Digital payments are redefining how we spend, save, and conduct business. On April 16th, 2024, experts at FinTech LIVE Singapore’s “Digital Payments Panel Discussion” explored the far-reaching impact of this technology. 

Industry leaders including Mr. Kashif Khan (Standard Chartered), Mr. Khang Pham Ngoc (Home Credit Vietnam), and Mr. Kannan Rajaratnam (ZALORA Group) shared their perspectives on the challenges, opportunities, and trends shaping the future of financial transactions.

This article summarises those insights, examining how digital payments are transforming financial interactions in our increasingly interconnected world.

Kashif Khan’s Opening Statement:

Kashif Khan emphasised the pervasive use of digital payments, highlighting the transition to a hyperconnected world where consumer behaviour significantly shapes the financial ecosystem. He pointed out several advantages of this shift:

  • Security: Digital payments offer an unmatched level of security, reducing the risk associated with physical transactions.
  • Ease of Doing Business: The streamlined processes make transactions quicker and less cumbersome.
  • Lower Transaction Costs: Digital transactions typically incur lower fees compared to traditional methods.
  • Paperless Ecosystem: The move towards a digital, paperless ecosystem aligns with broader environmental and operational efficiency goals.
  • Inclusivity: Digital wallets and other fintech solutions have brought previously underbanked populations into the fold, providing them with access to essential financial services.

Khang Pham Ngoc’s Perspective:

Khang offered a reflective take on the evolution of digital payments:

  • Digital Transformation: He described the shift to digital as an extension of existing practices rather than a complete overhaul, suggesting a gradual integration into daily life.
  • Educational Needs: Highlighting the need for consumer education to ensure that people understand and trust digital payment systems.
  • Customer Relationship: He emphasised the importance of maintaining strong customer relationships to facilitate the digital transition, particularly in regions like Vietnam where digital adoption is still burgeoning and somewhat met with scepticism.

Kannan Rajaratnam’s Insights:

From the perspective of online retail, Kannan focused on customer experience:

  • Early Challenges: He recounted initial challenges in introducing new digital payment channels in 2012, when convincing customers of their benefits was tough.
  • Competitive Advantage: Businesses that adopted digital payments early gained a significant edge over competitors.
  • Transformation in Consumer Behavior: Reflecting on the drastic change over the years, he noted that regions like India, traditionally reliant on cash, now show a strong preference for digital methods.
  • Cost Efficiency and Multi-Bank Integration: He agreed with the benefits cited by Kashif, particularly highlighting the cost efficiencies and the seamless integration across multiple banking platforms in Asia.

Each speaker brought a unique viewpoint to the discussion, setting the stage for a comprehensive exploration of digital payments’ benefits, challenges, and emerging technologies throughout the panel.

Kashif Khan:

Kashif focused on the customer experience aspect of digital payments:

  • Hyper-Personalisation: He stressed that personalisation in digital payments must be driven by diverse data sets, enhancing the client experience at every touchpoint.
  • Expectations in UI/UX: Users expect smooth user interfaces and user experiences when interacting with digital payment systems, demanding seamless transactions with minimal manual intervention.
  • Security and Cost: Kashif noted that consumers now expect secure transactions, reduced costs, and complete visibility of their transaction journeys—features that were once considered differentiators but are now standard expectations.

Khang Pham Ngoc:

Khang emphasised the immediate and long-term benefits of digital payments:

  • Short-Term Benefits: He highlighted the convenience and cost-effectiveness of digital transactions facilitated by payment gateways and e-wallets.
  • Ecosystems and Use Cases: The expanding variety of use cases for customers through digital platforms enhances convenience and utility.
  • Long-Term Customer Relationships: Digital platforms allow businesses to gather detailed customer data, leading to deeper insights into customer habits and preferences. This data-driven understanding can lead to more consistent profits over time as businesses tailor their services more effectively to individual needs.

Kannan Rajaratnam:

Kannan discussed the practical impacts of digital payment methods on business operations:

  • P2P vs. COD: He noted that peer-to-peer (P2P) transactions tend to have a higher cancellation rate compared to cash on delivery (COD), which typically sees smaller transaction values.
  • Sales Stimulation: The convenience of P2P payments, despite the higher cancellation rates, generally stimulates higher sales volumes.
  • Evolving Payment Industry: Kannan pointed out that the payment industry continues to evolve rapidly, affecting how businesses and consumers interact with these technologies.

The panellists collectively underscored that digital payments enhance operational efficiency and customer convenience and can build a foundation for advanced, personalised customer relationships. This shift is crucial as businesses adapt to an increasingly digital economic landscape.

Kashif Khan:

Kashif highlighted the infrastructural and adoption challenges in different markets:

  • Varied Infrastructure: While some markets boast excellent digital communications and infrastructure, others lag significantly, creating barriers to adoption.
  • Fragmented Experiences: A major weakness is the fragmented digital experience which can deter customers from using digital payment services. Businesses need to ensure that each touchpoint in the customer journey is optimised to reduce effort and enhance reliability.

