By Donna Sesto Neary
Payvision
Sales professionals looking to go global would be hard pressed to find a better starting point than the Asian marketplace. Commonly referred to as APAC, the Asian market encompasses more than 50 countries, including Japan, China, India, Hong Kong, Singapore, the Philippines, Thailand, Cambodia, South Korea, Vietnam, Taiwan and Malaysia.
What makes this region so attractive? For starters, it is home to more than 2 billion people and, according to recent studies, 700 million of them use the Internet.
In Korea, alone, there is 90 percent Internet penetration. Many governments throughout the Asia-Pacific Rim are pushing e-commerce and, because of that, card-not-present transactions are growing more rapidly in APAC than any other area of the world.
Then there are the methods of payment. While APAC is somewhat fragmented, and different countries may utilize unique, local debit cards or alternative payments, MasterCard Worldwide and Visa Inc. still provide the most popular forms of payment.
Operationally, the Asian and the U.S. markets are similar. They employ the same types of bank identification number sponsorship, processing platforms, gateways, back-office operations, reporting and statements, and, most importantly, settlement processes - if you partner with an entity supporting global acquiring in the area where you choose to do business.
You can take advantage of this extraordinary opportunity as long as you do your due diligence. Select an appropriate processing partner who understands the many differentiators throughout the Asian marketplace and the challenges of doing business in a culture-centric market completely driven by relationships.
The United States is reseller-oriented. ISOs and merchant level salespeople (MLSs) are constantly signing, re-signing and moving merchant accounts from one company to another. In Asia, acquiring follows a different path. The banks have direct relationships with merchants, and there isn't a heavy penetration of ISOs.
Therefore, it is paramount to select a global partner that has established relationships with local financial institutions as well as a comprehensive understanding of the languages and currencies found in the countries where transactions are occurring.
You cannot enter a foreign market like APAC with a U.S. perspective. You must understand the relationship-based culture and build on that.
Do you have the time and resources to build a relationship with local APAC entities? For most ISOs and MLSs, the answer is a resounding no.
The right global partner does and, in most cases, already has created a physical presence in Asia. Such a partner can help you set up your U.S. merchants in the Asian markets and help you acquire Asian merchants to expand your portfolio.
For example, if it seems too daunting to open an office in Singapore, all you need do is align with an established global partner. Your partner will support local domestic acquiring accounts and help you get incorporated in the region of your choice.
A primary benefit of setting up local domestic acquiring accounts is the potential for a substantial decrease in interchange rates and the absence of cross-border fees. In the United States, for instance, the interchange rate is upward of 3 percent.
With an Asian incorporated merchant account, the rate can drop by as much as 50 percent with no downgrade. That's a big savings in anyone's bankbook.
It's not surprising, then, that ISOs embracing APAC are making great inroads into portfolio expansion. These savvy sales professionals are surveying their existing merchants, examining sales that are being transacted out of the Asian region and taking the leap into Asian incorporation.
APAC is a viable option, but do your research. Set aside appropriate resources. Look at your merchants' statements. Ask the important questions. Are they selling in Asia? Are they shipping goods to this region? Are they willing to incorporate and save money? If the answer to these questions is yes, the obvious next step is to sign with an experienced global partner.
At Payvision, we are seeing more Asian banking entities courting U.S. acquiring relationships; they are more open now to following a global acquiring model than ever before.
Even if you are not yet ready to go global, put this sphere on your radar today. If you don't, your merchants could easily be wooed by someone who does.
Donna Sesto Neary is Director of Business Development at Payvision. She can be reached at d.neary@payvision.com.
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