“If you’re not paying for it, you become the product”.

It is a common phrase used to describe how large and profitable tech companies make money through “free services”. Whatsapp’s latest privacy policy update lends credence to this euphemism.

When I — like the rest of the two billion users — received a WhatsApp notification about the recent policy terms update, I was curious to know what it was.

After reading the terms, it became clear to me that the app is simply trying to ask for permission to share my data with its parent company Facebook, effective Feb 8, 2021.

While end-to-end private chats continue to remain encrypted, here are the kinds of data WhatsApp will share with Facebook and Instagram: phone numbers, status updates, group details, profile pictures, about info, payments, transactions, time zone and IP address.

This essentially means Whatsapp has taken a 360-degree in terms of its privacy policy.

Also Read: What you need to know about data privacy in China

The company’s 2019 privacy policy terms says: “Respect for your privacy is coded into our DNA. Since we started WhatsApp, we’ve aspired to build our Services with a set of strong privacy principles in mind.”

This line has since been completely scraped off in the 2021 policy.

If you’re one among those who feel creeped out in the past wondering why you have been receiving ads of sports shoes after just having a private conversation with a friend, prepare to get even more surprised.

The new privacy means Whatsapp will now be able to monitor the kinds of links of products/other things that you send your friends and families and use them to send it to other ads companies/brands.

In other words, Facebook now has total access to your data.

That’s not all the user data will be available not just to the businesses you are transacting with, but will also be available to other third parties that are working with these businesses.

Still hard to digest? Then look at the Cambridge Analytica Scandal of 2019, which clearly showed how Facebook in the past let third-party app developers access our personal data, who in turn sold it to companies which used it for different exploitative and illegal purposes.

What Whatsapp had to say

While these can be regarded as just opinions from a user, it will be unfair to bash Whatsapp without hearing the company out.

Will Cathcart, Head of Whatsapp, said, “We’ve updated our policy to be transparent and to better describe optional people-to-business features. We wrote about it in October — this includes commerce on WhatsApp and the ability for people to message a business.”

He added that businesses want tools to respond quickly to the messages sent to them and features such as Shops and Pay can help people buy things they want from businesses on WhatsApp much more easily.

While this justification sounds valid, it still cannot be denied that Facebook is now too big and wields immense power over our choices and compulsive needs. Not to forget the company’s long list of user data-related sins in the past year.

Big names, including Elon Musk, have also come out in the open to urge people to find alternative messaging channels, such as Signal and Telegram.

While being okay with the new policy is really a choice that each one has, it is important to understand fully what the terms are before you click on the dangerous green “I agree” button.

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Indonesia-based online B2B FMGG marketplace GudangAda announced today that it has appointed Huan Yang, former Head of Engineering at Grab Singapore, as its first CTO.

The news comes shortly after GudangAda successfully raised over US$30 million in a seed funding round, led by early-stage VC firms Alpha JWC Ventures and Wavemaker Partners.

In his new role, Yang will be responsible for managing technology for the platform and further growing its platform.

With an impressive career track record, Yang has spent over 13 years working with tech giants such as Google, Facebook, Uber and Grab as their software and engineering manager.

Yang joins GudangAda from Grab Singapore, where he was previously heading its Engineering teams in Singapore, Jakarta and Beijing to develop solutions to the company’s critical food delivery challenges.

Also Read: How two-year-old GudangAda managed to keep VCs interest ‘intact’ despite COVID-19

GudangAda believes Yang’s global exposure of having worked in different countries including Singapore, Shanghai, London and San Francisco will bring in a fresh perspective for the company.

“…we have already experienced significant growth in 2020 and I am looking forward to Yang’s contribution to help advance our platform and accelerate our growth moving forward,” Steven Sang, CEO of GudangAda said.

Huan’s appointment will be key to the company’s expansion plans, as it seeks to aggressively expand to more cities in the archipelago, further develop its warehousing and logistics offerings, and move into new product categories beyond the FMCG industry.

Founded in 2019, GudangAda connects small mom-and-pop retailers with wholesalers. The platform empowers the FMCG supply chain by enabling traders to become both a seller and buyer while facilitating bulk transactions between traders.

It claims to have established a presence in more than 500 locations in Indonesia with over 300,000 merchants.

