Case Translation: Become a Vegetable Seller and

Win the Bank’s Quanlian “Micro-Banking” Ecosystem

Preface
On the day of the Mid-Autumn Festival, Auntie Gillian prepared a barbecue for everyone, but found that
she was missing a few supplies, so she took her mobile phone to Quanlian in the community to replenish
supplies. Unexpectedly, when I was about to check out, I saw a long queue of people in front of me.
The familiar call "Please support the cashier" sounded from the broadcast: After a while, several cashiers
opened instantly. Auntie Gillian slid open the PX Pay on her mobile phone and prepared to check out. At
this time, the cashier aunt enthusiastically wanted to help Auntie Gillian upgrade PX Pay to "full payment".
Auntie Gillian insisted that PX Pay had just been installed, she was used to it, she didn't need to bring cash,
the invoices were stored in it, and the details of each item were clear. It’s on your phone, so there’s no need
to upgrade to “Full Payment”. The cashier lady refused to give up and insisted on giving Auntie Gillian a
handful of green onions. She quickly helped Auntie Gillian log in her identity and personal information,
immediately upgraded to "Full Payment", and checked out quickly and completed the payment. The cashier
aunt was very proud that the new members of "Full Payment" on the Mid-Autumn Festival met the KPI.
Although Auntie Gillian was murmuring in her heart, she felt that the cashier aunt was dinging on her
mobile phone.
It's inappropriate to help upgrade "full payment", but for the sake of the green onions, it comes in handy
during the Mid-Autumn Festival when vegetable prices soar, it’s just a half push and a half acceptance.
On the day when everyone was reunited for the Mid-Autumn Festival BBQ celebration, "Full Payment"
exceeded one million members within ten days of its launch, writing a legend in Taiwan's electronic
payment industry and breaking the market record set by Quanlian's own PXPay in May 2019. After several
years of practical experience in Jiekou Pay, You Jinrong, the newly appointed general manager of "Full
Payment,” wants to change the rules of the market game. He shouldered the tough battle of officially
launching "Full Payment" on September 1, 2022, and worked hard every day. Keep an eye on the number
of new members added to Quanlian's "Full Payment", which has surpassed one million members in just ten
days since its launch, once again fell below the market. Expert's glasses, why are Aunt Gillian and the
cashier aunts so cooperative?
"Mr. Quanlian" - the cheapest image
Quanlian Supermarket has more and more branches opening (Figure 1). In addition to fresh food and cooked
food, it also offers a variety of daily necessities. It is the first-choice store for mothers-in-law in the
neighborhood alleys. In an early interview with the image creative team, Quanlian Chairman Lin Minxiong
mentioned that 7-Eleven stores are always opened at crossroads, while Quanlian stores are all opened in
community alleys, and there are no parking lots, in order to save rent. The number of fluorescent lamps
installed on the ceiling of general supermarkets is more than that of Quanlian, and the aisle width of general
supermarkets is also wider than that of Quanlian. These savings in electricity bills and space are part of
Quanlian's business philosophy that every penny counts and every penny cannot be wasted. For the welfare
of mothers-in-law, Quanlian is constantly striving to maintain price competitiveness in the fiercely
competitive retail industry. The success of Quanlian is due to its deep understanding of mother-in-law's
consumption priorities. Just like the deeply rooted image of "Mr. Quanlian", a series of advertisements
focus on an honest and honest ordinary person, introducing Quanlian straightforwardly, with no obvious
signboards and no appearance. There is no parking space on the floor, and it is only advertised as "the
cheapest" from beginning to end.
2019: The sudden rise of Quanlian PX Pay
Looking back at 2018, Quanlian entered its 20th year and once shouted: "In the next 20 years, we will enter
physical e-commerce." At that time, there was a fierce debate within Quanlian: Should we start e-commerce
first? Or membership? Or Pay first? Xie Jiannan, vice chairman of Quanlian, believes that in the future,
whether it is a physical store or e-commerce, every transaction will require payment, so mobile payment,
which is more conducive to management and use, should be prioritized by Quanlian (Financial News, 2020).
