Retail in Asia

In Trends

Taking stock: New payment methods breaking down the boundary between online and offline commerce

Last month eBay’s online payment unit PayPal launched PayPal Here – the company’s latest online payment solution for merchants – in Hong Kong. With the new solution, traditional bricks and mortar stores today can receive payment from customers anytime, anywhere, through an online platform. Retail in Asia catches up with Kerry Wong, Managing Director of PayPal Hong Kong, Korea and Taiwan, to learn more about the PayPal Here solution. She also tells RIA about the latest Asian e-commerce trend and how the new payment methods have blurred the line between online and offline retailing.

RIA: What are some of the latest, interesting technologies in e-commerce and the way consumers can pay in Asia?

Kerry Wong (KW): The world of commerce is changing. Without a doubt, mobile is one of the fast-evolving areas of technology which is opening up many new payment channels for businesses and retailers across Asia, and revolutionising the way we shop. As mobile devices become the new driving force in e-commerce, PayPal processed more than 8,000 mobile payments on average per day in Hong Kong in 2011. Mobile devices are also transforming consumer behaviour. As more and more people use their smartphones to connect to the internet they’re using their mobile devices to do many more things, including online shopping. In Hong Kong, nearly 7 out of 10 people are embracing faster and more convenient mobile shopping as they regard it as an "anytime, anywhere" activity.

RIA: With new payment methods and high penetration of smartphones, people can now shop and pay anytime, anywhere. What changes among consumers and retailers will be driven by these new technologies?

KW: For retailers, the latest changes in the world of commerce really mean that they can create business opportunities anywhere – they never have to miss a sales opportunity. This will particularly benefit small entrepreneurs by opening up new payment channels to them. Previously, it was very challenging for small merchants to accept credit card payments. They had to deal with the challenging and time-consuming process of getting a merchant account from their bank, then go through the costly process of getting a credit card terminal installed at their Point Of Sale. With technologies like PayPal Here, all retailers need is a smartphone.

These new technologies offer a new level of convenience and enable small businesses to be a lot more agile. They can easily create new sales opportunities and increase revenue without worrying about maintaining a complex back-end system. Simplifying their payment channels means they have more time to think about growing their businesses and increasing customer loyalty. 

For consumers, these new technologies mean more ways to pay than ever before. Previously if you were shopping in an environment that only accepted cash – for example, in a market – you’d need to make sure you had enough cash with you to buy whatever you might want. If you didn’t have enough money, you couldn’t make any on-the-spot purchases. Increasingly, consumers will just need their mobile phone to be able to pay for many goods and services, no matter where they are. It’s a more convenient, secure and flexible way to shop.

RIA: For retailers, how will these technologies blur the line between online and offline?

KW: It’s true that the lines between on- and off-line commerce are becoming increasingly blurred, and this is primarily being driven by mobile. For example, today consumers can walk into a traditional bricks and mortar store, but they can pay using their mobile phone, simply by swiping a QR code, or by using location-based services. They might be visiting the store in person, but they’re accessing an online account via their mobile and using this to pay rather than using cash or even a credit card.

The "mobile wallet" is revolutionising retail and the way we pay. In addition, smartphone penetration continues to soar – Hong Kong is leading the way with 50-60 percent penetration meaning that over 3.5 million people in this region have a smartphone. Today, I might not worry too much if I leave my wallet at home in the morning, but I would never leave the house without my smartphone. As we increasingly use these devices to connect to the internet and access a variety of services, the way we shop online and offline will continue to evolve.

Excitingly, the mobile wallet revolution is just beginning in this region. It will take lots of experimentation and collaboration among industry leaders to find the right model before it reaches its tipping point. At PayPal, we’re working with various partners in banking institutions, telecom players, and government bodies to lead the way forward.

RIA: We’ve heard about the PayPal-Pacific Coffee app on iPhone – which could be a good example of how online payment is accepted in offline store. Can you tell us more about this case?

