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.
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.
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