In May 2019, Quanlian launched PX Pay (Figure 2) for the first time. Starting from the existing 8 million
members with welfare cards, it quickly converted two million to become founding members. Then, through
Quanlian’s store staff, we assist customers in downloading the App and book bonuses for each store’s PX
Pay download volume. In just a few months, the number of PX Pay members quickly reached 4 million.
Originally, the market thought that PX Pay would eventually enter a period of flat growth, and competitors
could take a breather. Unexpectedly, Quanlian launched a member recommendation mechanism to allow
PX Pay members to recommend other new members, thus pushing the number of PX Pay members to 7.5
million. As of September 2022, the number of registered members of the Federation has reached 8.3 million
(more than one-third of Taiwan's total population).
About 30% of Quanlian's revenue is paid through PXPay, with monthly transaction volume reaching NT$4
billion Yuan, PX Pay’s overall number of registrations and active members ranks first among channels. It
not only overtakes channel electronic payments that were established more than 10 years earlier, such as
Uni-President iCASH, but also payment operators that also belong to the QR code, such as: LINE Pay,
Jiekou, and international NFC payments launched two years ago, such as Apple Pay (Table 1-1), have all
caused great pressure. The huge cash flow from the retail channel handled by PX Pay is even more difficult
for other electronic payment players to match. This whirlwind of action payment has left those in the early
stages of the payment industry at a loss as to what to do.
2022: Why does PX Pay need to upgrade to "Full Payment"?
In the past, Auntie Gillian used PX Pay, a so-called third-party payment. You can simply download the App
and bind your bank's credit card to the PX Pay payment wallet. When Auntie Gillian checks out, she slides
open her phone and beeps, and she can clear the customs, save money, and reduce long queue times. In
terms of cash flow processing, Quanlian can save a lot of cash processing time and costs, allowing the
cashier to shorten the time of counting money and checkout and get off work early every day.
However, for Quanlian, PX Pay is at best an agent for bank card settlement. The details of the customer's
consumption at Quanlian, what credit card was used, how much amount was used, and other personal
information are all contributed and stored at the bank under the regulations of the Financial Supervisory
Commission. The consumption flow and information flow of these customers are just passers-by and
fragments of the whole connection and cannot be connected in series.
In order to connect this flow of people, money, and information to become the precious big data of Quanlian,
it drives the wild development of Quanlian determined to further invest funds and apply for bank entry.
Finally, on March 1, 2022, it was approved by the Financial Supervisory Commission and issued a full
100% By investing in the electronic payment business license of "All Payment (All Payment Electronic
Payment Co., Ltd.)", you can have the flow of customers' card consumption information on an equal footing
with banks (Table 2).
"Full Payment" is an upgraded version of PX Pay, a third-party payment company in China. The newly
designed app targets young people and provides additional payment, stored value, transfer, cross-electronic
payment wallets for mutual transfers, buying and selling foreign currencies, and small-amount cross-border
services. Inclusive financial services of micro-banks such as remittance and fund trading. In the future,
diversified and life-oriented service functions will be added to the "Full Payment" APP. This is the biggest
difference between PX Pay, the predecessor of "Full Payment", and micro-banking.
Lin Minxiong, chairman of Quanlian, said: "Full payment is very new and is played by young people.
Quanlian promotes full payment for social responsibility. Taiwan has always lacked strong payment.
Quanlian is closest to consumers, so it is obligatory. Become a leader in the industry. PX Pay's annual
transaction volume is approximate the amount of 60 billion yuan, accounting for one-third of the entire
transaction volume of the entire alliance. Member stickiness is very high, and its scale ranks first in third-
party payment. If all PX Pay can be transferred Zhiquan Pay, coupled with the ability to spend at many
channels outside Quanlian, is expected to become the leader in Taiwan's payment. Quanlian's current goal
is to help PX Pay's 8.3 million members transfer to Quanlian." (Economic Daily 2022/03/23)
In order to provide a convenient and secure payment experience for the majority of consumer groups and
achieve inclusive finance, 9 days after becoming one million electricity payment members, You Jinrong,
general manager of "Full Payment", expressed his worries in an exclusive interview with "World", "We
have always believed that the biggest obstacle is that consumers do not bring their ID cards to Quanlian (so
they cannot complete the upgrade of PX Pay). Moving from third-party payment to electronic payment "full
payment" will bring more convenience to consumers and bring more new users. Smart consumers should
choose to upgrade to "full payment" to use it. (Science and Technology News, 2022)
Can "Full Payment" really be used on channels other than Quanlian?
