Beating payments fraud in 2020
Let’s take a look at a typical day of global commerce…
It is 8am in Guadalajara and Anna is shopping online.
She orders a pair of trainers from Decathlon and prints off a voucher, which she will pay at her local OXXO convenience store.
Meanwhile in Rio it is 10am and João has just ordered an iPhone from Magazineluiza.com; he will pay for this in installments over the next five months.
In Jakarta it is already 8pm and Aditya is listening to music, keeping his Spotify subscription up to date via bank transfer.
And finally, it is 9pm in Shanghai and Li Na is working late. To keep herself organized she upgrades to Evernote Premium from her smartphone, paying with Alipay.
Successful global businesses understand the importance of catering to customers’ needs - no matter where they are in the world.
Global businesses like Evernote, Spotify and Decathlon, understand the importance of catering to customers’ needs, fitting seamlessly around their daily lives, habits and cultures - no matter where they are in the world.
And it is well worth the effort to get it right. Today, businesses have the opportunity to reach literally billions of new customers around the world.
As an example, let’s take a look at four exciting markets: Brazil, Mexico, Southeast Asia and China:
Brazil is the largest market in Latin America, accounting for 40% of the region’s total retail ecommerce sales. And, despite overall economic difficulties, its ecommerce market is alive and well, expected to surpass $27 billion by 2018, while maintaining a healthy annual growth of 11% until 2019.
Brazilian shoppers favor credit cards, but will rarely pay for anything outright, and 80% of all online transactions are made in installments. Boleto Bancário, which is a printable voucher, is also popular, accounting for 15% of online payments in Brazil.
"Investing in innovation in payment technology is fundamental."
It is also important for businesses to keep mobile payments in mind to fully capitalize on the potential in the market, as Netshoes CFO explains:
“Having a mobile strategy has become crucial for retail companies. For Netshoes it is a clear focus. Mobile represents more than 50% of the traffic to our website and 30% of conversions. This is why investing in innovation in payment technology is fundamental” Leonardo Dib, CFO at Netshoes.
Mexico is growing at an exponential rate. Its population is the second largest in Latin America, and ecommerce has reached a tipping point, with online retail sales expected to reach $6.7 billion by 2019. Mexico also boasts the highest percentage of mobile online traffic in the region, and has a mobile penetration of 32%, outpacing both Argentina and Brazil.
Mexicans are keen on cash. 40% of online purchases are made via a convenience store such as OXXO, where shoppers print off a voucher and pay with cash at an OXXO store. International brands like Decathlon significantly extended their reach into the market by supporting cash-based methods.
"Thanks to Adyen's advanced technology and data insights, we are able to bypass legacy systems and drive optimization every step of the way."
However, Mexico is not without its challenges. Layers of complexity make it a difficult market to navigate, and it is crucial to have a payments partner with local expertise.
"Mexico can be an extremely complicated marketplace, with a myriad of complex legislations and configuration requirements to contend with. But with Adyen all of this is taken care of. Thanks to its advanced technology and data insights, we are able to bypass legacy systems and drive optimization every step of the way. As a result our overall conversions are up by 8%.” Anko van der Werff, Chief Revenue Officer, Aeromexico.
Home to over 600 million people, Southeast Asia is on the verge of an ecommerce boom, with online retail sales projected to grow by as much as 25% annually. Furthermore, with 250 million smartphone users, the region is experiencing a tremendous rate of digital adoption.
Spotify is driving conversions in Indonesia by letting customers pay via bank transfer.
There is however a stark contrast between developed and developing countries in the region; Indonesia and Thailand mainly pay in cash, whereas it is common for Singaporeans to have more than one credit card.
We see that successful businesses adapt to their customers’ preferences, not the other way around. Spotify, for example, is driving conversion rates in Indonesia by letting customers pay via bank transfer.
Despite reports that overall economic growth is slowing, China’s ecommerce market is holding strong, and is forecasted to climb to a dizzying $1trillion by 2020. This is particularly the case in the world of luxury retail, where Chinese shoppers will soon be responsible for purchasing over half of the world’s luxury products.
Things are also looking good in the mass market; Internet penetration has reached 700 million and it is predicted that 15% of the population will make cross-border ecommerce purchases by the end of 2016.
The Cambridge Satchel Company saw conversions climb by 15% after supporting Alipay for both online and mobile payments.
Crucially international credit cards account for a small proportion of online purchases, and local methods such as UnionPay, Alipay and WeChat Pay are a must-have for the region. For example: Luxury bag retailer The Cambridge Satchel Company saw conversions climb by 15% after supporting Alipay for both online and mobile payments.
And here’s another exciting emerging trend: China is spearheading social commerce in a big way. Social platform WeChat has successfully integrated itself into the daily lives of over 300 million users, supporting functionalities like social networking, file sharing and pier-to-pier money transfers, to name but a few. And, by processing payments, it is closing the loop on an ecosystem that allows Chinese shoppers to chat, browse and buy, all in one place. This makes shopping as easy as chatting to your friends.
There are many things to consider when expanding into a new market. But besides investing heavily in website localization, setting up operations on the ground and so on, it is worth taking the time to understand how your potential new shoppers might like to pay. Doing so will build loyalty, drive conversions and ultimately accelerate your global expansion.
To learn more about each of these markets, download our free country guides. Each one provides a market overview, insights into local payments landscapes and an in-depth look at key local payment methods, based on extensive on-the-ground knowledge.
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