Helping ecommerce businesses accept local payments worldwide
We sat down with Kirill Evstratov, CEO of Cardpay to talk about current trends and what ecommerce businesses expanding overseas should be aware of when it comes to accepting payments internationally
Fintech Futures: Tell us about some hurdles e-commerce businesses have to overcome once they start selling to customers overseas?
Kirill Evstratov: Well, let’s be honest – once you embark on international expansion you are facing many challenges – from how to comply with local regulation to being paid by your customers and collecting those funds in the most efficient way. It’s not a secret that debit and credit cards are less popular outside of the US and Europe as people in other parts of the world prefer to pay with local payment methods – and these may vary a lot! There is an industry statistic showing that up to 20% of customers would abandon a shopping cart if their preferred payment method is not available.
FF: So is this user experience, convenience or security concerns problem?
KV: It depends on the country – in China for example life revolves around WeChat so the messenger itself has in-built payment functionality called WeChat Pay and significant number of Chinese consumers are using it as a primary payment tool. So clearly a convenience factor plays a big role here – you can buy things on the go, while chatting to a friend or consuming content on the web. QR codes are also ubiquitous so scanning them takes only a split second, all done from the same app.
Local mobile wallets are widespread in other Asian countries such as India, Thailand, Malaysia, Vietnam. These are established payment ecosystems which boast multi-million user base. Consumers developed a great trust in them over time and they are a preferred payment of choice for them.
In Brazil where close to 50% of population is still unbanked they use Boleto which is paper slip with a barcode or electronic voucher which can be scanned at any corner shop, cash gets counted and this way the online merchant gets paid. Seemingly complicated it’s just a part of the local culture and their daily routine. People don’t mind queuing up to pay as this is how they find out local news and socialize along the way.
In Mexico you have high card fraud rates so people are simply put off from sharing their card details online. Instead they use Paynet – a popular local platform allowing to pay in cash for goods and services bought online this way reducing risk associated with providing their card details to a merchant.
Another emerging trend are crypto payments, and early adopters in the emerging markets are looking for the ways to pay for goods online with digital currencies. And this doesn’t apply only to digital content. If crypto can be easily converted back and forth to fiat within the same wallet it becomes just another legitimate payment method and merchants need to be ready to accept it.
Wherever we go we observe that consumer behaviour, purchasing patterns and preferences are drastically different and any ecommerce business looking to accept payments there needs to take this into account. Thus, offering a wide range of international and local payment methods quickly becomes the new norm.
FF: And when you are launching in the multiple geographies it becomes an uphill battle?
KV: Yes, the problems can snowball quickly if you haven’t taken into consideration all these local specifics. You can go live, register a high traffic to your website but also observe a very low conversion rate. This happens for various reasons including clunky interfaces, high cost of shipping, long delivery times but if a customer still wants to pay and is unable to do so you simply lose revenue. This may have long-term implication on your business and its ability to succeed. The model which worked fine in Europe suddenly becomes less effective elsewhere – so it all boils down to consumer payment experience and a company’s ability to meet customer expectations. Having localised website content, offering payments in local currency and supporting local payments method greatly enhances the likelihood of a successful sale.
FF: Isn’t it what your company has been focusing on lately?
KV: Precisely, we are team of international financial technology experts who have built a platform allowing ecommerce businesses accept over 300 local payment methods. We greatly improve your ability to compete as by connecting to our platform you get instant access to a particular market and can start actively selling to your customers from day one. Essentially, we serve as your gateway to a local payment ecosystem.
What can be easier – one contract, one API integration, one dashboard to stay in control of your payments? We have real offices and local teams on the ground on 4 continents – and they always come to the rescue when you need them most. This sets us apart from many others – we can process payments in any currency and offer local insight and support from the subject matter experts.
FF: What kind of ecommerce businesses are most likely to benefit from your solution?
KV: We see a lot of value in partnering with global brands as consumers in the emerging markets have a healthy appetite for all the latest and the greatest from the fashion and technology trendsetters. As gadgets become more and more expensive, we can also provide an instalment payment option where customers can pay for an item in 3-12 equal payments spread over time. We also work with many businesses distributing digital content as they need to accept recurring payments from the multiple geographies. Another industry that we partner with very closely is Travel – the global travel market is growing in double digits thanks to increased demand from the consumers in Asia.
FF: How do you see eCommerce payments evolving from here?
KV: By industry estimates global eCommerce market is expected to reach $4 trillion in volume next year. Most of this growth is driven by Asian and LATAM markets. As disposable income of Asian consumers steadily grows, they demonstrate more purchasing power and consume more and more western products. This means competition will intensify and customer experience at the checkout will become of paramount importance. And this is exactly what we are trying to achieve – help our merchants optimize the checkout process, offer more local payment methods, more currencies, delight their customers and drastically improve conversion rates as a result.