Can "Full Payment" really become the "only one" on users' mobile phone screens? Long before "Full
Payment" was launched, the local promotion team of the All-China Federation of Trade Unions was already
intensively deploying channels in different industries. As of September 2022, it has cooperated with "Full
Payment" and signed contracts with 140 brands (Figure 4) and more than 100,000 stores, and it continues
to work with partners to expand channel territory through local promotion teams (Economic Daily, 2022).
This will make "full payment" no longer limited to mothers-in-law buying groceries on Quanlian, but in
daily life, young people can also "beep" by swiping open their mobile phones to buy breakfast, drink coffee
or even hand-made tea from street shops. You can "beep" while drinking.
It is worth noting that in order to accelerate the expansion of the channel sharing concept, Quanlian has
taken a fancy to the "new retail" trend of the second brother of the supermarket, whose family is young and
petty bourgeoisie, and announced "Quanpay" and "Quanying Pay" (Quanlian joins forces) Strategic alliance,
the two giants have a total of approximately 5,000 physical stores and more than 22 million members
(Vision Magazine, 2022) (Table 3). The cooperation agreement between the two parties is that the channels
of Quanlian and FamilyMart are interoperable. In other words, "Quanlian Pay" can be used to check out at
FamilyMart, and "Full Pay" can also be paid at Quanlian. Just like now, you don’t have to go to a bank to
receive money or transfer money. It is more convenient to go to supermarket ATMs. On the other hand, if
you go to Quanlian to buy groceries in the future, you can also buy funds or foreign exchange. Quanlian
Supermarket is mostly populated by women and older people, while FamilyMart is mostly populated by
men and young people. Their customer groups do not overlap, and the products on the shelves are also
differentiated to a certain extent. The alliance between the two parties will be able to play the role of one
plus one. The effect of two. This "all-in-one" strategic alliance should be of relatively strategic significance
in terms of economic benefits compared to signing channel brand contracts one by one through local
promotion teams. Why are channel retailers eager to try such a money-burning cross-industry alliance
across retail financial services? Lin Minxiong, chairman of Quanlian, even appointed his eldest son Lin
Hongbin to personally take charge of "Full Payment", and even made a bold statement: "If you want to be
the payment leader, you will lose ten thousand dollars." Years of preparation!" It can be seen that Quanlian's
investment in the retail financial industry is serious (Economic Daily, 2022).
The prototype of the new retail financial industry "ecosystem"
An important trend in the financial retail industry in the next 10 years is "What method are you going to
use to make consumers willing to spend more?" Taishin General Manager Shang Ruiqiang believes that the
channel with the highest consumption frequency is the supermarket. Once the consumption frequency is
not high, at this time, mobile payment is bound to encounter challenges in the future (Today's Weekly, 2022).
The goal of "Full Payment" is to become an open platform for all banks, providing members with diversified
payment usage scenarios, and extends to daily life chain restaurants, department store shopping, street
beverage shops, amusement parks, transportation and other payment scenarios, introducing payment into
food, clothing, housing, transportation and entertainment, deepen the convenience and breadth of payment
use, and jointly create a payment ecosystem with consumers and stores as the core.
