Cashless can be painless for SMBs in Asia

Smartphones could become the new wallets in Asia Pacific, among other changes brought about by the digital revolution. Governments in the region have been stepping up efforts to encourage digitisation, particularly among small and medium-sized businesses – which form 96 percent of all enterprises in the ASEAN region. In Singapore, for example, one of the country’s major Smart Nation initiatives is to set up a common platform for e-payments across the public and private sector.

The increased urgency from the public sector to boost usage of cashless payments is not without reason. The cost of using cash and cheques in Singapore is estimated at about S$2 billion a year, or 0.5 percent of its GDP. With 99% of the country’s approximately 217,000 enterprises made up of SMBs, drastically increasing adoption of e-payments services among small businesses is crucial to reducing that cost. Some sectors that the Prime Minister has already identified where much more can be done to boost cashless payments include  cash transfers, retail stores and hawker centres.

Of course, nowhere has the move towards setting up a cashless economy been more evident than in India. In November last year, the government banned its 500 and 1,000 rupee notes, essentially draining 86% of the currency in circulation. While the measure was implemented to combat corruption and the black market, the sudden cash scarcity also prompted a swing of dependency toward debit/credit card and mobile wallet payments. Paytm, India’s largest mobile wallet vendor, registered upwards of seven million transactions worth Rs. 1.2 billion (US$ 17.6m) in a day following the move. Another provider, PayU, saw its average daily transaction volume doubling immediately after the demonetisation.

Three things SMBs should do to prepare for the cashless economy

For smaller businesses and retailers, going cashless may seem difficult, but the potential and convenience of it cannot be understated. There are a few things that businesses in India and across Asia can do to prepare themselves for the oncoming wave of cashless transactions.

Compliance with data security standards

As acquirers of personal data, it is important for businesses to recognise that they have an ethical obligation to keep customer information safe to the best of their ability. Ensuring that personal data is protected also helps companies to build trust among customers. Security is no longer just a marketing buzzword used to drive sales among consumers today, it is likely to become a far larger consideration in the near future as digital payments become mainstream. Businesses would do well to make the effort to ensure their operations adhere to existing data security standards such as the PCI DSS and ISO 27001. This gives customers the assurance that actions to prevent snooping around their data are being taken, such as ensuring that web connections used to send data are securely encrypted. By ensuring that not only they, but also their partners, suppliers and vendors are in compliance with such frameworks, businesses can create a much-needed, top-down system of trust among consumers.

Changing business mindsets toward cybersecurity

An equally important part of the equation lies with business leaders themselves. In our current climate of digital transformation, security is no longer a problem that can simply be solved by purchasing the best defence or antivirus system and waiting for it to fend off threats. Company executives must understand that the cybersecurity issue not one to be dealt with in private by the IT department. Instead, it has to be an effort that involves every stakeholder. Staff education initiatives should be included as part of a holistic approach to cybersecurity. Security concerns should also be made part of the boardroom agenda to ensure that business leaders are able to adequately consider security issues in their resource planning.

Education of consumers

As much as businesses can do their utmost to secure and protect data that is entrusted to them, it is often the end-user that is the weakest link in security. Individual consumers often carry a mindset assuming they are unlikely targets of cybercrime as compared to large enterprises worth much more. However, what they often fail to realise is that cybercriminals tend to gravitate towards the easiest – rather than the most valuable – targets. Through phishing and social engineering attacks, many consumers end up becoming cyber ‘drug mules’ carrying malicious code. As such, it is in a business’ own interest to take an active role in educating their customers on security best practices. By protecting their customers, they can effectively reduce the attack surface on their own assets and minimise risk of breach.