By Steve Villegas, PPRO
The world of payments is one of the most
innovative and fastest growing industries across the globe. Thanks to the
expansion of e-Commerce, consumers are no longer stuck with only being able to
shop at stores in close proximity to them. The world is starting to feel
smaller and thanks to the innovations in payments, we are entering an era of
untapped potential for consumers and merchants alike.
On the other hand, one thing holding us back
from reaching this potential is a lack of understanding around global consumer preferences.
This void of knowledge around the various types of payments preferred
worldwide, and how to properly offer these payments to global consumers, is
holding back many merchants. These local payment methods, or LPMs, are the
payment methods outside of traditional card and cash payments that help to meet
the needs of various geographies, cultures and economies around the globe.
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The Value Of Selling
Cross-Border
Currently, only 36% of U.S. merchants sell cross-border. This is partially due to a fear of growing internationally, and
because many merchants do not know how to effectively break into global
regions. These merchants are leaving money on the table as these various global
markets present a golden selling opportunity. For example, China
has a $1.03 trillion B2C e-Commerce volume showcasing a major rise in spending
power.
U.S. merchants should be looking to capitalize
on these growth opportunities overseas. For
example, the Chinese e-Commerce market is worth
$1.03 trillion and is growing at a rate of 18.6% a year. There are many resources available to help point them in the right
direction, like PPRO’s Payment Almanac 2.0.
Having the knowledge of the right LPMs to use in the correct market can make
all the difference in scaling a business globally.
Payments Are Local
Visa and Mastercard only account for 25% of
global e-Commerce payments, and this figure drops even further when we look
regionally. Visa and Mastercard combine to only make up 3% of China’s e-payment
split. LPMs are preferred
globally and U.S. merchants cannot rely on using traditional credit card
payments alone.
In Germany, for example, the main methods of
online payments are bank transfers. They make up 49% of online transactions, while
cash is only 5% and cards make up 11%.
This is a stark difference compared to payment
behaviors in the U.S., where 57% of online transactions are facilitated by
credit card.
These payment preferences significantly vary
from region to region, making the need to cater payment methods to consumer
preference so crucial. LPMs offer ease and comfort to consumers, while giving
merchants the capability to expand their business and reach new markets. U.S.
online merchants need to be strategic about how they scale globally, and LPMs
are an essential tool to help ease this transition.
Steve Villegas, VP of Partner Management at PPRO, is a Sales, Marketing and Business Development
Executive with over 20 years of experience building and managing sales, partner
development and marketing teams that have delivered profitable results, built
market share, and exceeded revenue goals while outperforming competition. Villegas
is a natural communicator and team leader with strong motivational skills, with
the ability to build, produce and succeed.
