Visa: Businesses need to digitize as consumption shifts online and contactless payments become even more common
• Visa eCommerce volume, excluding travel-related purchases, expanded by 10 points in the first half of this year – with more than one-third of Hong Kong consumers willing to shop online more frequently during the pandemic
• Over half (55 percent) of consumers in Asia Pacific would use tap to phone payments at the checkout counter – Hong Kong consumers are among the region’s keenest at 62 percent
• More than 70 percent of face-to-face Visa transactions in HK are now contactless - higher than the percentage average across the region (41 percent)
Visa sees opportunities for businesses to transform, by accelerating the availability of online payments and Tap to Phone solutions, as consumers in Hong Kong and other Asia Pacific markets turn to digital payments during the COVID-19 pandemic.
Research by Visa has found that since the pandemic started, one-fifth of consumers in Asia Pacific are going online for the first time. In Hong Kong, Visa’s study shows that one-third (35 percent) of consumers are more willing to shop online during the pandemic, with 67 percent agreeing that it is important for businesses to have online presence.1
Maaike Steinebach, Visa General Manager, Hong Kong and Macau: “Hong Kong along with the rest of Asia Pacific has led the world in adopting digital payments during the pandemic. We have seen eCommerce, excluding travel-related spending, expand by 10 points,2 largely because of an increase in grocery and food deliveries. At the same time, we have also seen an uptick in cross-border eCommerce transactions, as people compensate from not being able to travel abroad. Given this changing landscape, businesses need to seize the opportunity to enhance their digital presence and capabilities.”
In order to help business tap into this increasing demand for eCommerce, Visa launched in the May the eCommerce Starter Pack3 in partnership with Boutir. This aims to help small businesses sell online for the first time, opening up new revenue sources as brick-and-mortar retail demand dwindles.
Tap to phone: contactless payments for everyone
The virus has meant that more consumers are now choosing to pay digitally at shops or retailers. Contactless payments now account for more than 70 percent of face-to-face Visa transactions in Hong Kong, up 10 percentage points from comparable figures before the pandemic and far greater than the 41 percent average across region.4
This has led to Visa launching Tap to Phone solutions in key Asia Pacific markets. Tap to Phone enables sellers to accept Visa contactless payments directly on their own Android NFC-enabled smartphone, without the need for a separate payment acceptance terminal.
New research from Visa5 found that the majority (55 percent) of Asia Pacific consumers would likely tap and pay to a seller’s phone, despite solutions not yet being widely available in the region. Consumer interest is strongest in Malaysia (64 percent), followed by Hong Kong (62 percent), Taiwan (62 percent), and India (55 percent). The research suggests that as “tap to phone" solutions are introduced in Asia Pacific, consumers will embrace this new form of contactless payments because it is used in a similar way to options that are already available.
“The consumer experience with tap to phone payments is very similar to what is already being used, including the security features. Instead of tapping your card, phone or smart device on a point-of-sale terminal, you tap on the seller’s smartphone to pay. For the seller, this means they can accept digital payments without having to get a separate terminal. For micro and small businesses, Tap to Phone is a cost-effective way to accept Visa and enjoy the benefits of digital commerce,” said Ms. Steinebach.
Ease, convenience and not needing to use cash appeal to consumers
Tap to Phone solutions simplify point-of-sale infrastructure for businesses. Its benefits to consumers are ease of use – rated as the top reason (52 percent) that would encourage users to try tap to phone –time saving (51 percent) and eliminating the need to carry cash (50 percent).
More than 40 percent of consumers (43 percent) rated security as a factor that would encourage them to adopt tap to phone payments. However, Visa believes that there is a need for the industry to work together to educate consumers about security features. Losing personal or financial information were named as the top concerns around using tap to phone.
Tap to phone solutions bring multiple layers of security on both the buyer and seller side, to ensure that Visa’s high standards for secure payments are met. Each solution undergoes an intensive certification process including a security assessment by an accredited expert security lab. These solutions are also supported by an industry standard that has been developed and published by the PCI Security Standards Council.
Convenience stores, restaurants and food courts popular scenarios for tap to phone
Visa’s research also looked at the scenarios where consumers would be most likely to pay via tap to phone. Convenience stores were cited by 59 percent of survey participants, reflecting the desire for quick, easy transactions. Over half (56 percent) said they would want to be able to pay at a restaurant while seated at the table. Food courts, street stalls and kiosks were the third most popular scenario at 52 percent.
“Typical of Hong Kong, customers at convenience stores, restaurants and small retail stores don’t want to be slowed down by a cumbersome payment transaction. And for these businesses, speed and convenience in serving their customers is a priority. Tap to phone is a new option for these businesses to consider, especially if they’re not yet accepting digital payments. In light of the consumer demand and opportunity for businesses, Visa is collaborating with our partners to bring more tap to phone solutions to Asia Pacific,” said Ms. Steinebach.
Visa is working with and has certified nine technology providers and is partnering with many acquirers to bring the solutions to market. Visa and its partners have launched tap-to-phone solutions in Malaysia and India, with more Asia Pacific markets to follow in the coming months.
1 Visa-commissioned YouGov research from 16 to 20 July, with a sample size of 1,020 adults in Hong Kong
2 VisaNet: January to June 2020
3 Visa supports SMEs with digital transformation and eCommerce initiatives as companies warn of pain points
5 The Visa Asia Pacific Tap to Phone study was conducted by YouGov research between 16 to 20 July 2020, among 6,832 adults across seven markets – Australia, Hong Kong, India, Malaysia, New Zealand, Singapore and Taiwan.
About Visa Inc.
Visa Inc. is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device, for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, visa.com/blog and @VisaNews.