The payment industry is set to see significant alteration in its value chain with the introduction of online payment. The online payment market which has grown in importance in recent years as a result of boom in the e-commerce market has resulted in the shift of customers from paper based payment mediums to online payment mediums. The consumer preferences are shifting towards transparency and flexibility as they are looking for better, more proactive solutions around life events.
Indian payment industry has witnessed sea change since the introduction of online payment as more and more consumers are shifting from traditional method of making payment i.e. paper based to the new payment methods like online bill payment and card based payment methods. The most preferred payment instrument for online payment in India is credit cards.
Chinese online payment industry has characteristics which are different compared to Indian online payment industry as its most preferred online payment instrument is remittance (debit transfer), collection (credit transfer) and collection with acceptance (debit transfer) market. Also its third party platform is highly competitive with 40 companies operating in it with razor thin margins and most of them are offering homogenous services.
Malaysian online payment industry is more advanced compared to India and China as its market has more advanced instruments like e-money which are not present in India and China at the moment. Also, it has higher internet penetration rate compared to India and China. Its most preferred online payment instrument is credit cards with internet banking being second most preferred medium of online payment.
The shift in the payment method in India, China and Malaysia is the result of increase in e-commerce activities, change in consumer preferences and increase in internet penetration as more and more population becomes tech savvy. Also, there are certain advantages of the online payment method over the traditional methods like low cost, time saving and ease of usage which have contributed towards this payment method shift.