From the perspective of the retail industry, although Quanlian "Quan Pay" and FamilyMart "Quanying Pay"
have strategic alliances, Uni-President "iCash Pay" also has an electronic payment license and cooperates
with Uni-President Supermarket and its group channel Bip Pay. Especially after the Uni-President Group
announced the acquisition of Carrefour, it spans supermarkets, supermarkets, department stores, mass
merchandisers, catering and other industries, and it is still a retail financial service that cannot be
underestimated. The alliance between the Family Mart and the All-China Federation of Trade Unions has
put considerable pressure on the Uni-President Group to some extent. When "All Payments" wants to
expand the frequency of consumption channels again in the future, it is inevitable to challenge "iCash Pay"
head-on and compete. In any case, the current strategy of Quanlian "Full Payment" and "FamilyMart"
"Qualying Payment" to unite secondary enemies to fight against the main enemy is still a relatively active
approach. Before the main enemy has not yet started to fight, the strategy is to integrate and create
momentum, which is quite similar to Japan's PayPay What does joining forces with LINE Pay mean? The
field is quite promising.
The epidemic helps the advent of "micro-banking" in retail channels
In the two to three years since the COVID-19 pandemic, several waves of near-city lockdowns have resulted
in a decrease in physical transactions, causing the amount of "mobile payments" used by Chinese people to
soar. In order to catch up with the global trend of "cashless society", the Taiwanese government began to
promote mobile payment in 2016. With the popularization of smartphones and the establishment of digital
financial departments by banks, they are promoting digital accounts and the digital ecosystem. The field of
mobile payment has greatly increased; therefore, Taiwan has already entered the "Warring States Era of
Electronic Payment" (Figure 2)
According to statistics as of August 2022, domestic electronic payment users have crossed the 18 million
threshold (accounting for nearly 80% of Taiwan’s total population) (Figure 3) (Table 1), and Taiwan’s
electronic payment market has squeezed into 11 specialized operators, coming to the era of "11 Little
Dragons". Due to the grand debut of "full payment", electronic payment not only reorganized the financial
ecology, but also expanded and shuffled the circulation territory. To paraphrase Mei Hua, the newly
appointed chairman of Jiekou Pay, this is nothing more than the optimistic about the unlimited imagination
of turning retail channels into "micro-banks" (Kayou News Network, 2022).
Hu Zili, a senior industry analyst and team leader of the Institute of Information Technology (MIC), a long-
term observer of the electronic payment industry, said that even though the waves behind the Yangtze River
push the waves ahead, "when will profits and losses even out?" and "How to create market differentiation?"
These two thorny issues still test the “all-payment” of Quanlian (Vision Magazine, 2022).
In the future, will electronic payment replace cash payment as the mainstream? According to the MIC
survey, cash payment is still the bulk payment tool, accounting for as high as 71%. Hu Zili bluntly stated
that it is still difficult for electronic payment or other mobile payment to replace cash payment. However,
the "channelization" and "technology" of payment are trends, and the connected ecosystem and business
opportunities are the key to the cross-industry layout of retail. Who can win in electronic payment? How to
win? It needs to understand users' pain points, connect consumption journeys such as daily life, and quickly
accumulate active users to reach a certain market share, which may even bring higher investment benefits
to the retail industry. Only by efficiently integrating channels and bank-side marketing resources,
connecting member feedback mechanisms, and obtaining comprehensive market analysis and product
development strategies through data can we successfully transform into a retail financial micro-bank. To
paraphrase Xie Jiannan, vice chairman of Quanlian, once said: "The first 20 years of Quanlian were about
saving money and convenience, and the focus of development in the next 20 years is fun!" How to combine
7/14 smart phones through physical retail channels, It will be a very important step. (Business Times, 2020)
Have you "paid in full" today?
Questions and Discussion
1. Why did Quanlian jump from the retail industry to the payment industry PX Pay? Quanlian Pay is a new
service upgraded from third-party payment PX Pay to electronic payment by Quanlian. What is the
difference between the two? Electronic payment requires a real-name identity authentication mechanism.
How can Quanlian break through this barrier and accelerate the upgrade of full payment? What are the
strategies and market goals of full payment?
- Quanlian jump from the retail industry to the payment industry → Quanlian entered its 20th year
and once shouted: "In the next 20 years, we will enter physical e-commerce." Xie Jiannan, vice chairman
of Quanlian, believes that in the future, whether it is a physical store or e-commerce, every transaction
will require payment, so mobile payment, which is more conducive to management and use, should be
prioritized by Quanlian (Financial News, 2020).
