Innovating in the age of the empowered consumer
MEET THE THROWBACK GENERATION
JUSTPAY – INNOVATING FOR A TRULY DIGITAL GENERATION
If millenials were tech geeks, Gen Z’ers are truly digital natives that have never known a world without connectivity. They have grown up with laptops, smartphones, wi-fi, gaming devices and MP3 players being a part of their lives, and the hashtag a new form of communication. As the Gen Z cohort come of age, they are beginning to shape tastes and disrupt industries, influencing economic decisions within families and communities.
Meet the throwback generation
The future of the global economy, for Gen Z’ers smartphones aren’t revolutionary. Instead, a future driven by artificial intelligence, wearable technology and networked gadgetry will be their new inspiration. According to a recent survey across 12 markets in Asia, conducted by Rakuten Insight, Gen Z’ers are changing the retail landscape significantly. While over 75% are influencing the need to think mobile payments, an impressive 40% are already driving the mobile purchasing space, challenging retailers to change their business models.
With Gen Z’ers likely to represent 40% of all consumers by 2020, what impact will it have on Sri Lanka’s retail space?
How will we address this new generation effectively? Echelon magazine discusses the challenges and demands of a truly digital generation with Channa de Silva, General Manager and Chief Executive of LankaClear.
Moving over the millenials, Gen Z’ers are here influencing and driving a digital economy globally. How will this change Sri Lanka’s retail space?
Sri Lanka has seen a trickle down of a dig- ital economy in recent years. But now it is more exciting than ever. Tech is driving how we do business. For example, concepts like Uber and PickMe have begun to dominate the market. This is exactly what Gen Z has been waiting to experience. Unlike in the past, you no longer need to go physically to a food outlet to grab some dinner after work; instead, you now order online and have the food delivered via a delivery service such as Uber Eats, Quickee or PickMe Food by the time you get home. It cuts down the time you have to wait in queues and the hassle of having to deviate from your route back home, provided you reach them early enough to place the order. The introduction of our latest payment innovation, ‘JustPay’ as a single click payment mode has become a major facilitator for such retail businesses in Sri Lanka. This payment mode intends to
Consumers want convenience and have been used to credit and debit cards. How has Just Pay changed their purchasing habits and has there been growing interest in it?
We have seen significant growth since January last year, when the first smart- phone-based app UPay went live with the payment mode JustPay. Since then, a number of other players have joined the space. Many innovative apps have gone live on JustPay, such as DirectPay, OrelPay, Dialog Genie, Sampath PayApp and Solo in partnership with HNB. Dialog eZ Cash, Mobitel mCash and FriMi are also using the JustPay payment mode to top up their payment wallets. There are many new apps that are on the verge of going live with JustPay, adding to the already impressive line-up. Customers of Bank of Ceylon, Commercial Bank, Sampath Bank, People’s Bank, Cargills Bank, NTB, HNB, NSB, PABC, LOFC and Commercial Leasing & Finance are already using these apps that are currently live. In the last year, JustPay’s transaction volumes grew by almost 50% month-on-month, while customer registrations saw 20% growth month-on-month during the same period. This reveals the massive potential for this
IN THE LAST YEAR, JUSTPAY’S TRANSACTION VOLUMES GREW BY ALMOST 50% MONTH-ON-MONTH, WHILE CUSTOMER REGISTRATIONS SAW 20% GROWTH
payment mode in the market. JustPay has now become the de facto avenue for local FinTech companies to enter the financial services market and we see a great uptake by Gen Z customers due to its inherent convenience.
What about peer-to-peer payments? Is JustPay an enabler?
We’ve seen apps such as Venmo and Zelle dominating the global peer-to-peer payment market with Gen Z’ers at the forefront driving the adoption of these payment apps. However, in a local con- text, a fund transfer still requires a customer to provide a considerable amount of details about the intended receiver of the payment including their bank name, branch code and account number. For Gen Z’ers this is a drawback, they don’t want a complicated transaction model, so they shy away from it. For them, convenience and time are important. Therefore, we have to make their life easier by making things simpler and absolutely convenient.
To address this, we have implemented a centralised system that simplifies the payment process, where the account hold- er’s bank would be responsible to issue a “nickname”, named appropriately as Payment Exchange Name (PEN), to each of their authorised bank accounts. In this system, a customer merely needs to know the payment receiver’s mobile number and the PEN of the bank account to transfer the funds via his smart mobile device. We feel that PEN is going to absolutely revolutionize the currently almost negli- gible peer-to-peer payments ecosystem in Sri Lanka.
Does friction hinder adoption? What are your thoughts?
Gen Z’ers expect their daily financial trans- actions to be frictionless, that’s a given. They will also look for financial service providers who can fit into their digital lifestyles, and think far less in terms of the bank or the financial company down the street. The current frictions they experience at customer touch-points when making payments has caused a drawback for many, so they prefer to use cash instead of electronic payments. With the introduction of Near Field Communication (NFC) based tap-and-go payment option, banks and the financial sector are trying to reduce the checkout time by several seconds. Since, a person has to wait many minutes in the queue before getting to the cashier to make a payment, reducing a few seconds off making the payment does not solve the problem for Gen Z, if the larger problem of having to wait in queues remains unresolved.
DIGITAL INNOVATION IS THE GEN Z WAY OF LIFE, AND REIMAGINING THE PAYMENT LANDSCAPE IS OUR NEW REALITY!
How cost effective is it for the merchant and does this cost get passed on to the consumer?
To enable a card payment, a merchant needs to have a POS device. For a small- time merchant, it can be cost prohibitive to obtain and operate a POS device. This is when friction arises. In a move to solve this, we are in the process of implementing the Lanka QR code standard of the Central Bank at the merchant’s end. Then a mer- chant will only need to have a Lanka QR code sticker pasted at his shop to accept an electronic payment and a low-cost mobile device (feature phone) to receive an SMS that will notify the receipt of payment. If it’s a very small merchant he will only have a personal bank account, so in such case the consumer can simply make a peer- to-peer payment using the merchant’s PEN. The consumer only needs to scan the small-time merchant’s PEN to make a payment. This is as easy as it can get. With JustPay, even a king coconut seller can join the system. All he needs is a simple PEN and a feature phone.
This is the future that Gen Z’ers are craving. When we make payments so seamless, we anticipate that Gen Z will opt to pay a small-scale grocery shop, cor- ner laundry outlet or even a small hopper shop via a smartphone in the near future. Digital Innovation is the Gen Z way of life, and reimagining the payment landscape is our new reality!
Prof Jayadeva Uyangoda