Here’s a little-known fact: The ubiquitous QR code that we use today was actually invented in 1994 in Japan. Yet, according to Ory Rusli, head of South-east Asia, Japan Foodie – a restaurant search app for visitors to Japan – when it came to introducing this mode of payment to Japanese merchants in the 2010s, they didn’t quite warm to it.
Approximately eight million Chinese visitors visit Japan yearly, said Rusli. And most, if not all of them, rely on mobile wallets such as WeChat Pay and AliPay to make purchases back at home.
“We realised that they were carrying their payment apps outside of China and they could not use them here [in Japan],” said Rusli, at a panel about digital payments and loyalty services at this year’s WIT Innovation Stage.
The panel was moderated by Yeoh Siew Hoon, founder, WIT, and included:
- Candice Ong, Chief Commercial Officer of Singapore-based cashback reward app ShopBack;
- Dylan Tan, CEO of Singapore-based travel payments platform Split (WiT Startup Of The Year 2018);
- Terry McMullen, CEO of Australia-based rewards app OpenSparkz
In order for Japanese merchants to attract more international visitors, they need to be able to accept e-payment methods that travellers are accustomed to using at home, said Rusli. When Japan Foodie launched its own e-payments platform TakeMe Pay, only 100 merchants agreed to use its service; but by the third year, the figure skyrocketed to 4,000. And just last week, 45,000 merchants in Japan integrated TakeMe Pay — a huge milestone for the company.
This is just one of many ways fintech solutions are helping to improve the customer experience for travellers. For McMullen, the idea for OpenSparkz came while he was still working at Pinpoint, an Australian rewards and loyalty company that was acquired by MasterCard in 2014.
The one problem that was difficult to solve, he said, was that “many [customer loyalty] programmes rely on several promotion cards or coupons, which creates unnecessary friction for the consumer and merchant.” The OpenSparkz service removes this barrier by consolidating multiple rewards and loyalty programmes into a single platform.
“Turning [customer loyalty programmes from] a two-step process into a one-step process is kind of our mid-term goal,” said McMullen. “The longer-term is about how to juggle these multiple [brand relationships], making them seamless but not necessarily making them into one. For a consumer who wants to be part of multiple brands, how do we make it as easy for them as possible?”
But both McMullen and Ong said that their services were not meant to replace existing loyalty programmes but rather make them more hassle-free to use.
“I think all of us want to participate in multiple loyalty programmes … we always want more value with our transactions,” said Ong. “We don’t take transactions on our platform [ShopBack] but we try to facilitate greater value in the different options out there. We don’t want to substitute but enhance the USP for different loyalty programmes in the market,” said Ong.
“We are not commoditising loyalty, but rather we are making it more seamless. We will continue to co-exist with loyalty programmes,” said McMullen.
For Tan, however, the USP of his startup, which allows customers to pay for travel bookings in installments, is different than that of the other panellists – and it is a harder story to sell to businesses. Yeoh said that some businesses could potentially see Split’s business as a mere feature that could be easily replicated by other OTAs.
“When we were validating this idea, we told the airlines and travel agents, this is a value add to your travellers and could increase your conversion rate – so why don’t you do it yourself?” said Dylan.
“The most common answer I got was that the unit economics didn’t make sense We assume that eight to 10 per cent people opt to pay in installments. The OTA will need to invest in a huge fund to fund these tickets, and they need to invest in a credit risk team, which involves data scientists, and a recovery team to supplement their customer service teams. All these investments don’t make sense if it’s only a small consumer base,” he said.
But a third party like Split can add value by taking on the financial risk up front, managing it for OTAs, airlines and hotels. Dylan said that the delinquency rates (customers who are late on payments) to date have been low. The company is able to filter out a significant number of people using its tech.
All in all, fintech payments and loyalty programmes need to converge to deliver better value to customers in a seamless way. The technology is already available; all that is needed is a combination of initiative and capital to build the ecosystem in a collaborative fashion, involving all stakeholders in the industry.
