Only half of consumers in the Asia-Pacific region are comfortable with buy now, pay later (BNPL) or online installment payment schemes despite the increasing awareness for this option that offers low interest rates, according to a study by global financial services company Mastercard.
In the study titled “Mastercard New Payments Index 2022,” majority or 83 percent of the consumers claimed to have knowledge about BNPL plans.
Majority or 67 percent of the consumers said they would “feel safer using a BNPL solution backed by a major payment network than from other providers.”
About 65 percent said they would be “more interested” if the BNPL solution was already available in their current bank, rather than tapping other financial institutions.
Digital tools
Some 63 percent of the respondents expressed openness in connecting their bank account to other financial services to enable automatic repayments for BNPL schemes.
“Consumers look to installment plans because of low interest and the ability to store up savings,” Mastercard pointed out.
Meanwhile, the study noted that 81 percent of the consumers were using digital tools for at least one financial task. Such includes paying bills, banking, money transfer, automated savings, bank account opening and tax filings.
Users turn to financial technology tools to enable faster transactions, make tracking and managing of bill payments more convenient and organize finances in one portal, among others, the research found.
The most popular forms of digital payments are account-to-account transfers, digital wallets and QR (quick response) codes. Around 69 percent said they had “increased their usage of at least one digital payment method in the past year.”
Addressing security risks
“Consumers are embracing digital finance, though opportunity still exists to strengthen perceptions around security, clarify use cases and demonstrate trustworthiness,” Mastercard said.
With this, the Mastercard study noted that customers “recognize the potential for biometrics to offer both security and convenience when making payments.”
Most of the biometric data used by the respondents are fingerprint-based (72 percent), followed by facial recognition (68 percent) and voice recognition (69 percent).
Seven in 10 respondents agreed that biometric identification was easier than remembering passwords while 69 percent claimed it was more secured as well.
“As anticipated use trends with comfort, trusted sources like global payment networks and issuers can play an important role in adoption through education and provision of validated solutions that address key consumer needs,” Mastercard added. INQ