By Dale S. Laszig
DSL Direct LLC
As merchants expand their global footprints, many are surprised by the diversity of payment methods across countries and continents. For example, Alipay is the leading payment scheme in China, and bank transfers are more popular than credit cards in Germany.
"Retailers that use native currencies and payment methods are impressed by how differently consumers transact in other parts of the world," said Dmitry Savchenko, Chief Executive Officer and founder of Payzoff, a global payment gateway and SaaS platform. "Supporting these various payment methods can help business owners improve margins and rapidly scale."
While merchants may find it easy to attract shoppers from around the world to their sites, they've learned it's not nearly as easy to turn shoppers into buyers, especially shoppers who don't find their favorite payment options at checkout. Some merchants would like to boost conversion rates by accepting more payment methods, but have no idea where to start. Others, who have successfully incorporated hundreds of payment schemes into ecommerce sites, have described the integration as simple, affordable and adaptable.
Following are several approaches to helping merchants expand their payment offerings.
Merchants can work with global payment gateways to facilitate alternative payment acceptance. Software developers and digital content providers can use available application programming interfaces to adapt global platforms for diverse industries, which may include online subscription service providers, dating and gaming sites, social media, and donation carts. Many of these gateways also provide advanced analytics and risk management services to enable providers and end-users to assess the profitability and performance of alternative payment acceptance.
Accepting alternative payments can take the guesswork and ancillary fees out of cross-border transactions. Consumers can confidently check out without worrying about delayed currency conversion rates and foreign bank fees. Merchants can pass through payment options without dealing with multiple banks and intermediating processors. And consumers and merchants alike keep more of their own money with every transaction.
Merchants who accept only Visa, Mastercard and American Express overlook equally important credit and debit card brands in other parts of the world. China UnionPay, the world's third-largest payment network after Visa and Mastercard, reported that it is accepted in 100 countries besides China. Bancontact/Mister Cash is a leading debit card issuer in Belgium, and Brazilian prepaid card Elo stated it has a base of more than 50 million consumers.
Studies have shown that customers who don't find their top-of-wallet credit cards at checkout have a higher risk of abandoning shopping carts. Direct acceptance of all major payment card brands eliminates foreign transaction fees and reduces the risk of lost revenue.
Prepaid products are popular among numerous demographics and widely used in developing countries that lack traditional payments infrastructures. General purpose, reloadable prepaid cards are also a useful budgeting tool for banked and unbanked consumers. Consumers can obtain prepaid accounts without sharing personal information or credit history.
Many prepaid products include value-added services, like currency conversion and loyalty programs. Prepaid schemes are not subject to interchange and are prefunded, which increases reliability and makes them less prone to chargebacks.
Mobile and virtual wallet usage is expected to exceed $3 billion by 2022, according to a recent study by Zion Market Research. E-wallets function in much the same way as physical wallets. Transactions are fast, secure and frictionless, eliminating many of the fees associated with traditional payment cards and international transactions.
Alipay noted that its e-wallet has no transaction fees and is supported by Visa, Mastercard and 65 financial institutions; its escrow feature enables consumers to verify that they are satisfied with a product or service before releasing funds to a merchant. The global e-wallet scheme ecoPayz stated it supports 45 currencies in 159 countries and supports up to three ecoCards in multiple currencies.
A promising innovation, real-time bank transfers leverage the secure credentials of online banking accounts while keeping payment card data out of scope of merchants and processors. Many employ multilayered security to further protect transactions from online fraud. According to recent reports, Sofort GmbH banking processes 3 million transactions a month across 30,000 ecommerce sites, and TrustPay, licensed and regulated by National Bank of Slovakia, processes instant bank transfers from more than 60 European banks in 52 countries and supports 10 payment methods.
Bank transfer payments, unlike other forms of credit, securely move funds between consumer and merchant bank accounts, using the highest forms of security available while eliminating ancillary fees. Many participating merchants pass through courtesy discounts with every bank transfer transaction.
Javelin Strategy & Research predicted mobile proximity payments will exceed $90 billion and retail payments via mobile apps and browsers will reach $318.8 billion in 2020. Developing countries are adopting Apple Pay, Samsung Pay and other schemes, supported by mobile network operators, studies have shown. Some, like DaoPay, which states it serves users in 48 countries, require no credit card or bank account. Others, like Turkey's 3pay, work with multiple carriers and offer prepaid and credit services.
Mobile phone payments leverage the secure element in mobile phones and robust infrastructure of established mobile networks. Merchants appreciate the prompt, cost-effective transaction processing and enhanced security of these mobile payment schemes.
Growing consumer and retailer adoption of bitcoin and other digital currencies has prompted gateways and service providers to support cryptocurrency schemes. Online retailer Overstock disclosed Aug. 8, 2017, that it will accept all major "alt-coins." The company has accepted bitcoin for years and will now accept Ethereum, Litecoin, Dash, Monero, and Bitcoin Cash.
Merchants who accept alternative payment methods provide an expanded menu of payment options to make payments safe and convenient for their customers. Customers can check out with mobile payments, prepaid cards, e-wallets, e-vouchers, bank transfers and more. These options can help turn shoppers into buyers, while improving merchants' conversion rates and profit margins.
Dale S. Laszig, Senior 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 dale@dsldirectllc.com and on Twitter at @DSLdirect.
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