While the payments company remains a household name in the offline space, group CEO Lawrence Chan sees that dominance becoming less relevant amid an online boom.

 

The Business Times – The Strategy Room

Singapore, February 28, 2022 – In the fiercely competitive and disruptive payments ecosystem, the reality of the game always changes for industry players.

So what is the current, sobering reality for NETS?

For one, it's recognising that while its foothold in the offline space is unrivalled, there is a pressing need to beef up its digital presence as the lines between online and offline continue to blur.

But merely “defining what we're facing” is not good enough, its group chief executive officer (CEO) Lawrence Chan tells The Business Times.

“Our job as leaders doesn't stop there. After defining the reality, we have to give hope, then we have to communicate,” says the payments veteran with over 20 years of experience across PayPal, American Express and Visa prior to his latest stint at NETS in 2020.

“In a pandemic, communication, especially, becomes important in terms of driving our business on a day-to-day basis and making sure we know what we're doing, why we're doing it, and doing it with the right values.”

This mantra, says Chan, was ingrained in him by former AMEX chief and chairman Ken Chenault.

 

Staying relevant

Now, at the helm of NETS, Chan has been driving the group's transformation plans as digital payments continue to rise exponentially in Covid times.

NETS is a household name in the offline space. In its extensive network of more than 130,000 terminals, about half are operated by merchants that use NETS as their only payment option.

But the way Chan sees it, the group's offline dominance will become less relevant with time if the online payments pie remains uncaptured.

“A lot of transactions are now blurred between offline and online. The payment may be (made) online though the experience is offline,” he notes, citing transport services as an example.

“More of these will take place, whether it's in the transport space, F&B (food and beverage) space . . . and that's why going online, even to continue our dominance in the face-to-face space, is very important,” says Chan. “We need to be relevant online to continue to be relevant offline.”

The growing crop of e-wallet challengers adds to the urgency to retain market share.

As part of its online push, NETS is looking to scale one of its digital payment products, NETS Click, more aggressively in Singapore.

Through this service, consumers are able to use their NETS cards as an in-app payment method to pay merchants such as ComfortDelGro.

Previously, passengers who wish to pay via NETS would have to either swipe the physical card on the terminal, or use the NETS QR function.

“We believe (in-app card payment) is not unique. It's something that already exists. But we are providing access to a customer base who are very loyal to us offline today,” says Chan.

He observes that many NETS users are still largely cash-dependent. “By providing a (card-on-file function) on the app, we will enable more users to be more digital, more online.”

 

QR boom

Singaporeans are no stranger to QR codes, in part helped by the nationwide adoption of SafeEntry measures since the pandemic hit.

Smaller businesses are also choosing to go cashless to minimise contact, Chan observes.

“More merchants are taking QR as a form of payment, and more buyers are comfortable using QR to pay. Scanning a QR has increased significantly for us in the hawker and small merchants space by over 100 per cent since Covid-19 started,” he notes, adding that there have been “multiple increases” in transaction volumes.

Riding on this Covid-induced boom, NETS plans to roll out cross-border QR payment services as travel restrictions gradually ease.

This means working with Singapore-based merchants to accept QR payments from foreigners, as well as enabling Singaporeans to use the NETS QR function with merchants overseas.

Domestically, QR codes must be relevant before “anything cross-border can take place”, says Chan.

He is confident that Singapore has reached a tipping point where QR codes are now an essential mode of payment.

“We will look for countries where QR is also relevant for payment to do this cross-border (collaboration) so that there will be enough QR codes for consumers to scan,” he adds.

While he did not disclose specific countries, NETS is currently sitting at a sweet spot in the region.

QR codes have seen record adoption rates in Asia-Pacific amid the pandemic, far outpacing the West.

Of those in the region who used QR codes for payments, 63 per cent used them more frequently in 2020 than they had in the past, a 2021 survey by Mastercard showed.

In both Thailand and India, the number stands at 64 per cent, above the global average of 56 per cent.

The majority of respondents perceived new payment methods such as QR codes to be cleaner and more convenient for in-person payments, the survey found.

But in the relentless push for cashless adoption, Chan cautions that no one should be left behind. “It takes a while to really close out the last mile.”

Improving the user experience of new payment methods is key to driving adoption, he notes.

“It's not just about educating people to use what's already there, but continuously looking at ways to make it easier for both consumers and merchants to use digital payments,” he says.

 

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