Its technology solutions are mainly aimed at helping SMEs by providing a full suite of services starting from sourcing the product, managing sales and purchases, offering logistics transportation, and handling payments.

Also Read: Indonesian B2B marketplace for FMCG gudangada secures seed funding led by Alpha JWC, Wavemaker

Yang said: “Many traditional business players in Indonesia face constant challenges due to inefficient operations, low productivity or higher costs, and have difficulty adopting the technology. Working with GudangAda to deliver fast, cost-efficient and seamless solutions to benefit stakeholders is something I am truly passionate about.”

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Image Credit: GudangAda

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Pintek, a fintech platform that provides credit to students and their families, educational institutions and their suppliers, raised a US$21 million debt facility from Accial Capital, a US-based impact-focused private debt investor.

With this debt facility, both Pintek and Accial hope to further accelerate the penetration of educational financing and contribute to a more accessible, inclusive educational ecosystem in Indonesia.

This comes fresh off Pintek’s fundraising round led by Finch Capital last month.

Started in 2018, Pintek, owned and operated by SoCap, aims to improve the access to investments in education in the archipelago by providing financial access to all communities and educational institutions and their suppliers.

Also Read: Pintek secures investment to help students, education institutions access loans in Indonesia

As of December, it claims to have partnered with more than 190 institutions in the K-12, vocational, higher education and non-formal segments, and has distributed credit to customers across more than 26 provinces in the country.

Pintek Co-founder Ioann Fainsilber said: “Being in a situation full of challenges, education institutions need to implement technologies to support the adoption of distance learning for their students. However, in part due to a lack of financial resources, the implementation of technology across the sector has been challenging. We build products to help this crucial juncture for the Indonesian education ecosystem.”

Tommy Yuwono, Co-founder and President Director, Pintek, added: “This is an opportunity for us to fully support the Ministry of Education and Culture’s key programme regarding the adoption of school digitisation as an effort to prepare human resources to face the industry 4.0 era. This allows us to provide smart financing solutions for educational institutions to maximise technology in teaching and learning activities, as well as achieving education 4.0.”

Also Read: Investree receives US$15M from Accial Capital to provide loans to Indonesian SMEs

Accial is an impact-focused, tech-enabled investor in small business and consumer loan portfolios in Latin America and Southeast Asia. Accial Capital combines data, technology, capital, and credit expertise to contribute to a world of widespread credit access and financial health.

Last November, Accial injected US$15 million into Indonesia’s fintech lending platform Investree.

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Image Credit: Pintek

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1 year. 45 webinars. 1500 attendees. 8000 minutes of engagement. And over 50000 views (social media streaming)…..2020 was one roller coaster for the webinar curators and producers at e27.

Almost as if foresight, we jumped onto the bandwagon in late 2019 with Tedx speakers in tow. By the time lockdown hit, we were already putting out episode after another to share founder stories, VCs’ take on the days ahead, how to manage your startup amidst a pandemic; as if it were regular business.

We at e27 are extremely proud of the output and we could have not done this without you, our dear reader and all our fabulous speakers. Thank you for your enthusiasm, all the feedback on how we could keep improving the webinars and sharing your stories.

We wont let the tons of words, insights and ideas exchange fade just as yet. As we settle into 2021, here’s some of the best guidance and know-how from our webinar series in 2020 to lead us into a more promising and productive year!

Remote work is here to stay

Well, as much as we would like, going back to office seems like a distant dream. So take these tried and tested tips from Esevel founder Yuying Deng on how to successfully set up your home office.

Have a great year ahead!

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Image credit: GR Stocks on Unsplash

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From peer-to-peer lending and robo-advisors to digital banking and crowdfunding, fintech is redefining traditional financial institutions as Singapore charts its path to becoming a leading regional and global financial centre.

This has presented numerous opportunities to the financial sector, with consumers reaping the benefits of tech-enabled features and services that make it easier to invest, make payments or even get loans.

These new services have also spurred job creation in the industry, with demand for talent in user experience or user interface design, data analytics, and IT security.

However, the automation of services like investing or wealth management also poses a threat to the existing workforce, with existing roles at risk of being phased out or revamped.

Global fintech hubs like the US and UK have already experienced large job cuts over the past few years, due to industry-wide restructuring and automation of traditional banking roles.

