Rapid Increase in On-site Payment Orders via Delivery Apps
[Asia Economy Reporter Kim Cheol-hyun] Since the distribution of the emergency disaster relief funds, on-site payment orders through delivery applications (hereafter apps) have significantly increased. Just three months ago, due to the spread of the novel coronavirus infection (COVID-19), non-face-to-face payments increased when ordering delivery food, and payments made directly on-site face-to-face were on the decline. However, since the disaster relief funds were distributed last month, on-site payments where the funds can be used have increased.
According to Wemakeprice on the 13th, the number of 'meet and pay' orders on the delivery and pickup service 'Wemakeprice O' from the 12th of last month to the 7th of this month grew by 123% compared to the previous four weeks. The popular menu items were chicken, pizza, Korean food, bunsik (Korean snacks), and jokbal (pig’s trotters) in that order. Wemakeprice O offers two payment methods: 'pay immediately' and 'meet and pay.' Previously, most orders were made using 'pay immediately,' which is convenient and allows for contactless receipt of food, but since the disaster relief funds were distributed, 'meet and pay' has been increasing.
Analysis by the delivery agency Barogo of customer payment methods for delivery orders during the weekends from the first to the second week of May also showed that on-site payment orders on the first weekend after the disaster relief funds distribution, May 16 and 17, increased by 7.9 percentage points compared to the weekend before the distribution. Among on-site payment methods, the proportion of 'card payments' also rose by 7 percentage points during the same period.
This change is attributed to the effect of the disaster relief funds and is quite different from the trend three months ago. Barogo’s analysis of delivery order customer payment methods from March 4 to 10 showed that the proportion of prepayment orders increased by 6 percentage points compared to January 4 to 10, before the COVID-19 spread. On-site payments decreased from 43% to 37% during the same period. Additionally, on 'Baedal Minjok' (Baemin), as of early March, about 93% of total orders were 'pay immediately' orders where customers pay at the time of ordering.
An industry insider from the delivery app sector explained, "Due to the spread of COVID-19, consumers who preferred contactless delivery orders mainly chose prepayment methods, but after the disaster relief funds were distributed, it seems that on-site payment choices have temporarily increased in order to use these funds."
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