OCT 3 — Payments have evolved along with commerce, or more accurately, where commerce has risen, payments have adapted with new products, new entrants, and new rules of the game.

If the first decade of this millennium is defined by the rise of the Internet, e-commerce, and electronic payments, what will the next 10 years look like? While it took a full decade for e-commerce and e-payments to become mainstream, we are already seeing glimpses of the future in the first years of this decade.

According to a recent PayPal survey, Singaporeans spent S$1.1 billion (RM2.64 billion) on online shopping last year and this will increase to S$4.4 billion in 2015.

Today, analysts estimate that almost 40 per cent of offline retail is in fact influenced in some way by online activities like search, comparison shopping and couponing.

In addition, new markets such as digital content, social networking and group buying have emerged, which require new innovations in payments.

The mobile device is completely blurring the lines between the brick-and-mortar and e-commerce worlds, not just offline to online, but also with the point-of-sale. The store is now in every consumer’s pocket, creating the need for safe and convenient mobile payments.

We expect to see some incredible innovations that will change how payments will evolve in the next few years. Here are two exciting payment trends to watch out for.

Mobile, Mobile, Mobile

Call it the wallet in the cloud or the digital wallet, but mobile devices are poised to become a primary form of payment for millions of people in the Asia-Pacific region.

The regional m-commerce market (for physical goods) is expected to reach US$139 billion (RM436 billion) next year, based on a research by knowledge and information provider Informa.

Home-grown mobile apps like the one from local online pet store SingPet.com are blurring the lines between offline and online commerce by putting a store in your pocket.

Users of the SingPet mobile app can now scan to buy — anytime, anywhere — over 5,000 pet-related products. Singaporeans only need to grab their smartphones, scan the barcode on their pet’s favourite food or toys, quickly pay with two taps on the mobile screen, and their purchases will be delivered within 48 hours. Voila, no more time-consuming journeys to the pet store.

Imagine this “store in your pocket” scenario being repeated for anything you buy in the retail store today. Clearly, mobile payments are here to stay and will see significant growth as people shop and pay on their mobile devices.

Social Commerce

Social shopping is clearly poised for significant growth — as hundreds of millions of people connect with friends, family and colleagues on social networks; it is only natural that merchants would follow them.

When you combine the notion of social shopping with group buying you get a very powerful experience that has the potential to appeal to millions of consumers.

During the recent Great Singapore Sale (GSS), the average daily transaction volume of Singapore PayPal users buying from local merchants grew by 29 per cent during the GSS period (May 27 to July 24) compared to the pre-GSS period (January 1 to May 26).

Furthermore, daily deal sites accounted for six out of the top 10 PayPal merchants with the fastest growth during the GSS period.

Singaporeans were clearly looking forward to the great online deals during GSS, but where they were shopping online during this sales period truly shows the power and popularity of social commerce.

It may be unfathomable now but keep in mind three things: First, we went through a similar phase 10 years ago when many people dismissed e-commerce and electronic payments as a niche market.

Second, there is a new generation of consumers whose first experience with online commerce is through mobile devices and social networking. And, finally, offline and online payments will continue to merge into something that is drastically different from where we are today. What will remain constant is the centre of the commerce ecosystem: The consumer. — Today

* Elias Ghanem is managing director and general manager of Paypal Southeast Asia and India.

* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.