The impact isn’t just limited to the West either. HSBC, the UK’s largest bank, is in the midst of cutting up to 35,000 jobs globally, as have Citigroup and Deutsche Bank AG.

These are pressing challenges that loom ahead for Singapore, too. In August, Monetary Authority of Singapore (MAS) MD Jacqueline Loh emphasised that while financial institutions have managed to subdue retrenchment levels thus far, it is critical to start redesigning jobs and encouraging employees to acquire new skills to adapt to the pervasive use of technology in the industry.

As we continue to integrate new technologies and innovations in our financial space, how can local financial powerhouses embrace these developments that are turbocharging the future of finance? More importantly, how can we still ensure that our current and emerging talents transition well in this evolving landscape, and have a seat in the future of this sector?

The value of a “high tech, high touch” approach

While the tools of the trade have evolved in recent years, the underlying goals in financial planning and wealth management still remain largely the same. Many readers would agree that despite many financial services going digital, managing money is still largely a personal decision that requires trust, clarity and education from financial institutions.

As such, we have adopted a “high tech, high touch” approach where our clients can reap the benefits of tech-empowered solutions, with all the clarity and understanding of seasoned experts to guide them through their investment journey.

In this way, we believe that clients are engaged holistically through various touch points to cater to their investment needs, wealth management goals and trading preferences. This approach also future-proofs our own workforce as one that complements and breathes life into digital services, rather than existing as a separate component.

Beyond just serving the needs of the current generation, this “high tech, high touch” approach ensures that the workforce remains resilient and ready to provide a hyper-personalised experience for the next generation of customers, alongside needed financial literacy and advisory in what could be a less “interactive” financial landscape.

Keeping current talent up to speed

There are concerns that the rising demand for tech roles in the industry will outstrip our current workforce’s pace to build the relevant skills. Earlier this year, the MAS conducted a pilot employment outlook survey that projected hiring and job losses from July 2020 to June 2021.

The survey revealed that tech-related roles lead the hiring demand among financial institutions in the coming year, accounting for 49 per cent of new jobs created. These include intermediate level roles such as application developers and business analysts, which are roles that Singaporeans can potentially be trained for. While our current talent supply might not be able to fill more advanced and specialised roles, we can re-skill and up skill our mid-career professionals to take on the jobs of tomorrow, alleviating fears of being left behind in their existing roles.

In this regard, both companies and their employees have a shared responsibility in building a strong learning culture – one that incentivises adaptability and resilience among all employees.

On the part of companies, training and re skilling programmes are beneficial to help employees deepen their expertise and acquire new skills. Within our own organisation, we have developed training roadmaps across all job functions to meet both current and future skills and competencies, in areas like wealth management, tech-enabled financial services, and data analytics.

Also read: What will the next wave of VC investment in HR tech look like?

This creates opportunities for current talent to develop transferrable skills across domains in the financial industry, which can support their transition into existing jobs with new skill requisites, or new jobs which require different capabilities.

At the same time, these programmes can focus on developing soft skills in areas like critical thinking, problem solving and creativity – which allows our financial advisors and trading representatives to relate to customers, educate them, and value-add to the digital services. Having a blend of both will enable current employees to not only broaden their technical capabilities, but also adapt and excel in the fast-evolving industry.

As for current employees, wherever they may be in their career journeys, it is high time to seize these new opportunities created to deepen their knowledge and capabilities. Having an appetite for learning is lifelong, and a key ingredient for continued success and resilience in this ever-evolving sector.

Grooming future talent for the financial space

As a homegrown financial house, PhillipCapital remains anchored in Singapore’s financial landscape and is committed to contributing to the recovery and growth of our local economy. We are working to recruit and train 500 Financial Adviser (FA) Representatives, and have received applications from individuals of all walks of life, including fresh graduates, as well as mid-career switchers who are exploring a career in the financial industry.

Currently, we also offer SGUnited traineeships for both fresh graduates and mid-career professionals to gain exposure in the financial sector, as well as meaningful internships with interesting projects in areas like digital innovation. As Singapore continues its quest to become a global financial hub, we hope to play a role in grooming the future workforce to serve an increasingly diverse pool of clients, while building a strong and sustainable pipeline of local talent.

