I was recently introduced to the concept of a ‘vibecession’, which is an entertaining portmanteau describing the current global economic situation where there is much-encouraging news such as low unemployment, increased travel and restaurant spending, a record-breaking Black Friday and, simultaneously, negative indicators such as high inflation, low consumer sentiment, and uncertain geopolitics. We're not in a recession, but the vibes are definitely off.
Ultimately, no one can predict the course of the global economy. Therefore, payment platforms must diversify their services geographically to hedge against regional turmoil, remain agile and adjust to the ever-changing payments landscape, and work to make their products as efficient as possible. The same goes for merchants who should keep their eyes on the horizon and always be scouting for profitable green fields. Furthermore, merchants should be focused on optimising payments for the highest acceptance rates and lowest fees and creating a local shopping experience for global customers by offering relevant local payment methods and selling in the customer’s home currency. In an uncertain environment, it’s important to focus on what you can control.
If you consider brick-and-mortar retail, we went from specialised shops along Main Street (the cobbler, the butcher) to supermarkets and, finally, shopping malls representing the apex of the good old days. We're now in the shopping mall phase of ecommerce.
Ushered in by Amazon, but rapidly adopted across the market, marketplaces reduce the friction of exchange and increase consumption. Consumers are keen to find niche products that connect to them, and there are ever-more small producers requiring a way to present and sell their products. Beyond that, like the shopping mall, buyers can find everything they need in one place among a diverse assortment of retailers and products. This accounts for only B2C marketplaces. Equally exciting is the emergence of B2B marketplaces. Of note, marketplaces should endeavour to monetise their payments. This is a low-hanging fruit method of capturing incremental revenue. I suspect that ten years from now, no payment through a platform will go unmonetised.
Certainly many of my colleagues in payments believe that Moldova is the future. Just kidding, but not completely. The inclusion of Moldova is interesting as it shows the rapid growth of digital payments in the developing world. Sure, the major markets such as the EU, the US, and the UK will be leading the pack for years to come, but there is plenty of opportunity in the longtail of global payments. As global inequality decreases year after year, some geographies that were previously afterthoughts are moving into the limelight.
At Money2020 in Las Vegas, one of the most noticeable new inclusions in 2022 was a plethora of African and LATAM payment services. India has become a focus for many payment platforms and merchants alike. There are many other examples around the globe, each representing an opportunity. Progressive companies would heed well to take note.
Some merchants find multi-currency pricing complex, confusing, and risky. However, when they sell in one or only a few currencies, that complex, confusing, and risky burden is passed on to the consumer. Study after study shows that consumers prefer to pay in their local currency. No surprise there, common sense would dictate as such. Further, local payment methods are becoming increasingly popular among consumers around the world, yet the breadth and depth of options leave some merchants struggling to catch up. The key to resolving this is to find the right partners. Most acquirers and PSPs offer multi-currency pricing and an assortment of selected local payment methods. For full global coverage, merchants should consider a payment orchestration platform which aggregates global payment methods and provides merchants access without the need for time-consuming integrations.
Few people in payments find the phrase ‘PCI compliant’ exciting. Nonetheless, data security and compliance are mission-critical for anyone taking a payment. Beyond data security, merchants must also account for fraud and chargebacks. Once again, the best approach for merchants is to find the right partners and service providers. Most acquirers and PSPs offer a solid suite of tools for merchants. However, a middleware platform to route a transaction such as a gateway or payment orchestration platform has the most robust and configurable security, fraud, and chargeback ecosystem.
This editorial piece was first published in The Paypers' Cross-Border Payments and Ecommerce Report 2022–2023, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally.
Mark Bay is the Partner Manager for the Americas and APAC at CellPoint Digital, the leading enterprise payment orchestration platform. Previously he worked at Reach, a Merchant of Record cross-border payments solution, and Odin, Inc, an education payments platform. In his free time, Mark is a soccer fanatic and enjoys bicycle touring.
About CellPoint Digital
CellPoint Digital helps companies get the most value out of payments through payment orchestration. Our main solution is a powerful Payment Orchestration Platform that optimises digital payment transactions, from cards or alternative payment methods, and accelerates the deployment of new payment options. CellPoint Digital also provides an end-to-end digital commerce platform to airlines that masters the entire customer sales cycle and maximises the conversion rate.
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