Khang Pham Ngoc:

From the perspective of Vietnam, Khang described the unique challenges in developing digital payment systems:

  • Fragmented Market: Vietnam’s digital payment experience is highly fragmented, making initial setup and customer adoption challenging.
  • Educational Needs: There is a crucial need to educate customers on using digital payment technologies effectively, starting with small transactions to gradually build trust and familiarity.
  • Long Transformation Journey: The journey toward widespread digital payment adoption is lengthy and requires patience. It is important for this transformation to occur at an appropriate pace to ensure sustainability and inclusiveness.

Kannan Rajaratnam:

Kannan discussed the operational challenges businesses encounter with the implementation of digital payment systems by central banks:

  • Operational Realignment: Businesses, especially smaller scale merchants, must adjust their operations to align with central bank digital initiatives. This can be a significant hurdle due to different operational scales and capabilities.
  • Opportunity from Challenge: Despite these challenges, there are opportunities for businesses to adapt and thrive by embracing a wide range of digital payment instruments, such as easier deployment of QR code systems.
  • Resource Intensity: The resources needed to maintain or improve digital payment systems are increasing, adding to the operational costs for businesses.

Each panellist brings a unique viewpoint on the operational, infrastructural, and educational challenges that businesses face in integrating digital payments into their systems. These insights reflect both the hurdles and the potential strategies that businesses can employ to navigate these challenges successfully.

Kashif Khan:

Kashif outlined three key technologies poised to revolutionise the digital payments sector:

  • Cloud Computing: Cloud technology enhances scalability and can significantly accelerate the customer experience in digital payments. It plays a crucial role in broadening the adoption and impact of digital payment services.
  • APIs (Application Programming Interfaces): APIs are critical in the fintech ecosystem, serving as the bridge that connects banking services with B2C wallets and other financial platforms. This connectivity facilitates ‘banking as a service’ and continuously transforms the banking and wallet space.
  • Artificial Intelligence (AI): AI is already making its mark with applications like chatbots in banking but has much broader potential. AI can drive hyper-personalization through machine learning, automate software repairs, and manage operations with minimal or no human intervention, enhancing efficiency and customer service.

Khang Pham Ngoc:

Khang emphasised the importance of aligning technological advancements with customer expectations, particularly for the younger, more tech-savvy generations:

  • Customer-Centric Technologies: As digital natives, Gen Z and subsequent generations expect high technological proficiency in their payment solutions, making it essential for payment systems to be intuitive, fast, and reliable.
  • Financial Education: Alongside technological advancement, financial education remains crucial. Educating customers about the benefits and operations of new technologies is vital for adoption and effective use.

As we conclude our exploration of the “Digital Payments Panel Discussion” at FinTech LIVE Singapore, it’s clear that the integration of emerging technologies is reshaping the landscape of digital payments. Industry leaders Kashif Khan, Khang Pham Ngoc, and Kannan Rajaratnam have highlighted the transformative potential of technologies such as cloud computing, APIs, and artificial intelligence. These innovations are poised to enhance scalability, connectivity, and personalisation within the sector.

The broader trends in digital payments also reflect a significant shift. According to McKinsey’s 2023 Global Payments Report, the increasing adoption of instant payments and digital wallets is driving revenue growth and displacing traditional cash transactions, particularly in markets like Brazil and Nigeria. This transition is supported by a consumer preference for convenience and lower transaction costs, which have been key drivers in the sustained increase in digital payment usage since the COVID-19 pandemic [1]. 

Furthermore, digital wallets are now responsible for a significant portion of point-of-sale transactions globally, indicating a shift towards more integrated and user-friendly payment solutions [2]. This trend is accompanied by a notable consumer shift towards fewer, more integrated digital wallets, underscoring the importance of ease of use and security as critical factors for adoption.

The evolution towards these sophisticated payment platforms suggests a future where digital payments are essential, seamlessly integrated into consumer lifestyles and business operations alike. For businesses, the challenge will be to adopt these technologies and also to innovate continuously to meet the rising expectations of a digitally savvy customer base. 

As we look toward the future of digital payments, embracing technologies that enhance ease of use and security is essential. For businesses seeking to stay ahead in this rapidly evolving landscape, AQX Pay offers an integrated payment solution designed for simplicity and efficiency. Connect with us here to find out more. 

[1] – Bionducci, L., Botta, A., Bruno, P., Denecker, O., Gathinji, C., Jain, R., Nadeau, M., & Sattanathan, B. (2023). On the cusp of the next payments era: Future opportunities for banks. In McKinsey & Company. [2] – Brandt, N. (2024, January 15). Digital Payments Statistics in 2024 (Latest U.S. & Global Data) | Ecommerce Tips. Ecommerce Tips.