Quanlian made the strategic leap from the retail industry to the payment industry with the introduction of
PX Pay due to several reasons:
a. 擴張返圖 → To have a larger customer base, and the customer can have more convenience where
they can use the service wherever they go. All-in-one-fits-all.
b. 異業合作 → 全聯 → for :
a. 互補 (complementary) to younger people; and main TA is to housewives and grandmas
b. 增加 the 瀑光 (exposure) of their app, and 支付市場 (financial/payment market size).
c. 合力對抗 (working together to defeat) competitor e.g. 總一集團和 7-11
d. Allow the 生態圈 (transaction ecosystem）to be bigger, and obtain the 網路效應(network
effect).
c. Strategic Vision: Recognizing the increasing importance of digital transactions in the future of
commerce, Quanlian aimed to position itself at the forefront of this trend by integrating electronic
payment services into its offerings.
d. Customer Convenience: By providing electronic payment options like PX Pay, Quanlian aimed to
enhance the convenience and efficiency of transactions for its customers, thereby improving their
overall shopping experience.
e. Data Utilization: Quanlian sought to leverage the transaction data generated through electronic
payments to gain insights into customer behavior and preferences, enabling more targeted
marketing strategies and product offerings.
f. Competitive Advantage: By pioneering electronic payment solutions tailored to its customer base,
Quanlian aimed to differentiate itself from competitors and strengthen its market position.
- Quanlian Pay represents an evolution and upgrade from the third-party payment service PX Pay to a
comprehensive electronic payment platform offered by Quanlian. Here are the key differences between
PX Pay and Quanlian Pay:

• Regulatory Compliance, 資金單性 → PX Pay is 比較輕鬆 compared to 全支付。全支付 have a

stringent security because its main feature is dominating the financial transaction features.
• 資料分析 → for 全支付, 信用公司 can do this too. From the data that is analyzed, it is more of a
qualitative-approach rather than quantitative where we can get insight. In contrast, PX Pay only
can contain data.
• Scope of Services (Function): PX Pay primarily served as a third-party payment platform
facilitating transactions between customers and banks. It typically focused on basic payment
 functionalities, such as enabling customers to use their mobile phones to make purchases at
Quanlian stores (like 產品範圍；Scope of Product). In contrast, Quanlian Pay offers a broader
range of services beyond basic payments. It includes additional features such as stored value,
transfers, cross-electronic payment wallets, remittance, fund trading, and small-amount
cross-border services (like 微 型 銀 行 ；Microbank). This expansion of services positions
Quanlian Pay as a more comprehensive electronic payment solution.
• Target Audience: While PX Pay may have catered to a general audience seeking convenient
payment options, Quanlian Pay is specifically designed to target young people. It aims to appeal
to a broader demographic and attract a new generation of users by offering enhanced functionalities
and a more user-friendly experience tailored to the preferences of younger consumers.
• Inclusive Financial Services: Quanlian Pay goes beyond traditional payment services to provide
inclusive financial services akin to those offered by micro-banks. These services include
features such as remittance and fund trading, which cater to the diverse financial needs of
consumers. By incorporating these additional services, Quanlian Pay aims to establish itself as a
one-stop solution for both payment and financial transactions.
• Integration with Quanlian Ecosystem: Quanlian Pay is seamlessly integrated into Quanlian's
existing ecosystem of stores and services. This integration enables users to access Quanlian Pay
directly from within Quanlian's mobile app or website, streamlining the payment process and
providing a cohesive user experience across the entire Quanlian platform. This integration
fosters customer loyalty and encourages users to utilize Quanlian Pay for their financial transactions.
The strategies and market goals of Full Payment include:
- Offering diverse payment services and financial products to cater to various consumer needs.
- Expanding its user base by targeting young demographics and providing incentives for adoption.
- Leveraging Quanlian's existing infrastructure and customer base to establish Full Payment as a
leading player in Taiwan's electronic payment industry.