We are also working hard to deepen our digital capabilities, while supporting our talents to harness their potential to serve the next generation of clients. We have built a strong local talent pool of over 100 tech specialists and engineers, all of whom have been trained to leverage tech-enabled financial solutions to cater to a diverse range of customer needs and goals. As part of our continued efforts to raise financial literacy and awareness among both our employees and members of the financial space at large, we are also working closely with our innovation team to organise hack-a-thons and financial education programmes.

Also read: Fintech in Indonesia: While growth declines, companies continue to gain traction

Through these initiatives, we believe that we can attract the next breed of financial educators and professionals to deliver better customer experiences and more personalised engagements, which are ever more important in this digital age.

Prized skillsets for the next generation

These are truly exciting times, and a career in this fast-paced, dynamic industry can be as challenging as it is rewarding. Besides future-oriented skills such as data analytics and data visualisation, the next generation will also need forward-thinking attributes to learn, unlearn and relearn in an increasingly flexible, horizontal organisation structure.

Based on our experience, we have identified three key attributes that have helped our talents make their mark in the industry:

Eagerness to learn

Whether you are a fresh graduate, or looking for a career switch, there is a seat for you if you are open and willing to learn. This industry welcomes anyone with easily transferrable skills, even if they are not from a financial services-related background.

Adaptability to changes

Change is a constant in this industry, so it is important to always be on your toes and embrace new developments, especially when innovation continually pushes the financial sector to evolve. From big data and automation to AI and machine learning, there are boundless opportunities to explore and learn invaluable new skills to capitalise on fintech’s increasing integration with the industry.

Drive to impact lives

It is easy to get distracted or disheartened by the potential disruptions that from fintech, but instead, we can focus on the bigger picture and recognise its complementary value in serving our clients’ needs. The human touch is still vital in understanding and empowering our clients to take charge of their financial future. As such, the onus is on current and future talents to never lose sight of their ability to effect meaningful change in their clients’ lives.

Thriving in a tech-first financial space through literacy, inclusion, and flexibility

Singapore’s financial landscape is at a critical turning point, especially when new digital bank entrants are set to shake up our traditional understanding of banking processes and wealth management.

While we cannot foresee the technologies that will come, or the future roles that will open up, we can be ready to help clients adapt and make the most out of new technologies – be it for wealth management, investment, micro loans, or even business growth.

Whatever this might be, we believe that training the future workforce to prioritise financial literacy, financial inclusion and financial flexibility will enable them to engage clients holistically and meaningfully, such that both individuals and the industry can grow as a whole and embrace the rapid changes of fintech adoption.

In turn, we can turn job security risks into opportunities for growth and thrive with continued resilience in the financial sector.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

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The Halal meat scandal in Malaysia that was uncovered last month has outraged the Muslims in the country. A national newspaper has uncovered that not only was the beef was falsely labeled as Halal, but they might not even be beef at all.

This is just the tip of the iceberg; this food fraud is happening globally, but exposed first in Malaysia. Just wait a few days or weeks, more will be exposed around the world.

Imported fake beef

Malaysia, as well as other Muslim countries around the world, typically import their meat supply from abroad. Malaysia’s Islamic Development Department provides Halal accreditation to meat processing plants in Australia, Argentina, Brazil, India, Japan, New Zealand, Pakistan, South Africa, and the United States.

The fake Halal meat was instead imported from countries such as Colombia, China and Ukraine. Then it was packaged with a fake halal logo. 

However, the issue is beyond just Halal certification; it is outright fraud. Horse or kangaroo meat, or just tainted poor quality, or even diseased beef has been repackaged as quality meat products with Halal logo.

Once the fake Halal meat arrives at ports in Malaysia, the shipment would bypass inspection courtesy of corrupt officials at the ports collaborating with smugglers.

They would then relabel the meat as Halal using existing brands that have Halal certification and distribute them together with authentic brands. Simply put, it is just like buying a counterfeit designer brand.

The only difference is with counterfeit designer brands the only thing that at stake is the buyer’s ego. In Halal food, scandal buyers have no idea the meat is not halal, unsafe, and are putting their health at risk. It is suggested that the Halal food fraud has been going on for 40 years.  

