The annual Asia-Pacific Visa Security Summit was organised online for the first time. How would you evaluate the outcomes of the summit?
|Pavan Muttireddy, director of Southeast Asia Risk Services at Visa |
The summit is Visa’s largest event in the region and we have hosted it in various cities for 16 editions. Even though we had to move the summit online this year, we were able to welcome more than 1,500 partners and clients, which is double the number that we would have hosted normally. This serves as a signal to us that the industry believes that collaboration and shared learnings are more important now than ever.
Commerce is at a pivotal moment and we have seen an acceleration of all forms of digital commerce, whether it is using digital payments at the point of sale or being comfortable with buying online. At the summit, we also discussed a wide range of disruptions caused by the pandemic and these include changing consumer behaviours, the future of money movement, and how security must be a fundamental consideration for all innovative new ways to pay.
What key trends do you think will shape the global payments landscape in Asia-Pacific in the coming year?
Our Visa Consumer Payment Attitudes study identified three prevalent trends in consumer priorities.
First off, contactless payments have emerged as a health and safety priority among consumers, businesses and payment services providers. The pandemic has not only disrupted leisure spending with consumers giving up travel, fine-dining and luxury items but has also pushed consumers away from the use of cash and towards more modern payment alternatives that help them avoid personal contact and potential exposure.
Our study also showed 56 per cent of consumers carrying less cash in their wallets and conducting fewer cash transactions. Indeed, one in two Visa face-to-face payments in the Asia-Pacific are now contactless which demonstrates the growing preference for contactless payments over cash.
The very same sentiments have also elevated demand for e-commerce and expectations for speedy and quality service. Among active advocates of e-commerce, 85 per cent of them are purchasing on their applications once a week or more often and are discovering the convenience and potential savings on offer in e-commerce.
However, the substantial gain in consumer spending has also highlighted gaps in the payments ecosystem that require urgent attention. As consumption moves online, so have fraudsters, resulting in rising e-commerce fraud, elevating security concerns among all stakeholders.
According to our study, up to 51 per cent of Vietnamese consumers worry about their phones being infiltrated with malwares and viruses, and 41 per cent are concerned about information exposure when third parties gain unauthorised access to their devices. These are barriers to even greater adoption of digital payments that have to be addressed by innovations that are built around security.
How will these trends come into play in the Vietnamese context?
In Vietnam, like in many other countries, the pandemic has greatly accelerated changes in consumer behaviour, commerce and hence digital payments. According to our Visa Consumer Payment Attitudes study, QR code payments, mobile contactless payments, and online wallet payments are the categories that experienced the highest increase in usage. We believe that heightened levels of consumer interest in digital payments will remain even after the pandemic, as most respondents lauded the security and convenience aspects of new payment methods.
There is generally high awareness of the most popular contactless payment methods in Vietnam. There is a very diverse landscape for both QR payments and e-wallets with both domestic and foreign entrants offering consumers choices in the market. Vietnamese consumers are also relatively quick to adopt new technology and are open to trying solutions offered by small-scale, home-grown service providers in the QR code payment and e-wallet segments.
Consumers who already use contactless payments say it is safer and more convenient than carrying cash. Although 86 per cent believe it is safe when it comes to paying via smartphone, Visa believes more work needs to be done with the industry to earn consumers’ trust.
How is Visa addressing these rising security concerns and the changing security landscape?
As retail moves increasingly onto digital platforms, consumer expectations for safer and more convenient shopping experiences are elevated. In particular, they expect service providers to protect their transactions as well as personal and financial details.
One of the solutions Visa has introduced to reinforce security is Visa Token Service (VTS), which turns payment information like card numbers and other account details into randomised tokens. Even if the token is stolen, it does not contain any actual card information, rendering it useless to fraudsters.
This past year, VTS has been growing at a tremendous pace as more issuers and merchants invest in security. It had taken Visa more than five years to issue 1.4 billion tokens worldwide, but now we have crossed the two billion mark in just 10 months. VTS is now one of the largest payments security platforms in the market, safeguarding clients’ data while empowering consumers and vendors with card-on-file capabilities that make shopping a breeze on e-commerce platforms so consumers don’t need to fill a form every time they make a payment.
Another security feature that improves convenience for card users is Visa Secure, which uses the latest EMV® 3-D Secure technology for e-commerce purchases. It adds another layer of defence so financial institutions and sellers can be confident that the transactions are genuine. This security feature can reduce merchant risks from lost sales and offers to boost the shopping experience for customers.
At Visa, we are recommending that organisations emphasise significantly on promoting the culture of cybersecurity and have a robust governance framework in place with a mandate to protect it from data compromises.