How can Local Payment Methods meet global merchants' needs

Thursday 26 August 2021 06:16 CET | Editor: Anda Kania | Interview

Frank Breuss and Philipp Nieland, the minds behind Nikulipe, reveal how the company’s new solution enables consumers to make cross-border payments while helping global merchants access new markets

Nikulipe is a relatively young player on the market. Can you elaborate on what problem you aim to solve in the payments space? 

Frank Breuss: Nikulipe’s story actually began many years ago. The founding team has known each other for many years and has successfully worked together in the past. Since then, we have been focusing on working out how to help consumers to shop on international merchants’ websites, even if they do not have access to a credit card. Our answer to this? Giving merchants access to those Local Payment Methods (LPMs) consumers can and want to pay with. We have seen huge gaps in the market, especially related to fast-growing and emerging markets, where there is a great potential to reach consumers that want to buy from global merchants or use digital goods like streaming, etc. but have specific locally formed habits of paying for those goods or services. 

Philipp Nieland: While merchants have access to a large selection of global commerce-oriented LPMs in saturated markets like Germany or the Netherlands, it is much harder for them to easily reach consumers in smaller, emerging, or fast-growing markets; either because there is no suitable Local Payment Method existing or because it's very complex to reach them. This includes not only the technical connection itself, but especially the complexity around regulation, money collection, FX, and so on. Most existing fintechs in the payments industry tend to focus on the same large markets and neglect the smaller or more challenging ones.

Frank Breuss: This is why we have started Nikulipe – to empower consumers from fast-growing and emerging markets to take part in global ecommerce. We know what international merchants need and, at the same time, we have the experience in these matters – how to solve the complexities for the merchants and payment service providers (PSPs), so that they could reach new consumers and new markets. Our solutions can give them access to new as well as existing LPMs in emerging markets that show fast ecommerce growth. When no suitable LPM is found, we create them instead, just as we have done with banklinq, a new payment method we have just launched for the Baltic region.

What is the current ecommerce penetration in the Baltics? And is there a strong appetite for cross-border shopping? 

Philipp Nieland: The popularity of ecommerce in the Baltics has seen a surge of 10% in 2020. Unsurprisingly, this upward trajectory in the region is expected to continue, and by the end of 2024, the combined ecommerce revenue of the region is predicted to reach over USD 3 billion – a 12% increase that will account for 30% of retail sales growth.

Consumers from all three of the region’s countries – Lithuania, Latvia, and Estonia – have shown a growing interest in cross-border shopping since the start of the pandemic, seemingly forming a new habit as interest in global ecommerce has not diminished. The pandemic highlighted the convenience of shopping online and the Baltic consumers are no longer satisfied with just local options, they are looking beyond their borders for foreign goods and brands that have become more accessible. 

Furthermore, how do people from this region prefer to pay? What are the most popular payment methods there?

Frank Breuss: Only around one-fifth of the region’s population has a credit card, and nearly 65% of Baltic shoppers prefer to pay via online banking. 

Sadly, most international merchants currently don't yet offer a suitable solution for Baltic consumers to pay with their preferred way of payment. There is also a lack of payment options that meet those merchants' needs. This is limiting consumer choice when it comes to shopping on international platforms. If their e-shops do not offer the preferred local payment method, the shoppers are more likely to abandon the shopping cart. The option to pay through their favourite bank online, which banklinq offers, is tried and true for Baltic consumers, as it is an environment they already know and trust.

What are some tips businesses can use to master localisation when entering a new market, and what are the specific aspects to look out for in the Baltic countries? 

Philipp Nieland: Consumer habits and preferences dictate the success of a global merchant. It’s important to remember that there is no ‘one shoe fits all’ when it comes to entering new fast-growing and emerging markets, as each region has its own intricacies and nuances. Especially, when it comes to local payment methods PSPs want to offer and merchants want to use. If businesses are looking to enter a new market, it is vital to obtain market-specific knowledge, such as what are the preferred payment methods for a particular region. 

The same goes for the Baltics. To be successful in these markets, you cannot rely on only accepting card payments. The preference to pay through online banking outweighs all of the other options in the Baltics and determines if a PSP or a global merchant will be successful in easily accessing the market. 

Nikulipe has recently launched its banklinq solution. How does this new product tackle the challenges previously discussed, and how can it maximize acceptance and conversion? 

Frank Breuss: The currently available online banking payment solutions in the Baltics were not suitable for most international merchants. No LPM is comparable to, for example, iDeal in the Netherlands or GiroPay in Germany. So far, a merchant needed five to six solutions – one for each major bank – to be able to cover a relevant number of consumers.


This limited the consumer choice when it came to shopping on international platforms. banklinq is covering not only the large banks but also smaller, as well as challenger banks in one solution. Consumers in Lithuania, Latvia and Estonia can now easily pay with the payment method they already know and trust. 

By offering a familiar way to complete payments – through online banking – banklinq allows global merchants to reach more consumers and increase conversion. Also, it’s an additional attractive LPM for PSPs to offer to their merchant portfolio.

Can you share with our readers any future developments? What’s in the pipeline for Nikulipe in the coming months?

Frank Breuss: banklinq covering the Baltic region is just a start. There are many more emerging markets that are in desperate need of LPM solutions that would be tailored to the needs of international merchants and their PSPs.

Philipp Nieland: We will continue to focus on fast-growing and emerging markets, the ones that current payment players often neglect. We are both experienced and agile enough to capture those opportunities and to allow merchants to reach new consumers they could not reach before. Either by creating new LPMs or by connecting existing LPMs in markets that were not accessible for merchants so far.

About Frank Breuss

Frank Breuss, CEO and Co-founder of Nikulipe, is an entrepreneur and business leader with 20+ years of solid experience in the global payments industry. His expertise in emerging markets drives him to innovate existing business solutions, challenging current market standards, and setting new benchmarks towards fast, secure, and transparent cross-border payments. Frank has contributed to the growth of several successful teams and businesses, including PPRO, Banking Circle, and Amazon.

About Philipp Nieland

Phillip Nieland, co-founder, and the main Nikulipe’s investor, is a serial entrepreneur and a founder of the unicorn PPRO that is also a fintech company – with a wealth of expertise in the market, information and network technologies in the global payments industry. At the age of 19, Philipp already co-founded a local Internet service provider (1996). While still in university, Philipp founded his own consultancy firm and ran the company as the CEO before he entered the fintech market in 2006.

About Nikulipe

Nikulipe (Swahili for ‘I pay you’) is a fintech company that facilitates emerging and fast-growing market access for fintechs, payment service providers, and their merchants by streamlining cross-border payment solutions. By providing consolidated access to locally preferred payment methods or creating payment solutions where there are none, Nikulipe unlocks access to new markets.

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Keywords: local payment method, account-to-account payment, financial inclusion, cross-border payments, payment methods
Categories: Payments & Commerce
Countries: Estonia, Latvia, Lithuania
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Payments & Commerce

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