Digital technologies are the "great equalizer" of our time. If you’re a business, digital means it’s now easier than ever to reach new markets. If you’re a customer, you now have access to products and service from almost anywhere on the planet.
The impact is most evident in the e-commerce space, an industry that’s expected to be worth US $424 bn by 2021. But, even offline, businesses are increasingly operating in an international marketplace at every stage of the supply chain.
Against this backdrop, businesses can no longer afford to treat payments as a mere commodity and as a result the role of Payment Service Providers (PSPs) is changing. Business no longer have to go it alone when it comes to planning and deploying cross border strategies and today’s international merchants use PSPs as partners, leveraging their capabilities and experience to shape new multi-market B2C and B2B commerce services.
Indeed, a recent Paysafe White Paper has identified five proven payments strategies for businesses that stimulate cross-border growth and expand reach by engaging new audiences.
1. Explore alternative payment methods to deliver variety, choice and relevance
From money remittance to electronic payments and beyond, relevance is often underrated — an unsung hero, if you will. Nowhere is this more apparent than in e-commerce, where 46.1% of cart abandonment issues occur at payment stage.
Consumers want to pay using the payment method they know and prefer, and this isn’t always a credit card or some other traditional means of payment. So, with international markets now more competitive than ever, offering the right mix of payment methods can make the difference between success and losing a significant chunk of business.
Relevance depends on many factors, including the cultural context, people’s attitudes and the economic circumstances in a given market. There’s no one-size-fits-all solution. At the same time, offering a large number of different payment options may not be feasible. The cost of implementation can be high. And the potential return on investment may not be enough to justify the expense
So, to maximise your appeal to as many customers as possible, it’s worth exploring alternative payment methods. From digital wallets that link to individual customers’ preferred card or account to payments using cryptocurrencies, alternative payment methods can address the issues of relevance and variety whilst also being scalable.
Alternative payment methods also offer other benefits, including mobile-optimised solutions, recurring payments and multi-currency payments.
2. Use security and compliance as a unique selling point
Security in digital payments presents a unique challenge.
On the one hand, having robust checks in place is key. Unauthorised transactions and other fraudulent activities can result in chargebacks eating away at your revenue. And, there’s the risk of long-term loss of business caused by reputational harm and lack of consumer trust.
Regulatory pressure is also increasing. For instance, PSD2 — which will enter into force in January 2018 — calls for 2-factor authentication on all electronic payments over €10 (at the time of writing, €10 is approximately US$11.18).
But customers often find security procedures complex, frustrating and annoying. Indeed, PSD2’s security requirements have caused considerable alarm in payment circles due to concerns about increased friction and, consequently, greater shopping cart abandonment rates.
Clearly, choosing payment methods that offer a happy medium between security and ease of use can put you at a considerable advantage, as they allow you to stand out by adding value via an outstanding user experience.
3. Build a seamless experience across different channels
The days when consumers transacted business through a single channel are long gone. More and more, they start transactions on one channel — typically their smartphone — and finish through another, for instance at a local store. Which is why omnichannel has become a strategic priority for 37% of businesses.
In the B2B space, omnichannel is also growing in importance. Actual purchases aside, a majority of B2B customers want to view their activities across all channels and have access to a unified account and order history. In other words, convenience is a universal need, irrespective of the type of customer you service.
Consumers typically think of shopping as one single experience, even when transactions involve different channels or a cross-border dimension. And they always expect payment to be easy and safe, whatever the time, date, location, type of product and availability.
So, offering a seamless payment experience across channels and borders can help customers feel more connected to your brand. In turn, this builds trust and boosts loyalty, which enhances customer retention.
Speaking of customer loyalty:
4. Add value to your payment solutions
Offering added-value payment solutions is a great way of building brand loyalty whilst also standing out from the crowd. And this holds true as much for B2B customers as it does in the B2C space.
Adding value doesn’t mean reinventing the wheel. It can be as easy as using existing payment methods in novel ways.
A case in point, you can deploy prepaid cards as loyalty cards, so they serve both as a payment method and as a way to collect rewards. Similarly, online credit financing and pay later programmes allow customers to spread costs — which can lead to larger purchases — while also encouraging them to return.
5. Serving the underserved
Last but not least, offering payment methods that give the underserved access to the digital economy is a great growth opportunity.
People often take bank accounts and credit cards for granted, especially in the West. But the underbanked are everywhere, not just in developing countries. In Europe, for instance, 138 million people still don’t have a bank account, even though the Payment Accounts Directive grants all EU citizens the right to have one.
Even where access to banking services isn’t a problem, some people simply prefer using cash. And this precludes them from participating in the digital economy.
Alternative payment methods that allow people to convert cash into digital currency can create inroads into largely untapped markets, and help economies become more inclusive by bridging the gap between the analog and digital payment spheres.
There’s never been a better time to expand beyond the confines of your local market. But, as cross-border commerce continues to grow, setting yourself apart from the competition will also become more challenging.
Savvy customers now value convenience more than ever. So, the most successful cross-border merchants will be those with the foresight to leverage payment technologies, alternative payment methods and value-add tools such as prepaid and online financing to provide safer, simpler, more relevant and seamless shopping experiences.
For this to happen, partnering with a trusted cross-border payment services provider is crucial. Aside from help selecting the right technology and transitioning smoothly, your payment services provider offers many other benefits. Their expertise can help you boost your return on investment. And their solutions can help you drive competitive edge and speed up expansion and growth.
Looking for more insights on how to harness cross-border payments to drive e-commerce growth? Download our free White Paper now.