesses and the economy, and “many SMEs are hungry for growth and want to harvest the benefit from digitalization”. 

Ant Group is expanding SMEs’ access to more digital technologies, which reduces the barriers to market entry and enables them to operate more efficiently, saving them both time and resources. In November 2022, the Chinese fintech giant further strengthened these efforts with the launch of its Alipay+ D-store solution, enabling SMEs to build their all-in-one store across platforms and connect with different payment channels in just a few minutes using a suite of toolkits.

In Southeast Asia, with a large infrastructure deficit, there is still very limited access to digital and financial services for SMEs. Still, the demand is booming. According to Timothy Utama, Information Technology Director at Bank Mandiri, Indonesia’s state-controlled lender, Indonesia is not as big as China, but there is a lot of water in between which becomes a demographic challenge for financial services.

“We have 3.6 million SMEs in Thailand, which accounts for roughly 44% of the country’s GDP. This can really be a contributing factor if you can make a change,” echoed Monsinee Nakapanant, Co-President of Thailand’s online payment provider Ascend Money.

Privacy computing is a key

The wider adoption of digital technologies brings an increasing demand for data collaborations, which is, however, hindered by concerns such as data security, privacy, and confidentiality.

“We believe privacy-preserving computing (PPC) is a very powerful solution to address that issue of trust and efficiency,” said Yang, “PPC processes privacy data by encryption processing, multi-party computing, and other techniques. With PPC, Company A can share insights generated from its big data with Company B, without the need to provide the raw data to Company B. In other words, data becomes available for use but not visible, which mitigates the data privacy concern and meets regulatory requirements.” 

Yang also sees the urgent need for increased collaboration among various stakeholders to promote the technology and build an ecosystem as it extends beyond the technology itself. He envisions a more connected digital economy in which each party can fully harness the potential of data in the next decade. 

“In this new technological era, collaboration is the new way to compete,” said Utama at Bank Mandiri. “People usually say data is the new ore, but I would say show me the way to extract the ore. This is difficult to monetize. We learn from our partners, work with them, and move forward together as a win-win.”

The comments come a year after Ant Group announced the open source of its privacy-preserving computing framework last July, a project that would enable data analysis for different use cases without the need for decryption of original individual data. The company released an updated version in July this year to further address the pain points in data collaborations among parties. 

Ensuring security with AI

The Asian tech and finance industry is also ramping up efforts to address some of the most pressing issues with new technologies, such as biometrics and artificial intelligence, as online fraud evolves in the region.

Ascend Money has been using biometrics and AI to detect suspicious transactions and prevent hackers’ invasions with the help of Ant Group. Southeast Asia’s second-biggest economy posted losses of $1 billion from online fraud and digital attacks last year, according to Nakapanant of Ascend Money. 

Meanwhile, American Express enjoys the lowest fraud rates in the industry, as the world’s fourth largest credit card network rebuilt its platform entirely on an end-to-end, closed-loop, modern architecture. “That’s something you probably see as well on the Ant Group side,” Mohammed Badi, President of Global Network Services at American Express, said in the same panel discussion. 

Ant Group reported last December that it sends over 500,000 alerts to users on average each day via its transaction fraud detection system, which can identify potential fraud in seconds and has been deployed on its Alipay app and partners’ platforms. 

“You can’t have true innovation at scale if the platform is insecure and if you’re not compliant with the laws and regulations of the land,” Badi added.

This article was supported by Ant Group. We believe in transparency in our publishing and monetization model. Read more here.