Technology solutions to combat food fraud

The issue of food fraud is not new, globally. Countries such as China and the US have faced this issue before.

Food fraud becomes possible as the gap from farm to fork grows, meaning that as we no longer buy food directly from farmers, there are now more players involved in the food supply chain.

It is estimated that there are at least six players involved in the food supply chain before we can consume our food. These are the farmers, food production, food processing and packaging, storage, wholesale distribution, and finally the supermarkets.

There is now a technology that can combat food fraud is blockchain, which is also the technology behind bitcoins.

Also read: Foodtech in Singapore through the eyes of startups

Blockchain is essentially decentralised ledgers distributed across many parties, recording every single transaction which is secured with cryptography technology. This means that no hacker can change the data, as the data are not stored by one centralised system but across multiple parties.

By using blockchain technology, the food industry can now ensure that the food sold is traceable back to the source. Food fraud typically involves mislabeling or using fake labels, as in the case of the Malaysian Halal meat scandal.

Global startups using blockchain technology for Halal marketplaces

The real problem is until now, there is no affordable solution that can trace our food from farm to fork. In the past, because of traceability, labour conditions have improved and human trafficking has taken a nosedive.

Big brands had to face consumer backlash when their product was made by people under extremely poor working conditions. It is all because somebody was able to trace where the product came from. Today, there is a technology that can detect whether a package of food back to its origins in an instant.

OneAgrix, a global startup, appears to have a solution to mitigate the problem of food fraud significantly if not eradicate it totally. They provide a B2B cross-border marketplace platform for Halal food, agricultural and nutraceutical products using blockchain technology and food DNA tracing.

OneAgrix has the technology to ensure transparency, traceability and trust in the food supply chain. The CEO and founder Diana Sabrain has been advocating food traceability and Halal authenticity well before the Malaysia meat scandal was exposed. The company started its operations in 2018.

According to OneAgrix’s CEO, Diana Sabrain, “The agri-food sector is one of the last sectors to use advanced technology.”

OneAgrix works with a number of Halal certification bodies across the world to ensure the foods’ Halal authenticity as well as laboratories to ensure that the products are not tainted with non-Halal content, such as pork or alcohol.

To ensure the company’s success, OneAgrix founders also waited for the right time to launch their startup. Sabrain said in an interview with Halalop earlier that three years ago, technology wasn’t available like it is now. So, they did not go into the market immediately, but worked quietly in the background to build the platform by making contacts and looking into which technologies to integrate.

The global Halal food is estimated to be worth US$1.17 trillion of spending by 1.9 billion Muslims in 2019, according to the Dinar Standard’s report on the State of the Global Islamic Economy.

If anything is to be learned from this scandal on a national level, it is that the time is now ripe for Malaysia to use blockchain in its food supply chain, especially for the Halal food sector. If not, the trust issue will remain against the Halal Malaysia certification and its impact on Malaysia US$9 billion worth of Halal trade exports.

The market is big enough for other startups to contribute and play a role in ensuring food traceability from farm to fork.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page

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Word of a potential Grab-gojek merger has commanded attention all over Southeast Asia. While such a merger could bring a myriad of opportunities in fintech and the digital space, a unification of the two Southeast Asian tech stars also raised fears of a monopoly in the ride-hailing, food delivery and payments industry.

The proposed marriage between the two has also stirred dissent amongst drivers all over Indonesia, with motorbike driver unions threatening to spark nationwide protests in a wager to protect their livelihoods. 

However, talks of a merger between Grab and gojek have reached an impasse with management failing to reach a consensus on firm ownership. Instead, gojek has begun on another trajectory, as they advance on merger talks with one of Indonesia’s top e-commerce firms Tokopedia.

How then will a successful gojek-Tokopedia merger impact the Southeast Asian e-commerce space, particularly in Indonesia? And in what ways would the consequences of such a merger differ from that of a Grab-gojek marriage? 

Indonesian-based gojek and Tokopedia combined would amass a valuation of at least US$18 billion. With an active user base of 29 million and 100 million respectively, both gojek and Tokopedia would be able to tap on the other’s user network, appealing to an already loyal customer base.

As both entities possess strongholds in the Indonesian market, a merger would propel the firm to dominate Indonesia, Southeast Asia’s largest and fastest-growing internet economy, vying with contenders Grab, Sea Group’s Shopee and Lazada.

