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Expert opinion

How to become a payments polyglot

Tuesday 21 May 2019 | 10:20 AM CET

James Booth, VP of new business development at PPRO, talks about payments complexity across borders and how businesses could learn to ”speak payments”.

Do you speak payments? If you want to expand your business internationally, you’ll need to become a payments polyglot. We get under the skin of how and why people pay the way they do. Plus how knowledge of the psychology of payments can pay dividends commercially.

Polyglots know and use several languages. When it comes to commerce, merchants need to speak the customer’s language. This is more than just translating their website and offering local delivery options, although this is important. It’s about personalising the what, when, where, and how of selling to customers.

Commerce is contextual

The holy grail of marketing is marketing to a segment of one. Enabled by intelligent systems and insight, this is type of customer-centric commerce is becoming a reality. At the same time, customer expectations have grown. Customers expect to browse, shop and buy anytime, anyhow, from any device or funding source. This has implications for channels and payments.

Old channel distinctions will fall away in the new era of customer-centric commerce. Customers will not be able to see or feel the join as they buy online and collect or return in-store. Or order in-store for delivery later. According to research company Forrester, 55% of European retail sales will either take place online or take place offline yet be digitally influenced by 2021.

Payments play a huge enabling role in customer-centric commerce. The right payments offered in the right way at the right time help make for a simpler, smarter and more customised experience. Yet how and why people buy depends on so many factors. How and why they pay depends on a whole host more.

Each country speaks its own payment language

Customers have different considerations and needs when they buy their morning coffee, pay their gas bill, order a take-away or purchase a second-hand car. Payment habits are strongly contextual as well as national. They have developed over time and are formed by various cultural, political, economic and technological factors. Lesson one in learning to speak payments: each country speaks its own language.

For example, there are only 1,000 km between the capital cities of Germany and Sweden, yet their payment cultures are worlds apart. Germans love cash. It is the most frequently used payment method, accounting for 74% of all transactions in 2017, according to a Bundesbank report. Meanwhile cash in circulation in Sweden has declined 50% in the last decade. Only 13% of respondents paid cash for their most recent purchase in a shop, says the Swedish central bank.

Ecommerce merchants diversifying into different countries or region often conflate digital commerce with digital payment. However, one is not a reliable proxy for the other. Offline ways to pay for online purchases are incredibly popular worldwide. In Brazil, for example, the popular local cash-based payment method Boleto Bancário has a 15% market share. E-cash is popular across Latin America and Asia, where the banked population is low.

Generalising hugely, while plastic cards are popular in the US and UK, in Europe with a high banked population, bank transfers are popular. In Africa, it’s mobile money and in Asia, it’s e-wallets.

The more digital, the more local

Payment preferences also differ between people within the same country, let alone between countries and regions. Trends point to greater fragmentation rather than consolidation of payments. Global payment brands such as Visa and Mastercard account for only 23% of global ecommerce payments. This will fall to 15% by 2021, a Worldpay study says.

At the same time, there are more local payment methods than ever before — more than 350 of relevance worldwide. These tend to follow consumers wherever and however they shop, at home or abroad, online or in-store. Acquirers, PSPs and merchants must accept that unless they can localise payments, they will miss out on sales.

For example, if you’re selling online in the Netherlands or trying to appeal to Dutch eshoppers, then accepting iDEAL is a must. 57% of online purchases are made via this bank transfer method. Web shops in more than 60 countries worldwide now also offer iDEAL as a payment method to Dutch customers. Merchants report substantially higher conversion rates – up to 90% – as soon as they add iDEAL as a payment option, claims iDEAL.

Lesson two in learning to speak payments: the more global and digital the commerce, the more local the payment. Businesses need to localise payments to close sales.

Choose the right payment partners

Greater personalisation on the front-end in turn creates greater complexity on the back-end. So, the right payments infrastructure is essential to drive customer-centric commerce. Acquirers, PSPs and merchants differentiate their offering by focusing on the front-end customer experience. Therefore, the need for local payment expertise as well as a centralised, value-adding hub for payments has never been greater.

Lesson three in learning to speak payments: find the right partners to take care of payment complexity. PPRO helps make payments easier. When it comes to local payment methods across 175 countries, we are the payment professionals. We process, collect, reconcile, consolidate, and pay out all on one contract and with one integration and platform.

About James Booth

James Booth has more than six years' experience in the financial sector. Prior to joining PPRO in 2015, James headed up Business Development in the UK for mobile payment company Payleven. There, James was in charge of sourcing and maintaining key strategic relationships with retailers across the UK to fulfil their progressive growth and sales strategy. He played a key role in contributing to Payleven's transactional volume growth that eventually led to its merger with SumUp. Since joining PPRO, James has been promoted to Head of New Business Development. His key responsibilities include leading the partner development team to win new business and on­board/ manage all new clients who integrate into the PPRO platform. In addition he manages key strategic partnerships and aligns the product roadmap with that of PPRO's customers.

About PPRO

PPRO enables integrated electronic payment processing on a global scale spanning the entire payments value chain from acquiring through processing, collection and settlement. PPRO acts as a B2B payments hub, connecting PSPs and other merchant aggregators, such as acquirers and processors, with local payment methods.

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