Payments personalization enables a merchant to deliver a ubiquitous experience — consumers in any market can pay in any manner they choose.
We’re not there yet.
But BigCommerce CEO Brent Bellm, Computop CEO Ralf Gladis and PayU CEO Mario Shiliashki told Karen Webster that taking note of “payment cultures” around the globe will help merchants (and their payment service providers) capture high-growth emerging markets’ full potential.
It’s critical for merchants and their providers to understand the nuances of each market they enter – simply offering cross border payments won’t get global shoppers to hit the buy button.
Easier said than done, of course, as there’s technical heavy lift and process pain points that wind up turning into stumbling blocks.
“Our industry has failed the international merchants,” Computop’s Gladis said, adding, “We haven’t standardized global payments. International merchants have to put in so much effort.”
With that lack of standardization, Gladis said it’s imperative to find the right partners to guide merchants as they strive to offer a broader range of payments choice and help them tackle taxes and settlement once the payment is made.
The key is to have providers who are local specialists in markets — using data and analytics to uncover the nuances of “payments cultures” that help merchants serve all potential customers.
Without those specialists, complexities prove daunting before enterprises ever enter new markets.
“How do you as a platform or as a merchant, maximize your reach, but at the same time simplify your life by not dealing with more a plethora of payments options and providers?” asked Gladis.
On the consumer-facing side of the equation, simply offering a hodge-podge of payments options doesn’t work. It’s important to streamline what he called the “NASCAR of checkout buttons and options” — and only presenting the right options to each consumer in each market.
All too often, international merchants use their own frame of reference to drive their push into emerging markets. Shiliashki remarked that card-based transactions are the preferred payment methods in many developed countries — which are of course the “home” countries where those merchants are based.
“So that’s where they start,” he said.
Bellm related the pitfalls that can bedevil even the giants of commerce and payments.
During Bellm’s stint as VP of strategy and CEO of PayPal Europe in the earlier part of the millennium, as far back as 2004, “PayPal was trying to figure out how to expand successfully throughout Europe — and failing mightily in Germany.” Why? Because the card-based model that PayPal had originated in the U.S. didn’t work in every European country, and in particular, wasn’t working in Germany. In Germany, said Bellm, 70% of transactions were done by bank-based methods — not card-based methods.
To address the issue, the company initially started with Giropay in Germany, which required that PayPal establish local, bank-based accounts. PayPal subsequently branched out beyond Giropay to also include ELV, a direct debit payment method supported by banks, which also improved fraud rates. The shift helped solve a fundamental problem in Germany, said Bellm, namely enabling small and medium-sized businesses (SMBs) to take on eCommerce risks — and not to have to manage the risk themselves.
“PayPal had to learn how to do this,” said Bellm — and along the way, as Gladis chimed in, improved user experiences and payment innovation (and PayPal now stands, according to Shiliashki, as the only successful global digital wallet provider).
eCommerce has grown markedly since PayPal’s struggles in Germany, said the panelists. And now, no matter where an individual business is based, they can “stick” PayPal as a card-based wallet on their online checkout pages, which in turn enables them to serve customers and preferred local payment methods.
Why Merchants Must ‘Go Local’
“But PayPal,” said Bellm, “is hardly a substitute for a PayU and for tackling local payment methods in Colombia,” where only 50% of consumers use cards, and the rest use bank-based options, even cash. Card-based payments have become more nuanced. Installment and buy now, pay later options are proving especially popular, he said. Even subscription providers that are truly global, said Shiliashki, including Netflix, have to localize. They have to conform to licensing, VAT laws — and payments (and alternatives to cards) have to be layered on top of it all.
“Fundamentally,” said Shiliashki, “when you ‘go local,’ you have to ensure that your provider can do all this for you … and that it’s a provider that can work with each of the issuers in the country.” Linking up with those providers (PayU among them) can help address challenges such as knowing when (or whether) to charge VAT, or how to facilitate returns and refunds … all while embracing new digital wallets, super apps and real-time payments.
“You have to be on top of all this,” said Shiliashki, “and it’s amazing how quickly the payments landscape changes.”