APAC firms eye bigger investments in Digital Payment solutions

By Gloria Methri

A significant 61% of businesses in the Asia Pacific are actively investing or are open to investing in commercial payment solutions, a Payment State of the Union report by Discover® Global Network shows.

Despite this interest in digital solutions, traditional payment methods like credit cards (61%), ACH/EFT/Wire/Direct debit (54%), and cash (47%) remain prevalent for business expenses. However, over the next year, businesses plan to increase the use of digital payments for employee travel (50%), compensation (46%), and supplier payments (45%).

“While commercial payments are increasingly adopting digital solutions, the transition is not progressing at the same pace as seen in consumer payments due to the complexities of expense management,” said Chris Winter, Head of International Markets (APAC) at Discover Global Network. “As technology continues to advance across the industry and region, it is important that businesses seek to improve the security of their commercial payments programs to defend against fraudulent activity of all kinds.”

As payment approaches are modernised, APAC businesses are prioritising expense management, robust security and fraud features:

• The most important commercial payment initiatives for APAC businesses are expense management tools (47%), providing a greater variety of payment options to business providers (39%), and streamlining account receivable processes (39%).
• The most essential features within commercial payment solutions are business travel expense management (92%), robust security features (91%), and fraud prevention services (90%).

Digital Transformation of commercial payments is ongoing, but challenges remain:

• Lack of visibility across expense types (35%), difficulties tracking/managing expenses (34%), and waiting on outstanding receivables to make payments (33%) are the greatest pain points for APAC businesses when making payments and managing expenses.
• The most challenging aspects of managing employee travel expenses are travel expenses not aligning with in-trip costs (38%), timely reimbursement for employees (38%), and the inability to track, manage, and forecast employee travel (34%).
• Integrating data from a variety of sources (47%), spending too much time on data cleaning/formatting (47%) and integrating relevant business systems (44%) are the most challenging aspects of managing commercial payments data.

Expense management and business travel are some of the top priorities for APAC businesses; however, these areas present significant challenges.

Virtual Card Numbers (VCN) are poised for substantial growth

• 53% of APAC businesses don’t currently offer or use VCN, and 66% of APAC businesses don’t use VCN to pay for business expenses.
• VCNs have one of the highest rates of future implementation as (29%) of APAC businesses plan to invest in VCN or are currently in the discovery phase of implementation.
• Businesses that have implemented VCN have most benefitted from improved transaction security and reduced risk (65%), greater business efficiencies (64%), and improved expense reconciliation (59%).

“Virtual card numbers provide businesses with opportunities to enhance their payment capabilities and better serve their business needs and employees. It’s great to see so many businesses looking to adopt VCN solutions,” said Winter. “Whether businesses are exploring VCN for increased security or to improve their expense reconciliation capabilities, Discover Global Network can help businesses of all sizes benefit from our solution.”