- Creating a seamless payment experience across different channels and industries, thereby
enhancing customer loyalty and engagement.

2. Why did Quanlian and FamilyMart form an alliance? What are the motivations and abilities of retail
competitors to invest in this cooperation plan? Will they eventually continue to cooperate or part ways?
The enemy of my enemy is a friend? What will happen if Quanpay and Quanying Pay join hands? What is
the vision of constructing and creating an electronic payment ecosystem?

- Why did Quanlian and FamilyMart form an alliance? Uni-President "iCash Pay" also has an electronic
payment license and cooperates with Uni-President Supermarket and its group channel Bip Pay. Especially
after the Uni-President Group announced the acquisition of Carrefour, it spans supermarkets, supermarkets,
department stores, mass merchandisers, catering and other industries, and it is still a retail financial service
that cannot be underestimated. → the current strategy of Quanlian "Full Payment" and "FamilyMart"
"Qualying Payment" to unite secondary enemies to fight against the main enemy is still a relatively
active approach. Before the main enemy has not yet started to fight, the strategy is to integrate and create
momentum, which is quite similar to Japan's PayPay that joining forces with LINE Pay mean? The field
is quite promising.
- What are the motivations and abilities of retail competitors to invest in this cooperation plan?
a. Market Expansion and Competition: Retail competitors recognize the importance of expanding
their market reach and staying competitive in the rapidly evolving retail and payment industries.
By forming alliances, competitors like Quanlian and FamilyMart can combine their resources
and capabilities to create synergistic benefits and gain a competitive edge over other players
in the market.
b. Strategic Positioning: Retail competitors may see alliances as a strategic move to position
themselves more favorably in the market. By joining forces, they can strengthen their market
position, enhance their brand image, and differentiate themselves from competitors. This
strategic positioning allows them to attract more customers, increase market share, and drive
business growth.
c. Customer Acquisition and Retention: Retail competitors understand the importance of acquiring
and retaining customers in a competitive market environment. By offering integrated services
and seamless experiences through alliances, competitors can attract new customers and retain
existing ones. This customer-centric approach helps improve customer satisfaction, loyalty, and
lifetime value, ultimately driving revenue and profitability.
d. Innovation and Differentiation: Retail competitors recognize the need to innovate and differentiate
themselves from competitors to stay relevant in the market. By partnering with other industry
players, they can leverage each other's strengths, capabilities, and expertise to develop
innovative products, services, and solutions that meet the evolving needs and preferences of
customers. This focus on innovation and differentiation helps competitors stay ahead of the curve
and maintain their market leadership position.
e. Ecosystem Creation and Collaboration: Retail competitors understand the importance of creating
ecosystems and collaborating with other industry stakeholders to create value for customers and
drive business growth. By forming alliances, competitors can create seamless and integrated
experiences for customers across different channels and industries, fostering customer loyalty
and engagement. This ecosystem approach allows competitors to expand their reach, access new
markets, and unlock new revenue streams.
- What will happen if Quanpay and Quanying Pay join hands?
➢ Enhanced Payment Accessibility: The integration of Quanpay and Quanying Pay would expand
the reach of electronic payments across a diverse range of retail environments. Customers would
have access to a wider network of payment acceptance points, including supermarkets,
convenience stores, department stores, and other retail outlets affiliated with both Quanlian
and FamilyMart. This enhanced accessibility would make electronic payments more convenient
and ubiquitous for consumers, driving adoption and usage.
➢ Seamless Payment Experience: By joining forces, Quanpay and Quanying Pay could offer a
seamless and integrated payment experience to customers. Users would be able to use a single
payment platform to make purchases across various retail channels, streamlining the
checkout process and eliminating the need for multiple payment apps or methods. This unified
experience would enhance convenience and efficiency for customers, encouraging greater usage of
electronic payments
➢ Expanded Services and Features: The collaboration between Quanpay and Quanying Pay could
lead to the development of new services and features that enrich the electronic payment
experience. For example, users may gain access to loyalty programs, rewards, discounts, and
promotions that are integrated seamlessly into the payment process. Additionally, innovative
 functionalities such as split payments, peer-to-peer transfers, and in-app purchases could be
introduced to enhance customer engagement and satisfaction.
