In 2020, online shopping couldn't be more accessible. Hop on your favorite e-commerce website, fill up your virtual cart, enter your credit card and in two or three days, a little brown box shows up at your doorstep.
Back in the 90s, online shopping wasn't quite so easy. I made my first online purchases using perhaps the first widespread alternative payment method (APM), PayPal. PayPal came about as early e-commerce sites struggled to figure out how to accept payments over the World Wide Web. As e-commerce grew and gained the trust of consumers, credit card payments via credit card gateways soon became the de facto method of online payment.
In the United States, credit cards dominate online payments. This is because consumers have access to credit and understand the credit card system, which is secure and very reliable. Credit cards have the added benefit of consumer protections such as the credit card dispute system, add-on warranties and seamless integration with 99% of e-commerce websites, in my experience.
Internationally, the landscape of payments is much more diverse. While in the U.S. a few APMs still show up in online shopping carts, in countries like China and Mexico, APMs are much more common and diverse.
Bank Payments
U.S. consumers are vaguely familiar with ACH, but rarely see ACH in an online checkout experience. ACH stands for automated clearing house. It is a way of using your bank account number and routing number to make online payments. It works like a digital check. In Mexico, paying via the SPEI network is quite common. Making a payment using SPEI means printing off a unique number given out during one's checkout flow, then taking that unique number to a specific bank and completing the payment at the bank.
Cash Payments
Using cash to pay for an online purchase is unheard of for U.S. customers. However, in Mexico, an online shopping experience may look quite different. Imagine checking out in an online shopping cart, printing a QR code or barcode, and taking that code to a 7-Eleven or Oxxo convenience store and making your payment with cash. This type of hybrid online and in-person payment experience is also common in Central America.
Wallets And Redirect Payments
In the early days of the internet, we all became familiar with the experience of making an online payment with a wallet. PayPal is an example of an online wallet. A wallet is normally connected to one or more bank accounts or credit cards. When paying with a wallet, the consumer is redirected to a payment page hosted by the provider to complete the checkout. These redirects ensure that a secure connection is made for payment.
Making payments in the Asia Pacific means using a variety of wallets and APMs. These include technologies like Alipay, WeChat Pay or Union Pay. Even when making payments with the Union Pay credit card system, a consumer can expect a unique checkout experience that requires additional authentication in the form of a text message.
Adding Alternative Payments
Integrating alternative payments into your online shopping cart is really a two-step process. First, you need to apply for a payment account with the APM provider. In some cases, this process is very simple and quick. It involves filling out an online form and being issued a set of API credentials. More often then not, the process is much more akin to applying for a credit card processing account. Because finding and getting approved for processing via APM is quite complicated, you might consider working with a payment reseller that has international payments experience.
The second step to adding APMs as a payment method to one's shopping cart is building out the integration. For the most part, international alternative payment methods are not supported out-of-the-box by shopping cart providers. The integration usually needs to be custom-built. One has the choice to build direct integrations to each APM individually or to build to a payment orchestration provider. There is special technology middleware that allows you to integrate one solution that provides many connectors to a variety of alternative payments around the world.
As a business grows, so must its ability to manage and understand the chaos payments. Scaling one's business internationally means knowing and understanding the landscape of payment options and building technical capacity in order to integrate and manage many different types of alternative payment methods.
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May 08, 2020 at 06:29PM
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International Alternative Payments - Forbes
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