KW: Last year Pacific Coffee, the premier coffee chain in Hong Kong, launched an iPhone app that enables customers to use PayPal to buy and top-up its "Perfect Cup Card" to buy coffee. With just a simple scan of a QR code using the iPhone, coffee fans can now get their daily caffeine fix quickly and efficiently using PayPal for mobile payment.

The Pacific Coffee iPhone app is just one great examples of how we’re aiming to revolutionise the mobile shopping experience. Mobile will increasingly become a key channel for Asian merchants to reach buyers looking for the best deals on-the-go. Just last year, PayPal saw its mobile payment volume in Asia-Pacific grow by 7.6 times to nearly USD81 million with over 330,000 mobile users in 2010.

RIA: Have you received consumers’ feedback on this app so far? What are their responses to the application and the transaction process?

KW: Feedback so far has been incredibly positive. Hong Kong consumers are very discerning and, as always with a new solution, you have to be sure you’re making an everyday process easier, faster and more convenient – otherwise why would consumers choose to use it? We’re very focused on taking the pain out of payments for both the merchant and the consumer.

RIA: PayPal launched PayPal Here last month in Hong Kong and some other countries around the world. The app, with the card reader, allows retailers, especially small and medium-sized businesses (SMBs), to accept credit card or debit card payment. How can this solution help SMB on their businesses in store?  

KW: PayPal Here enables anyone with an iPhone or Android smartphone to accept credit and debit cards and PayPal payments on-the-go, and get paid instantly into their PayPal account. The fully encrypted, thumb-sized card reader simply clicks into the headphone jack of an iPhone, and then small businesses can use PayPal Here to accept card payments by swiping a card through the reader, manually keying in card details or scanning the card information using the phone’s camera. Merchants can also accept PayPal and track cash sales in their transaction history. They can even issue receipts to customers via email or SMS through the PayPal Here app.

A key benefit for SMBs or retailers is convenience. In the past, if merchants wanted to accept card payments in their store they needed to deal with the challenging and time-consuming process of getting a merchant account from their bank. Now, all merchants need is a smartphone and PayPal Here to start accepting card payments faster than ever before.

In addition, with PayPal Here there are no account setup costs or monthly fees. There’s just a transaction fee, from 3.9 percent + HKD2.35. The mobile app is free to download and the card reader is currently free too.

Many types of businesses stand to benefit from PayPal Here, but in particular small businesses and entrepreneurs who want to do sales on-the-go. We’ve seen merchants from a wide range of industries sign up already, from sectors such as retail, services, entertainment, education and insurance.

We have some great examples of how small businesses are already benefiting from the solution. Take Seven Shop, for example. This independent retailer specialises in custom-made vintage men shoes. With PayPal Here they can now accept card payments in their small store – or anywhere – extremely quickly. In addition to in-store payments, having this technology means that they can easily target customers when they’re on the road, exhibiting at fashion expos. It also helps to create up-sell opportunities, by opening up payment options to potential buyers. 

RIA: Apart from Hong Kong, where will PayPal Here be available in Asia?

KW: While we don’t disclose an exact timeline for roll-out, we want to be available in all APAC markets as we believe PayPal Here can revolutionise how small businesses and entrepreneurs grow their business by accepting credit/debit cards and PayPal payments on-the-go. We’re just at the tip of the iceberg: Australia and Hong Kong are the initial launch markets, but we have plans to add more Asian markets in the near future.


PayPal is the faster, safer way to pay and get paid online. The service allows people to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing. PayPal is an eBay company and is made up of three leading online payment services: the PayPal global payment service, the Payflow Gateway and Bill Me Later. PayPal’s active registered accounts hit 109.8 million in the first quarter, a 12 percent increase over the previous year. For more information about this company, visit PayPal.

Taking Stock is Retail in Asia’s fortnightly column dedicated to showcasing opinions from experts in the retail industry.