ETA TRANSACT: Time To Break Out… And Cross Borders To Reach New Customers
It’s before lunch on day one of ETA Transact17 in Las Vegas; exhibitors are still putting the finishing touches on their stands in the main hall, so it’s the perfect opportunity to sit in on some of the breakout sessions, part of the educational program put on by the Electronic Transactions Association. And ‘breakout session’ seems particularly apt in this case, as panelists from ACI Worldwide, Planet Payment, and arvato launch into a discussion on how merchants and payment providers can ‘break out’ of their domestic markets and take advantage of the huge opportunity in cross-border eCommerce.
How big is this opportunity? Well, we’re not far past the opening remarks and already it’s been mentioned that UnionPay has issued more than 5 billion (debit and credit) cards, and highlighted that 70 percent of eCommerce transactions take place outside of the U.S. Further illustration that the ‘treasure’ in global eCommerce lies beyond the developed markets came via a discussion on India—specific to India’s driving of developments in mobile payments.
So with all this opportunity, why aren't merchants diving headfirst into the global waters? The answer may be that without the right tools, technology and partner(s), it's just not as simple as it seems…
Not all markets are created equal
All panelists agreed that when approaching a new market, it’s crucial to evaluate the payment types that the consumers in that market use most often and are most comfortable with (i.e., trust). In the U.S., we are very comfortable seeing the same 3-5 prominent card brands when we get to the checkout and get ready to make a payment. In contrast, when thinking about many markets globally, there may be half a dozen (or more) local or alternative payment methods that reflect the preferences of the consumers in that market. In a nutshell, think past cards.
There are other factors that payment providers and merchants need to consider when looking to sell into a new market. From language, currency, and legal requirements, to fees and tax implications. It's also important to understand other regulatory requirements, for example around whether or not a local legal entity is required in order to do business in that region or country. Assuming that collection or settlement are part of the equation, it may be necessary to have a local presence or financial entity based in that region, or find a partner that is already established in that area.
Plus, there are other considerations beyond payments that will determine whether cross-border expansion is viable in a particular market. What about delivery times? Think about it if you can compete with local merchants when it comes time to delivering goods in a cost-effective way in that market – the ‘last mile’ is all important.
Getting to know the good and the bad
Another critical part of the discussion focused on the fraud front, and understanding what is required to monitor and stop fraud when operating across multiple global marketplaces. One of my favorite comments was; “It's just as important to know who's buying from you as to know who is stealing from you." Without the right fraud management strategy and technology in place, you could be opening the doors to online theft. Remember the point is to grow revenue, not distribute it to the "digital bad guys."
If there was an underlying message running through this breakout session, it was "don't go it alone." Work with partners that have experience and insight into global and regional economies and infrastructures, and can guide you on the payment preferences that will enable success in that marketplace. Talk to established payment gateway, payment processing and fraud management companies that can guide you and provide perspective on the nuances of local and regional markets for global success.
Visit us at Booth #1027 at ETA Transact17, Las Vegas, May 10-12 to talk to us about cross-border eCommerce and the growth opportunities for both payment providers and merchants.
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