From Online Pizza Orders to A Near Cashless Society – E-commerce, Then and Today
2019-06-04 11:43 Tuesday
The origins of e-payments can be traced to the early 1990s when companies like Pizza Hut first began to accept pizza orders online.The next major thrust forward came in 1999 with PayPal, an online payment system which provided an alternative to traditional payment methods like cash and checks. This was huge. At the time, PayPal was truly an innovator in a fairly bland industry of e-payments. In the beginning, people were hesitant to use e-payments due to a lack based on the unfamiliarity of trust in online system. E-payments became much more secure and efficient as the technology advanced, resulting in a more consumer trust. E-payments quickly became popular due to their convenience, as they were immediate and reduced transfer costs. For businesses, e-payments became preferred because they reduced risk by eliminating the concern for fake bills. As a result, online payments became accepted rapidly with the emergence of e-commerce sites such as Ebay and Amazon. Paypal, having one of the earliest footholds in the market since the beginning, quickly rose to become one of the largest platforms for online payments in the world today. PayPal easily maintains more than a $100 billion market capitalization, proving their market domination.
Since their origins, e-payments have now become a primary mode for making payments in every corner of the globe. China, in particular, has become a leader in the global cashless payment trend with a mobile payment market of US$12.77 trillion. Currently, more than 90 percent of the mobile payment industry is dominated by Tencent's WeChat Pay and Alibaba's Alipay.
Launched by Alibaba in 2004, Alipay became popular because it created an easier payment system for Alibaba customers. There were some initial trust issues which resulted in some transaction failures, but since then they have improved their payment infrastructure and grown into a top industry leader. The primary alternative to Alipay, WeChat digital wallet was launched in 2013 as a payment service for what would become largest social media app in China. With their already established customer base, WeChat Pay immediately grabbed a huge chunk of the mobile payment market. Between WeChat's social media dominance and Alibaba's foothold in the e-commerce market, both companies to easily solidified their place on the throne as dual kings of the mobile payments market.
The success of Alipay and WeChat are also driven by China's transition towards efficient technologies in general. According to a recent study, nearly 50 percent of the Chinese population typically has less than 100RMB of cash and much prefer digital currency payment methods. Cash and checks are now becoming a burden to the average consumer and using technology for purchases has become the primary method. Whether it's in a taxi or at cash register in shops, a QR Code can be found. When a customer scans the QR Code and verifies their credentials by entering a passcode or fingerprint ID, money will then be transferred from the customer to the seller. The buyer and seller both have bank accounts linked to the app, allowing the immediate transaction to take place.
As cultures around the world become more dependent on technology, various forms of online payments will be used with more and more frequency. While WeChat and Alipay giant players in China, they are looking to expand their dominance to foreign countries as well. The global mobile payments market is expected to grow to USD $3.3 trillion by 2023. With the influx of Chinese tourists overseas, both Alipay and WeChat pay have recently expanded into North America. Instead of creating an alternative app for uses outside of China, WeChat and Alipay are focusing on cross-border payment and overseas payment by signing up overseas merchants who would accept and utilize their payment systems. This means that soon, more and more retailers in America will accept WeChat and Alipay for transactions. And with no slowing in sight for Chinese tourism, more and more sellers from around the world are considering the adoption of this new mobile payment strategy to better serve their Chinese customers in a fast and familiar fashion.
To support the rapidly evolving payment industry at this important moment in its development, Duxes will host the Payment Asia Summit in Hongkong 2019 on November 7-8, 2019. The event will gather delegates from across the industry, representing financial institutions, technology companies, mobile service providers, retailers, and government authorities, to address the latest market and regulatory conditions across Asia, cutting-edge payment models including e-wallet functions and aggregate payments, applications for new technologies such as blockchain, cryptocurrencies, and artificial intelligence, improvements to the user experience and payment security, and advice for building a successful payment platform. The summit will provide a platform for attendees to share firsthand experiences and high-level knowledge, as well as network with industry peers from around the world.
Payment Asia HK:
Key Words: Mobile Payment, Digital Payment, E-Wallet, Aggregate Payment, FinTech, QR Code, Cross-Border Payment, Overseas Payment, E-Commerce, Artificial Intelligence, Payment Platform, Payment Security, Payment Infrastructure, Cashless Payment, Digital Wallet, Cryptocurrency, Digital Currency, Blockchain