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Moving Towards a Cashless Payment Environment


As technology continues to innovate the world, the payment industry is seeing changes as well. Cashless payment methods are now becoming the preferred method of payment used by a growing number of individuals around the world. The Asia Pacific region is rapidly adapting to these changes, with governments coming up with different regulations on how cashless payments can be made.

Cashless or electronic payment methods include online transactions, credit cards and mobile payments. In the Asia Pacific region, mobile payments are becoming the more preferred method of transaction. But the region as a whole may be still far off when compared to China. China currently has the most users in the world that are using cashless payment methods for transactions.

Speaking to journalists at the Visa Security Summit in Shanghai, China, Chris Clark, Visa’s Regional President (Asia Pacific), said electronic payment penetration is high in the region but has a different form factor depending on the country. In Australia, he said that 95% of users use NFC cardless payments instead of mobile app payments. The consumers there prefer fast and friction-free payment.

“The question is, will the future of payment be mobile payment or NFC, on card or biometric? The most popular form of payment will be one that is globally interactable, a standard that is able for everyone to use. Governments speed up transaction focusing on trust and reducing criminal activity, ensuring the security and integrity of the payment system.”

Looking at the Asia Pacific’s goals for the future of payments, Singapore wants to be cheque free by 2020, while Malaysia targets 200 e-payment transactions per person by 2020. Thailand is looking to implement QR codes while Indonesia is looking to having up to US$ 130 billion in e-commerce transactions by 2020. The Philippines wants to move transactions from 10% cash to 20% electronic by 2021, and Vietnam aims to reduce cash usage by 10% by 2021. Over at Hong Kong, virtual bank licences via fintech is happening, and Taiwan aims for 50% of e-payments by 2021. Japan, which hosts the Olympics in 2020, currently has 20% usage in e-payments and is looking to increase it to 40% by 2024.

Securing Cashless Payments

With that said, the next focus in a cashless payment environment will be on how secure it is.

In a media briefing at the summit, Joe Cunningham, Visa Asia Pacific Head of Risk, said that collaboration is key in ensuring security. The fraud ratio has consistently declined since the 1950s. This was due to the collaborations between various stakeholders, which ensured security is not compromised.

According to Joe, the EMV chip that came about in 1997 took care of counterfeit and set the standards for payment security at that time. In 2009, PIC Data Security Standard set the current standards most payments use. With advanced authorisation, which is Visa’s implementation of AI, machine learning is used to make real-time assessments of every Visa transaction, which was about 187 billion transactions in 2018. AI advanced authorisation saves the industry US$ 25 billion each year.

“Data causes problems, but it’s also the answer to the problems. The more data that flows in, the better predictions for our AI advanced authorisation. It is able to learn from these patterns, feeding itself with the information.”

He added, as commerce is shifting to digital, so are criminals. A total of 76% of e-commerce merchants faced attacks in 2017 compared to 27% in 2015. Looking at payment security trends, Joe said the in-person payment fraud would continue to decline while the growth in e-commerce will drive the need for secure digital payments. Eventually, this will lead to increased adoption of biometrics, which he said will cost lower with the standards eventually.


Joe also pointed out that tokenisation is one of the most effective ways to devalue sensitive data, often preyed upon by cybercriminals. For example, replacing information such as the 16-digit credit card numbers with symbols, codes or other numbers will devalue the sensitive data.

“Visa wants to eliminate the 16-digit numbers stored everywhere and replace them with data that isn’t useful to a thief. If they steal this data, it won’t have any value. If our security roadmaps are adopted, with the right strategy, we can continue to reduce payment fraud.”

According to Joe, the large companies are already using tokenisation in their electronic payments. This includes the pays like ApplePay, SamsungPay, GooglePay and such. On the other hand, large merchants want to store credentials and use them to provide a seamless experience. For example, Netflix wants to keep credentials and just use it every month to bill consumers.

Joe pointed out that Visa does not want merchants to keep this data as it is not safe if their systems are compromised. Hence, it is better to replace big stores of sensitive data with tokens. Tokens protect transactions. If someone steals and uses it for something else, it won’t work.

“In Southeast Asia, more markets are increasing the adoption of tokens. It takes time, but it will happen eventually. Tokenisation makes it extraordinarily difficult for fraud to occur.”