Tuesday, October 5, 2021
Researchers anticipate a resurgence in ride-hailing, travel and remittance apps following the COVID-19 shutdowns. How can technology providers help drive recovery efforts in the post-pandemic economy?
Because of COVID-19, the global payments industry is experiencing a rapid shift toward digital payment methods, particularly driven by the growing number of shoppers using ecommerce for the first time during the pandemic. Payment technology fulfills consumers' expectations to make purchases or receive funds anytime, anywhere, using their preferred methods, safely and efficiently.
Travel was one of the industries most impacted by the pandemic, but it was also the first to respond to the changes the situation demanded. Now that people are getting vaccinated, countries are reopening their borders and flight demand is increasing, travel companies need to guarantee their clients can buy their tickets. Payments in installments are already common across Asia and Latin America for high-value average ticket purchases such as plane tickets, tours or vacation packages.
For those without access to bank accounts and credit cards, one of the solutions is the now very popular buy now, pay later (BNPL) payment method. There are many players in the payments market offering this solution, giving merchants many options to choose from; at the same time, the challenge of integrating all of them can be a nightmare.
Remittance companies have been under a lot of pressure because of COVID-19. The industry has been resilient, since people on lockdown still need to send money overseas, but volumes have gone down significantly. Companies that facilitate international money transfer need to find systems to get access to emerging markets, where remittance is critical to keep economies growing. dLocal serves as that highway connecting companies to these countries. With dLocal's technology and its One dLocal concept—one API, one platform, one contract—they have instant access to open payment corridors in 30 countries across Africa, Asia, Latin America, and the Middle East.
In addition, issuing physical and virtual prepaid cards in emerging markets will be critical for the remittance industry to recover. With such technology, unbanked and underbanked populations in emerging markets will be able to receive and use funds instantly on debit cards that can then be utilized online and in-store for daily purchases.
When it comes to ride-hailing companies, they need to focus both on smooth pay-ins and pay-outs now that the volume of rides is increasing again around the world. It is crucial that riders find their preferred local payment method so they can use the service. Because of COVID-19, more people adhered to digital alternative payment methods (APM).
Given the volume of APM options available, choosing a technology provider ... that gives access to 600 different payment methods from 1 API, one platform and one contract is ideal for ride-hailing companies to incorporate technology that best serves their customers. Payments technology also supports the drivers. Many drivers use these apps as their livelihood.
What advice and best practices should merchants follow when implementing cross-border payouts and pay-ins?
International online companies face various challenges when trying to gain access or expand in emerging markets: adhere to local compliance, regulatory, and tax frameworks; offer transparency and security for their end-users; address inherent fraud risk while maximizing acceptance and conversion; gain insights from their transaction data; and identify and engage with partners that can scale as their emerging markets operations expand.
We advise merchants to partner up with technology providers that have deep expertise in the markets they serve. The more complexity they can simplify, the better.
Furthermore, merchants should keep in mind that when going international, they are competing against local players. And to be on a leveled ground, they need to adapt to local preferences, such as cashed-based methods and installments in Latin America, mobile money in Africa, or bank transfers in Asia.
How did the pandemic help drive global ecommerce, and do you expect accelerated digitization to be sustainable in a post-pandemic economy?
COVID-19 has changed the way people shop. This is especially true in Africa, Asia and Latin America. Because so many countries mandated full lockdowns, many people who had never used an online shopping channel decided to try them as an alternative for the first time, driving sales through the roof. And we believe they are now here for the long run.
We expect digital channels to consolidate in the next 3 years, from those same customers who have just started exploring eCommerce. A recent report by dLocal and Americas Market Intelligence shows that in the 31 emerging markets covered in the study, the volume of processed payments transactions will reach US$445 billion by 2024.
A full copy of the dLocal study is available at dlocal.com/insights/regional-and-country-guides/the-ultimate-guide-to-unlocking-ecommerce-growth-in-emerging-markets/
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