While plastic, via credit and debit cards, dominate electronic transaction methods in the West, that isn't the case in global markets. This webinar explains how merchants can develop a strategy to evaluate and implement some of the 200+ alternative payment methods used throughout the world.
2. How to Implement AP?
Technology Options
What Next?
Q&A & Contact
Information
Introduction
Who is Interested in Payments?
Why Alternative Payments?
Alternative Payments Overview
Type of Alternative Payments
Direct Debits
eWallets
Real Time Bank Transfers
Prepaid Cards
Cash Transfers
Agenda
3. Who is ROI Payments & Why a Boot Camp Series?
Who is interested in payments?
The end result?
Introduction
4. How important is it to support
alternative payments in international
markets?
5. The Alternative payments market is set to grow
by 13% by 2015
230 Alternative payment schemes in operation
across the globe today
€ 165B in global ecommerce transactions = 22%
of total volume
Regionally, Germany, the Netherlands, and
AsiaPac are significant while neighboring
countries, such as France, have very low
adoption
By 2015, alternative payments will outpace the
use of cards, especially in developing
economies such as Brazil and India
Global Trends Toward Alternative Payments
6. With 230+ payment types, how do you pick the right one for your business?
We will now review payment types by popularity over the next few slides.
Global Trends Toward Alternative Payments
7. Alternative Payments by Type: Bank Transfers
Real time Bank Transfers
Benefit: Customers money is present in bank account at time of transaction
Weakness: Requires hosting or re-direction
Example Schemes:
Offline Credit
Benefit: Transfer confirmed before goods processed, resulting in no chargeback risk
Weakness: Time to receive funds can be longer
Example Schemes:
Direct Debit
Benefit: Easy to use and natural customer retention
Weakness: Scheduled payments so a higher risk of chargebacks and a delay for settlement
Example Schemes:
8. Alternative Payments by Type: Others
eWallets
Benefit: Customers money is present in account at time of transaction
Weakness: Often relies on re-direct and can carry a high(er) transaction fee
Example Schemes:
Paper Based
Benefit: No chargeback risk
Weakness: Time lag, lower order completion, and usually higher cost
Example Schemes:
Mobile
Benefit: Easy of Use
Weakness: Time lag in payment, can be very high cost (as much as 50%)
Example Schemes:
9. Drivers for Alternative Payments Growth
Technology:
“Push” – New alternative payment vendors are driving innovation and providing
customers with a faster and more efficient means for paying for goods and
services
“Pull”- New types of goods and services in the digital realm: games, eBooks,
virtual items require foster, more flexible ways to pay
New Generation of Shoppers:
18-30 year olds are much more likely to be receptive to alternative
payment methods; Older (65+ shoppers) are the least likely
Profitability of Choice:
10. Alternative Payments in Developing Economies
China and India are expected to soar in the coming decades and are some have an incredibly high adoption rate for
alternative payments:
China
AliPay accounts for Billions in payments alone
Online economy is growing by 22% annually
India
Real time bank transfers dominate the payments
landscape
Online economy is growing by 40% annually
*Also of note is Brazil whose online growth rate is close to 18%
11. In Which Verticals are Alternative Payments Taking Off?
High Penetration:
Gaming & Gambling- eWallets very prevalent
Adult- driven by personal privacy
Video Games- micro transactions and younger customers
Digital Content- driven by direct debit in many markets
Medium Penetration
Global eCommerce- PayPal drives a lot of this growth
Telcoms- emerging geographies pair telco with payments
Ticketing, entertainment, and Services
Low Penetration
Airlines & Travel- higher tickets lead more toward traditional card types
Local and regional retail, government, education and utilities- traction dependent on geographies
15. Alternative Payments Capabilities vs: Credit Cards
Depends on the type of alternative payment, the following are GENERAL
characteristics:
Bank driven payments are often less expensive than credit cards
Often uses a 3-party or closed loop network
Requires a gateway that is capable of handling various transaction flows
Less risk of chargeback, particularly in the use of real-time bank transfers
Some schemes may have time lag in settlement
17. Implementation Notes to Consider when Implementing AP
May need to set up EU (or other local) entity and/or bank
account
Option to use aggregation/eWallet options to enable multiple
alternative payment methods
Fees may be higher on the transactions, but simplification of entity/corporate side and
time to market benefits may outweigh the costs
Technically, many of these schemes rely on a redirect or a
hosted payment page
Reconciliation considerations as each scheme may
have a different settlement amount
18. Sample Plan to Expand into Alternative Payments
Start-up Fee & Monthly Gateway Fees: Can range from $100
set-up to $2,500 and monthly fees from $25-$200.
Transaction Fees: vary by scheme and implementation
method
Count on 4-8% for aggregation model (no local entity)
<1% for some locally acquired options
Typical Implementation Schedule: 2-4 weeks (assuming support
for multi-currency already exists)
Teams involved: marketing, finance, and IT
19. So What Next?
Research what markets your company is looking to tackle to
see if alternative payments make sense strategically
Find a partner who can help you drive mass adoption amongst
your customer base and assist you in implementing the right
technology/gateway
Test, test, and test again: be sure your conversion rates reflect
the work that has gone into your implementation