More and more businesses today are offering cashless payments as an option for customers, utilising discounts as an effective way of attracting first-time e-wallet customers.
However, as more people and businesses adopt cashless payments, discounts become a secondary motivation. A recent survey by Ipsos Indonesia shows that many e-wallet users will continue to use the service even without discounts or cashback.
Said survey revealed that approximately 71 percent of first-time e-wallet users were motivated by promotions which are often provided by ride-hailing and food delivery services.
However, Ipsos Customer Experience Research Director, Olivia Samosir, explained that 68 percent of respondents said that convenience was the main driving factor for repeated use by consumers. Promotions were the second highest motivating factor by a large margin at 23 percent.
“Our respondents said cashless payments were simpler as they didn’t have to worry about change or withdrawing money from ATMs,” she said during an event for the release of a report titled The evolution of the digital wallet: driving the next wave of growth.
Olivia also stated that customers also valued the safety provided by e-wallets, as e-wallets recorded transactions and the account could be easily blocked if users lost their phones.
Feedback from customers also stated that the more they used cashless payments, the more it became a part of their lifestyle. Thus, promotions and discounts began to affect their decision making less.
Digital payments, which include cashless transactions by credit or debit card, account-to-account transfers and e-wallets, have reached an inflection point in Southeast Asia. They are expected to account for US$600 billion in gross transaction value (GTV) this year, according to the e-Conomy SEA 2019 report by Google, Temasek and Bain & Company.
The compound annual growth rate (CAGR) of digital payments in Southeast Asia is expected to be 10 percent and the sector is expected to reach $1.1 trillion in value by 2025, according to the study. Accounting for just over $22 billion in 2019, e-wallets are likely to grow more than fivefold and to exceed $114 billion by 2025, the study finds.
The research by Ipsos also revealed that Gen Y (millennial) user wanted their payment applications to be connected to their savings accounts, while most Gen Z users wanted more payment instalment options.
Indonesia Stock Exchange Business Development Advisor Poltak Hotradero said the future of e-wallets in retaining more customers was to provide digital financial services.
“The e-payment ecosystem should be closer to everyday needs such as savings, insurance and investment,” he said, adding that banks should start collaborating with e-wallets or they may risk losing “a generation’s worth” of business.