Also Read: Grab-gojek or Tokopedia-gojek: which merger will make better business sense?

Previously, the possibility of a Grab-gojek merger raised apprehension of a potential decline in competition in the ride-sharing and food delivery scene in Southeast Asia, areas where both brands have emerged as market leaders.

On the other hand, a gojek-Tokopedia union would likely proceed more amicably with less backlash from the masses as the anti-competitive effects in any one vertical would be less profound. Furthermore, there is a lower tendency for anti-competitive laws to be flouted in a gojek-Tokopedia merger in contrast to Grab-gojek, thus reducing the possibility of objections from authorities. 

Additionally, a join of hands between gojek and Tokopedia could raise red flags for Grab who is trying to establish its presence in Indonesia. Both Grab and Gojek have been investing heavily in their payments arm, shifting the focus of the business from ride-hailing to digital banking.

In December 2020, Gojek poured US160 million into Indonesian bank PT Bank Jago, signalling its intent to strengthen its financial services sector with GoPay at its forefront. Given that Indonesia comes in fourth for the largest unbanked population, it is no surprise that Grab is also eyeing a piece of the pie.

Yet, as merger talks fall through, Grab may have lost out on a golden opportunity to bolster its presence in Indonesia and more so, with a strengthened Gojek. 

Nonetheless, it is unlikely that Grab will sit back. A gojek-Tokopedia merger may spur an alliance between Grab-backed digital wallet OVO and Ant-backed Dana, as rumoured in June last year. This could signal a heated competition between gojek’s GoPay and a Grab-backed Ovo-Dana in an attempt to capture a greater share of the Indonesian e-wallet market, where digital payments are trending. However, Grab would need to take quick action to compete with gojek’s GoPay, who is already a preferred digital wallet amongst locals. 

Also Read: Ecosystem Roundup: Tokopedia, gojek on the verge of a US$18B merger; GoBear ceases ops

We should not forget that tech companies such as gojek, Tokopedia and Grab operate in digital markets where network effects are accentuated as opposed to conventional markets. It would be nearly impossible to overthrow market leaders in these fields, with high switching costs and information asymmetries that give the incumbent a competitive edge.

With the right leadership and a smooth collaboration between the two entities, the merged firm carries great potential to rise to the title of Indonesian internet powerhouse. If Grab fails to keep up, a strong defence from gojek-Tokopedia may deny Grab from successfully setting up a base in Indonesia.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page

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Everyone needs to take care of themselves on a daily basis, and Gresham has spent years perfecting the hacks necessary to do that.

We specifically discuss these three hacks, but also talk about much more:

– 365 Gratitude Journal

– Insight Timer

– I am Coloring

If you don’t see the Apple player above, click on a link below to listen directly!

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This article was first published on We Live To Build.

Image Credit: Michal Czyz on Unsplash

The post 3 great CEO hacks to improve your daily life with Gresham Harkless, Jr. appeared first on e27.

The year 2020 has been a year of momentous change for the payments industry not just in APAC but also across the world.

Trends that were identified this time last year as emerging have been hugely accelerated as a result of the pandemic. Rapid growth was predicted, but it was unpredictable on the scale that has happened.

For example, and most notably, we’ve seen cash use decline even further this year amidst revelations that handling cash could spread infection. As the pandemic spread across Asia in the first half of the year, people were quick to reduce contact with physical materials and others, and instead reaching for contactless options to carry out daily tasks.

For retail, this meant a shift toward buying goods and services online, and where necessary, paying in-store by card. In fact, many merchants simply refused cash in a bid to do their part to stop the spread of COVID-19.

In Singapore, this shift was accelerated by the government which encouraged the economy to digitalise quickly to remain competitive and to adapt to the ‘new normal’, even creating payout programmes to incentive local micro business to adopt digital payment forms.

According to McKinsey’s 2020 Global Payments Report, by the end of 2020, we can expect a drop of four to five percentage points in the share of global transactions made with cash, and much more in some regions.

So, after a year of such rapid transformation, what does the (un)predictable future hold for the payments industry in 2021?

