Mobile and cashless payments are the next stage of growth for cashlite companies looking to tap into a larger consumer database, while reducing the hidden cost of handling physical tender, according to Fave Group Pte Ltd.
The mobile reward and payment platform currently facilitates over US$100 million (RM403 million) in online transactions via FavePay, boasting close to 15,000 merchants and 600,000 transactions a month across Singapore, Malaysia and Indonesia.
Fave founder Joel Neoh Eu-Jin (picture) said acceptance among previously offline businesses has been strong due to the recognition of cash as being an “inefficient” form of payment both in terms of marketing reach and hidden costs.
“For a majority of these companies, a problem they face is how to grow their businesses without having the access to data that bigger companies have,” Neoh told The Malaysian Reserve in an interview yesterday, adding that Fave bridges this gap by connecting mobile payments to marketing.
“These businesses want to reward customers for coming back, but don’t know how to do it well — and physical promotions such as stamp cards and vouchers tend to get lost,” he added.
Via a mobile payment platform, he said companies now have access to a database of consumer trends and behaviour, while simultaneously having a marketing platform to reach out to customers.
“For every dollar saving offered to the consumer, a company can track and reach out to that customer — card and cash payments do not have this advantage.”
He added that there are a lot of hidden costs in handling cash offline, including security risks, staff costs and money lost upon exchanging hands.
While over US$30 billion in mobile payments are projected in South-East Asia by 2021, adoption among retail and food and beverage (F&B) players remains low.
Neoh said 95% of payments in the retail and F&B segments in Malaysia are conducted offline, while less than 5% is done via e-commerce platforms.