Five payment strategies to enter emerging markets

Five payment strategies to enter emerging markets

Thunes recently hosted a webinar with The Paypers on how merchants and Payment Service Providers (PSPs) can focus their payment strategies to venture into emerging markets.

Our guest speakers—Pedro Bennasar, Head of Payments at French resale fashion unicorn Vestiaire Collective; Gary Clarke, Senior Vice President at Latin America’s leading PSP PagSeguro; and Elie Bertha, Head of Product at Thunes—shared practical insights from different corners of the payments business. 

From globalising an eCommerce platform to expanding payment services and connecting businesses to alternative payment methods (APMs) worldwide, their experiences shed light on navigating the complexities and accessing new revenue opportunities. 

Here are some highlights:

1: Survey your target market’s payment landscape

Customer payment habits are evolving fast, transitioning from traditional cash and card transactions to a growing list of alternative payment methods. It’s vital to understand the popular methods in your target market, including mobile wallets, QR codes, direct bank transfers/debit, prepaid cards, vouchers, Buy Now Pay Later and other options.

Success depends on smoothly integrating dominant local payment methods within the broader region and, crucially, in each specific country. In Southeast Asia, for example, what works well in Singapore doesn’t guarantee the same results in the Philippines or Vietnam. Other must-haves: custom user interfaces for diverse payment methods, robust data management and agility for changing market trends.

2: Assess and prioritise your payment needs: Interoperability, scalability, cost and settlement speed

It is crucial to ensure the reliability and scalability of your payment solution. For example, if your target is the gig economy, technical scalability will be paramount for efficiently handling a high volume of payments, particularly at smaller ticket sizes.

Prioritising compliance and security measures is not only a regulatory necessity but also a strategic business imperative for your business, contributing to customer trust, brand reputation and overall resilience.

Another vital topic is cross-border settlement management. To successfully expand into new regions, the capability to process payments and facilitate settlements in multiple currencies rapidly and seamlessly is essential, all while minimising the impact of foreign exchange (FX) volatility.

Lastly, determining the required level of customer support in the local language is imperative. This factor can make or break your market entry.

3: Survey the competition to crystallise your approach

Survey the competition and learn what payment methods they do and don’t integrate; you may find a competitive edge. In-depth local market research can yield significant benefits; merchants should thoroughly analyse their audience and collaborate closely with local PSPs. 

Don’t neglect internal buy-in from your tech and product teams, as this will ensure timely project delivery. 

4: Talk to local PSPs and partners: Understand who will provide the best support

When entering a vast region like Latin America with its diverse payment landscape, local expertise is essential for overcoming language barriers and providing tailored advice. Ensure your local partner can navigate regulations and compliance in different markets, especially in the face of changing legislation. They must also have robust security measures and fraud prevention mechanisms for local payment methods.

Look beyond payment processing; for example, assess a partner’s ability to contribute to brand awareness and offer local marketing promotions. In some cases, a partner with strong ties to central banks can prove helpful.

5: Visualise what success looks like 

Define your strategy from the off. As a merchant, carefully assess the importance of going local and adopting domestic payment methods. Make sure that when considering cross-border payments and acceptance, you don’t exclude specific local payment methods and miss revenue opportunities. If having a local presence is crucial, you can establish a local entity in the region or collaborate with a reputable partner.

Watch our webinar here to learn more from the experts.

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