➢ Cross-Promotion and Marketing Opportunities: By joining hands, Quanpay and Quanying Pay
could leverage their combined marketing resources and customer bases to drive cross-
promotion and marketing initiatives. This collaboration could involve targeted campaigns,
special offers, and promotions designed to incentivize customers to use electronic payments and
patronize affiliated retailers. By leveraging synergies between the two brands, Quanpay and
Quanying Pay could strengthen their market presence and attract new customers.
- Creation of an Electronic Payment Ecosystem: The overarching vision of constructing and creating an
electronic payment ecosystem involves building a comprehensive and interconnected network of
payment solutions, services, and stakeholders. By joining hands, Quanpay and Quanying Pay would
contribute to the realization of this vision by expanding the reach and capabilities of electronic
payments across different industries and channels. This ecosystem would facilitate seamless
transactions, foster innovation, and unlock new opportunities for businesses and consumers alike.
3. Compared with traditional financial institutions, when retail channels expand into financial services
such as electronic payments, what are the benefits? And what are the risks and challenges that may be
encountered in operations? In response to the two thorny questions "When will profits and losses be made?"
How to respond to the challenges of "Two Levels?" and "How to Create Market Difference?"

- Compared with traditional financial institutions, when retail channels expand into financial services
such as electronic payments, what are the benefits? →
Benefits:
a. Diversification of Revenue Streams: By offering financial services such as electronic payments,
retail channels can diversify their revenue streams beyond traditional retail sales. This can
help mitigate risks associated with fluctuations in consumer spending patterns and economic
downturns.
b. Enhanced Customer Engagement: Providing financial services increases customer engagement
and loyalty. Customers who use electronic payment services within retail channels may be more
likely to return to those outlets for their shopping needs, leading to increased customer retention
and lifetime value.
c. Cross-Selling Opportunities: Retail channels can leverage electronic payment platforms to
cross-sell other products and services. For example, they can promote discounts, loyalty
programs, or financial products to users of their electronic payment services, thereby increasing
sales and revenue.
d. Competitive Advantage: Offering electronic payment services can provide a competitive
advantage in the retail industry. Retailers that provide convenient may attract more customers
and differentiate themselves from competitors.
And what are the risks and challenges that may be encountered in operations? →
Risk
a. Regulatory Compliance: Retail channels entering the financial services sector must navigate
complex regulatory requirements, including those related to consumer protection, data
privacy, and financial regulations. Non-compliance can lead to legal and financial penalties.
 b. Security Concerns: Electronic payment platforms are susceptible to cybersecurity threats
such as data breaches, fraud, and identity theft. Retailers must invest in robust security
measures to protect sensitive customer information and maintain trust in their payment services.
c. Operational Complexity: Managing electronic payment platforms requires significant
resources and expertise. Retailers must invest in technology infrastructure, personnel training,
and ongoing maintenance to ensure smooth operations and provide quality customer service.
d. Market Competition: Retail channels face competition from established financial institutions
and fintech companies offering electronic payment services. Competing in this crowded
market requires retailers to differentiate their offerings, innovate, and provide unique value
propositions to attract and retain customers.
Responding to Challenges:
a. Profitability Assessment: Retail channels should conduct thorough financial analyses to
assess the profitability of their electronic payment ventures. This includes evaluating costs,
revenues, and potential risks to determine when profits will be realized and how to mitigate
lossess.
b. Two Levels Strategy: To address the challenges of operating in both the retail and financial
services sectors, retailers should adopt a two-pronged approach. This involves leveraging their
existing retail infrastructure while also investing in specialized resources and expertise for
financial services operations.
c. Market Differentiation: Retail channels can create market differentiation by focusing on
customer-centric strategies, innovation, and value-added services. This may involve offering
unique features, partnerships with fintech companies, or personalized experiences tailored to the
needs of their target market segments.