Unlocking new levels in payment options

Photo by cottonbro

Game Xtreme was founded more than eighteen years ago. From their beginnings in a humble shop house, they have grown to a familiar presence through their multiple retail outlets in heartland malls.

While the pandemic has affected their brick-and-mortar retail, it did not curb the need for personal entertainment, and Game Xtreme has met the demand by expanding their e-commerce offerings. This has given them the opportunity to work with platforms like Lendor in expanding their reach and offering new payment methods for their customers.

SMEhorizon speaks with Aaron Choo, Co-Founder. Game Xtreme on his company’s journey and its forays into e-commerce and payment offerings. Chuan Wei Zhang, CEO/Co-Founder of Lendor also shares on the new payment methods available, including Buy Now Pay Later (BNPL) and Try Now Buy Later (TNBL), and what these mean for retailers.

A humble start

According to Aaron, the early days of their operations saw them focusing on buying, selling, and trading a wide range of devices. “Over time, we started to focus more on gaming consoles, video games, mobile phones and electronic gadgets.”

While they have established a strong presence in heartland malls across the island, the pandemic pushed them to expand in different directions. Aaron acknowledges that their business was not overly affected. “When the government announced the circuit breaker, there was a rush for gaming needs as people wanted more personal entertainment for home usage.

“There was definitely some impact to our retail business but we met this demand by expanding our e-commerce offerings. It was a learning opportunity to expand our knowledge and offerings on fulfilment and direct delivery to our customers.”

“Government aid and support was also a tremendous help,’ he adds.

Today, Game Xtreme sells on Qoo10, Shopee, CapitaLand, Fraser Mall and also direct to consumer via their own website.

New ways to pay and play

Alongside the new platforms to reach customers have also come new ways for customers to purchase their products. These include Buy Now Pay Later (BNPL), also known as point-of-sale instalment loans, which allow consumers to make purchases and pay at a later time, typically in a predetermined number of instalments.

In October 2021, the Monetary Authority of Singapore assessed that BNPL schemes “do not pose significant risk to household indebtedness”. However, more recently, the Singapore FinTech Association (SFA) has formed a BNPL Working Group to “develop a BNPL Framework for the Singapore market.”

This aims to “mitigate risks of consumer over-indebtedness, ensuring that BNPL offerings will have a positive impact on Singapore consumers, as well as continue to benefit the ecosystem.”

Even before the formation of this working group, companies like Lendor have noted some of the associated risks with BNPL. This has prompted them to encourage newer models such as Try Now Buy Later (TNBL), which provides consumers the option of renting products to try first before deciding whether there is a need to actually own them.

“This way, when a customer decides to purchase,” says Wei Zhang, “they will not waste any money, get a device they love, and the environment thanks them. This is extremely useful for expensive purchases, especially in consumer tech.”

While TNBL is gaining ground in overseas markets such as US, Canada, Europe and Australia, Wei Zhang admits that “this shopping experience has not been in Asia in a big way.

“A big reason why is that is it not easy to execute, “ he explains. “How do you screen your consumers effectively as you will be giving them a sample of 3 laptops to try? The potential for theft and fraud is extremely high.”

This is on top of the risks of fraud and non-payment already inherent in both BNPL and TNBL. As such, established and robust platforms are needed to reduce the amount of risk to merchants.

Reaching new levels

Overall, Game Xtreme has found their experience with Lendor and TNBL a positive one. “TNBL may not have been something we planned to offer before Lendor,” shares Aaron, “but it is a good way to reach out to a wider market as long as it is executed well.”

“We have managed to reach out to new consumers who are more budget restricted or very new to video games in general. This lowers the barriers of entry for them to try more gaming products.”

Nonetheless, Aaron remains prudent when advising other Singapore retailers who want to expand their range of payment methods. “Our main challenge is that electronic products have very low margins and the fees of most payment methods fees reduce the margins even further. This is a major impact to the business,” he shares.

On this note, Wei Zhang adds that “diversifying the range of payment options is not the only way to gain traction”.

“Having a diversified omnichannel strategy is equally important. And as we move forward, we believe consumers will want the flexibility of rentals and device as a service solutions.” 

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