The Green Sheet Online Edition
August 22, 2016 • Issue 16:08:02
The very point of sale:
What's in your payment mix?
The online marketplace has made mom-and-pop retailers discoverable to consumers around the world, many of whom don't carry credit cards in their wallets ‒ if they have wallets at all. Some transfer money from their banks to pay for foreign merchandise; others check out on their mobile phones and get billed later by their carriers.
Visa Inc., Mastercard and American Express Co. are leading payment card brands but only part of the global payment mix. Prepaid, debit, bank transfer, e-wallet, mobile phone and cash payments are more popular than credit cards in many markets. Consumers who don't see the familiar, trusted brands of their favorite payment methods will frequently abandon online shopping carts.
Possible, probable, profitable
A white paper published in 2015 by Pitney Bowes, titled Possible? Probable. Profitable! Meet consumers wherever they are, demonstrates that ecommerce has come into its own. The merchant-facing report urges business owners to adopt a global ecommerce strategy or "risk being left in the retail dust."
"It is [important] to align your digital presence to international consumers in a way that meets your buyers' expectations," the authors wrote. "Consider cultural norms and shopping preferences. Provide localized and personalized content that is available on the device of choice in that region."
Catering to the shopping preferences of a diversified, global clientele means enabling consumers to research digital goods in their native languages, navigate websites without waiting for pages to load, and use their preferred currencies and payment schemes. "An upscale U.S. department store chain working with Pitney Bowes is able to sell and ship to more than 220 countries via a website that reflects regional differences based on the currency the shopper chooses," the report stated. "In fact, the company recently began selling in China using Alipay's ePass solution and has seen great results."
Pay inside the lines
ISOs and acquirers know that simply adding a payment type to an ecommerce site can be complicated for a number of reasons. First, there's the matter of regulations and compliance, which vary by region. Without a knowledgeable partner's guidance, it's easy to step out of bounds and get hit with penalties. For example, Europe's General Protection Data Regulation (GPDR), which goes into effect in May 2018, enforces methods for using European citizens' data.
"By treaty, non-compliant organizations can be held accountable for any breach," said John Wethington, Vice President of Americas, Ground Labs Pte. Ltd., an international security software provider. "Fines are substantial and the regulatory commission has broad levity about what they can do."
Wethington noted that GPDR's "right to be forgotten" requires organizations to erase any sensitive data related to individuals who assert their privacy rights. "Organizations that fail to do so will be investigated and must prove they have removed the individual's information or face a fine," he said. Ground Labs provides a data template designed to enable client companies to remotely manage and delete sensitive data to comply with GPDR guidelines.
Find the right partner
Payment preferences vary by country and region, and consumers take their favorite payment methods with them when they travel and shop online. Credit cards may be popular in Europe, but bank transfers lead the way in Germany, and mobile wallets are all the rage in China. How can merchants keep up with all the alternative payments? Pitney Bowes recommends finding a knowledgeable resource, well versed in payment schemes and regional protocols.
"Consider working with a partner that understands payment preferences and will take pricing risks out of the equation," the authors wrote. "If currency fluctuations cause [costs] to change, your partner will honor the original exchange rate for the life of the transaction, even through a return, if necessary, absorbing any difference."
Dmitry Savchenko, Chief Executive Officer of global payment platform Payzoff, said, "Keeping up with local laws across major markets is tough and complicated. It's essential to work with a team of professionals who can keep track of tax regulations, international compliance monitoring, currency conversion factors and more."
Think inside the app
Many U.S. merchants offer only standard card brands in their ecommerce sites, a mistake in today's global environment. At a June 2016 summit hosted by ACI Worldwide, Terry Jones, founder of Travelocity.com and founding Chairman of Kayak.com, predicted that 59 percent of retailers will be influenced by the web in 2020. "As we look to the future, we can't create the old world in the digital world," he said. "Where does payment happen when I one-click? Consumers are choosing which payment card to embed in their e-wallets and payment apps."
As the battle over embedded cards intensifies, card issuers are sweetening the deal. Copy from Chase.com exemplifies this: "Uber is one of the best ways to get wherever you're going. Now you can get a free first ride (up to $30) when you use your Chase credit or debit card to set up your new account and enter the promo code ChaseUber."
Embedded payment forms inside an app are convenient for consumers because they seamlessly blend into the app instead of redirecting shoppers to a separate payment page. And they use tokenized payment credentials to protect personal information.
Hope for small merchants
Today's consumers expect pricing transparency, share their own buying experiences and routinely read other people's reviews before purchasing products. "Customers are wired and dangerous," Jones stated. "They're Internet-empowered, tech savvy, data rich and socially engaged." He noted that capturing their business will require tenacity, agility and clarity of vision. "It's better to rewire yourself than to have someone do it for you," he said. "If you don't like change, you'll like irrelevance even less."
How can MLSs help mom-and-pop retailers rewire their ecommerce sites to appeal to an international clientele? They can take the advice of Savchenko and the Pitney Bowes report authors and partner with specialists who understand alternative payment types and diverse regulatory landscapes. An array of affordably priced, white-label payment solutions can help merchants get closer to the ever-elusive 100 percent conversion rate, using a simple application programming interface to support hundreds of payment schemes and cross-border commerce. Then, the next time a merchant asks about alternative payments, you can confidently say, "There's an app for that."
Dale S. Laszig, Staff Writer at The Green Sheet and Managing Director at DSL Direct LLC, is a payments industry journalist and content provider. She can be reached at email@example.com and on Twitter at @DSLdirect.
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