2022: A big year for one-click payments in SEA?

When Amazon’s patent on one-click payments expired in 2017, fintech startups like Fast and Bolt stepped in to launch competing services in the US.

By making the tech available to small retailers, both startups have attracted a total of US$628 million in funding from investors so far.

As its name suggests, one-click payment lets shoppers cart out with a single tap. By storing a customer’s details on file, companies can enable shoppers to buy something without the need for extra steps like keying in personal details or filling out authentication requirements.

Fast’s checkout menu / Image credit: Fast

The result is a frictionless shopping experience that increases checkout rates. Fast, for one, says that its one-click checkout button has successfully increased conversions for its clients.

While major ecommerce marketplaces in Southeast Asia offer one-click checkouts on their own platforms, just a handful of startups provide easy integration of the feature for retailers. That said, the pieces are starting to come together that could make this more common in the region.

No one-click gold rush?

On the surface, expanding into one-click payments seems like a natural progression for the industry. Last year, online retail penetration growth in Southeast Asia outpaced that of Brazil, China, and India, with ecommerce gross merchandise value (GMV) in the region projected to grow by over 180% to reach US$132 billion by the end of 2021. By 2026, regional ecommerce GMV is expected to double to US$254 billion.

At the same time, online businesses in the Asia Pacific also suffered the world’s highest cart abandonment rates at 74%, compared to 70% in the Americas and 66% in Europe, the Middle East, and Africa. Complicated, multistep checkout processes contribute to these high figures and represent one of the biggest barriers that ecommerce players struggle with.

For many online retailers, reducing friction in the payments process is a clear priority, as speed and simplicity have been proven to drive up conversion rates and customer satisfaction.

However, tall hurdles stand in the way of implementing a seamless one-click payment process in Southeast Asia, compared to in the US.

For starters, the playing field is fragmented. Southeast Asia embraces a patchwork of payment methods that no single one-click solution can effectively crack for now. This is in marked contrast to the US, where credit cards, which solve authentication and identity verification in one fell swoop, dominate over other online payment methods, accounting for 47% of all ecommerce transactions and US$349 billion in annual online sales.

A hodgepodge of payment methods

“If you were to do one-click in Southeast Asia, it would look different from Fast and Bolt, just because of the different types of payment solutions and payment methods that people actually use,” explains Andri Wardhani, an associate at Golden Gate Ventures.

The early-stage venture capital firm is an investor in Indonesia-based payment gateway company Xendit and says it is watching the trend closely.

Streamlining checkouts

Not an easy sell