The Battle for Cashless Travellers in Asia

Check-in Asia’s Gary Bowerman joined Alex Hadwick, Head of Research at Eye for Travel, for a short podcast discussing the battle for cashless travellers in Asia.

The quest for cashless travel in Asia is just beginning, but huge strides have been made. The catalyst, of course, is China where digital payments are entrenched in the daily lives of consumers.

As a result, Chinese travellers expect to be able to pay for products and services via their smartphones while overseas. The growth of Chinese outbound travel is influencing payment trends in South East Asia, where more airports, boutiques, hotels, taxis and restaurants now accept AliPay and WeChatPay.

This 10-minute podcast explains why the battle for cashless travellers in Asia matters to airlines, hotels, retailers and travel service providers. Here are 5 key points from the podcast:

1) Major Tech Players

In China, digital payments are dominated by two tech conglomerates, Alibaba (AliPay) and Tencent (WeChatPay). The two systems emanated from different, yet equally consumer-focused models: e-commerce (AliPay) and social media (WeChatPay).

Both companies have extended their online scope through an array of services, including gaming, news, retail, video streaming, advertising and travel. This enables WeChatPay and AliPay to tap vast consumer networks encompassing almost every aspect of urban living.

2) E-Payment Space Race

Across Asia, and increasingly worldwide, a “space race” is ongoing on between AliPay and WeChatPay. Both are teaming up with licensed consumer finance companies to reach more payment terminals in as many countries as possible. To date, AliPay has been the fastest mover in terms of merchants and retailers, but WeChatPay is catching up.

3) Cashless App Proliferation

Payment trends in China are being embraced across South East Asia. Demand is influenced by the rollout of e-commerce services, in which Alibaba is the dominant regional player.

We are also seeing a proliferation of homegrown ASEAN payment apps. Some are launched by tech start-ups, some are linked to banks and others are offered by consumer brands. All are seeking to gain scale, secure access to transactional data and develop interactive relationships with consumers via smartphone-based payment apps.

4) Big Data & Travel Marketing

Digital wallets are mass market tools in China, and are heading the same way – albeit at a milder pace – in South East Asia. This gives AliPay and WeChatPay a scale of consumer penetration and influence that is beyond most companies in the west. Their ability to reach and identify customers, and their utilisation of data is highly advanced.

Meanwhile, the embrace of smartphone payments means Chinese tourists leave a a large data footprint throughout the travel journey. Therefore, the contextual marketing potential of these payment apps will likely become as important as the actual cash through the tills.

5) The Next Big Movers

E-payments are poised to graduate from disruption to mainstream in Asian travel. Some major digital wallet launches are expected, and two high-profile South East Asian companies have already stated their intentions.

Malaysia-based low-cost carrier AirAsia, whose route network spans South East Asia, China, Japan, Australia and India, and ride-sharing firm Grab, which recently saw off the challenge of Uber in South East Asia, both view blockchain and fintech as vital components for transforming themselves into integrated consumer businesses capable of competing as global players.

Watch this space as the battle for cashless travellers in Asia heats up!

 

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