AS DIGITALISATION becomes more prevalent, Ant Group is seeing opportunities in the area of digital payments for small and medium-sized enterprises (SMEs) in South-east Asia as they seek to go global.

“The digital transformation in South-east Asia is opening (up) a range of opportunities for its citizens, especially for younger generations,” said Angel Zhao, president of Ant’s International business group.

The Chinese tech giant noted that more businesses – especially SMEs – are going digital and such platforms have also allowed these players to tap international markets.

This could open the door to sizeable opportunities for such businesses in the region.

A 2021 report by Euromonitor International found that Asia-Pacific’s e-commerce sales could nearly double to US$2 trillion by 2025. In a separate report published in December 2021, Deloitte also found that small businesses account for more than 85 per cent of cross border e-commerce in the region, amid increasing accessibility of digital platforms.

“Digital payments are the key to driving the digitalisation of business activities, as the last mile of a consumer purchase journey,” Zhao said, adding that fintech innovation could address the specific needs of SMEs.

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There are, however, challenges arising from the fragmentation of payment systems globally.

Ant noted that uneven regional development and technical capabilities of participants have led to a lack of interoperability between existing digital payment solutions and differences in efficiency, availability and compatibility in terms of technical standards and protocols.

These vulnerabilities hinder the cross-border operation of digital payment systems, negatively impacting the development of the digital economy and stifling potential innovations and competition,” Zhao said.

The company believes its Alipay+ solution could solve some of these challenges, by enabling the cross-border use of mobile payments and connecting users to businesses around the world.

The suite of cross-border mobile payment and digital marketing solutions was launched in end-2020, and allows SMEs to accept payments via localised e-wallets from other Asian countries.

These e-wallets include Malaysia’s Touch ’n Go, South Korea’s KakaoPay, the Philippines’ GCash and Hong Kong’s AlipayHK.

Today, Alipay+ has 14 mobile payment partners in Asia and one in Europe. The solution is used in over 360,000 physical restaurants and eateries around the world, which include merchants located in well-connected airports such as Changi Airport and Incheon International Airport.

Ant sees potential for SMEs to take a step further in the way they reach out to consumers. The group believes businesses can capture more revenue opportunities through digital marketing, by engaging digital wallet users from the very beginning of the customer journey – what it calls the “brand discovery” stage.

“For example, if you are buying a cup of coffee at a coffee shop, you only decide how to pay for it at the cashier. For online, people often only decide which payment methods to choose at the checkout page,” said Zhao.

She added: “We believe digital payments could change the traditional role of payments and expand to the ‘awareness phase’ of the purchase journey, and really evolve into an effective channel to better connect merchants and consumers.”

The group developed Alipay+ to go beyond payments, Zhao noted. It created digital marketing tool Alipay+ Rewards to allow e-wallet users to redeem or purchase vouchers from merchants.

With mobile wallets emerging as a dominant payment method both online and offline, the frequent “sticky” user behaviour makes e-wallets a “valuable and effective” channel for digital marketing, in turn driving online to offline conversions, she said.

Zhao cited the example of how a restaurant in Singapore could partner Alipay+ to distribute dining vouchers or promotional offers in Malaysia’s Touch ‘n Go e-wallet.

Incoming visitors – who are also Touch ‘n Go users – from Malaysia could then save the vouchers prematurely before their arrival in Singapore, and make plans to dine at the restaurant.

Ant aims to go beyond Alipay+ to build an ecosystem of digitalisation services to meet the needs of all SMEs.

The group launched Anext digital bank in Singapore in June to focus on serving regional micro, small-and-medium enterprises, especially those with cross-border operations.

To date, about 65 per cent of new customers that have signed up for its Anext Business Account – a dual-currency deposit account with features such as remote onboarding and daily interest – are micro enterprises, with the rest comprising small businesses, Zhao said.

“Access to finance is a key constraint to SME growth.

“That is why financial inclusion for the backbone of our economy, which employs the majority of the world’s population, is the first step towards broader inclusive growth and economic development.”

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