Buy now pay later (BNPL) will be a popular payment method

According to Paysafe’s LiT research, 56 per cent of global consumers mentioned that they used a new local payment method in the first month of the pandemic. One of these new popular payment methods is ‘Buy Now Pay Later’ (BNPL).

BNPL schemes, popularised by larger companies like Afterpay and Klarna, were this year named as the fastest growing online payment method worldwide.

While relatively new to Singapore, local fintech like hoolah, Rely and Atome, are taking advantage of the trend and stealing market share from the traditional credit card services with their interest free offerings.

Predominantly an online payment option allowing consumers to pay in instalments for goods and services, some have even made their way in-store to capture audiences as they slowly return to preferred retail outlets offering on-the-spot credit for purchases and they’re proving popular.

Research from Kaleido predicts that BNPL value will reach over 12 per cent of total global e-commerce spend on physical goods by 2025. What’s more, Europe will be responsible for US$347 billion of e-commerce spend via BNPL mechanisms by 2025, representing 30 per cent of total e-commerce spend in that year.

Also read: 4 ways digital payments are helping businesses thrive amid a global recession

With the economy not expected to recover to pre-COVID-19 levels for some time, cautious consumer spending is a trend we see continuing into 2021. As such, this is certainly a payment method online merchants need to strongly consider offering consumers in 2021 and beyond.

Staying competitive will be harder

It’s no surprise that the figures from 2020 reflect a massive boom for global e-commerce. The ‘quickening’ effect, as coined by McKinsey, describes a 10-year shift in e-commerce experienced in just 90 days.

During the month of June 2020, amidst the height of the strictest lockdowns in many countries, e-commerce sales grew 34 per cent year-on-year — the highest growth rate reported since March 2008.

Interestingly, many consumers were not turning to their trusted brands during this critical period. Many shoppers branched out to new retailers with the ‘support local’ movement growing in popularity as people rallied to ensure the survival of local merchants who were forced to close physical outlets during the pandemic

Disruptions in brand loyalty have created a wealth of opportunities for businesses big and small, pushing them to take their operations online and across borders. Facebook even launched its own shopping feature to enable growing businesses to sell to customers on its owned platforms like Instagram and WhatsApp.

According to PPRO’s own research, one of the most-common reasons for cart abandonment at the checkout is that a customers’ preferred payment method was not available.

In fact, recent research has revealed that the global average rate of cart abandonment is as high as 75.6 per cent — causing brands to lose up to US$18 million a year in revenue. We expect this demand to continue, putting pressure on retailers to expand current payment offerings.

Seamless payments have to meet stricter security standards

As digital payments head toward a global tipping point, the need for greater regulation and security will only continue to grow.

Globally, two-factor authentication is growing in popularity. In 2019, Australia released the Card-Not-Present (CNP) Fraud Mitigation Framework, requiring Strong Customer Authentication (SCA) when a merchant’s fraud rate is above the recommended rate for two consecutive quarters. India requires two-factor authentication for all domestic debit and credit card transactions over INR 2,000.

As we head into 2021, payment providers and merchants worldwide must collaborate to ensure they’re prepared to adapt digital shops to these new requirements, while also ensuring the payments process they offer is seamless for the customer.

Also read: Lessons from the buy-now-pay-later boom

2021 will be the year for action — ensuring customers are adequately protected in an increasingly cyber world.

Payments should prepare for hyper growth

More and more customers are now online, some for the first time, and they’re looking for products or services that suit their very specific needs and they don’t really mind where they find them.

While the pandemic has meant countries are less physically connected than ever, in the online sphere, all borders have been eliminated: a shopper will look across borders (they might not even realise they’re doing it) in search of better-quality products, more payment options, preferred brands and more.

For merchants, this is a huge opportunity and one that could enable them to reach untapped markets if they are able to offer the right mix of goods, user experience (UX), local payment methods and delivery options.

With over 500 significant local payment methods across the globe, every consumer will have different payment preferences. To be able to scale up and succeed in the new normal, merchants must work with payment service providers to activate as many payment methods as possible at the checkout page.

While 2021 might be another challenging year for the global economy and people as they struggle through further restrictions and lockdowns the future for local payment methods (and savvy retailers who offer them) will certainly be very bright.

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The post 2021: Predicting another bumper (un)predictable year for payments appeared first on e27.