How to grow and prosper by supporting new payment methods
As the world emerges from the COVID-19 pandemic, retailers are looking for ways to bounce back and capitalize on pent-up demand for products and services.
With more people choosing to shop online than ever before, one obvious place to start is to make it easier for customers to buy. Unfortunately for retailers, the complexity of integrating and managing multiple emerging forms of payment is daunting at best, prohibitive at worst.
However, supporting preferred payment methods when checking out is critical for retailers to deliver the personalized, smooth, and fast ecommerce experiences that customers need. Let’s explore what retailers need to know.
The practical challenges of payments
At the macro level, the market is changing rapidly. The growth of e-commerce has reduced reliance on cash, and there is increased penetration of mobile devices and government encouragement for digital economies. Additionally, COVID-19 has led to a dramatic shift in consumer behavior.
These developments have given rise to a multitude of new types of payment. These include digital wallets, online payment apps, Buy It Now, Pay On Later (BNPL) solutions, QR code payments, money transfers, installment payments, and cryptocurrencies.
For merchants, these new payment methods represent both an opportunity and a challenge. While it is beneficial to give customers the choice of how they pay for a product or service, negotiating with multiple payment service providers (PSPs) can be time consuming as well as time consuming and adapting. to their different APIs and functionalities.
Take into account geographic complexity
With e-commerce knowing no borders and open banking initiatives providing favorable business conditions, many retailers are keen to expand into new markets. However, this requires in-depth, localized knowledge and technical and language skills that many do not have. This is because every country in the world has a unique payment landscape shaped by history, socio-economy, culture, and government regulation.
In India, Indonesia and Mexico, for example, many citizens are underbanked. They have to rely on alternative financial services such as money orders, check cashing services and payday loans to manage their finances and finance their purchases.
Likewise, underdeveloped countries whose financial systems lack basic payment processing capabilities have developed their own mobile payment solutions to compensate. Countries such as China, Germany, the United States and many others have also pioneered a multitude of mobile payment options. Put simply, payment methods today are often country specific and won’t necessarily work everywhere.
Don’t forget about compliance and regulation
In Europe, the EU General Data Protection Regulation requires local storage and management of citizen payment data. India and Brazil have similar regulations. Meeting these diverse requirements is a significant challenge and requires cloud-based edge compute capabilities that bring compute and storage closer to data sources.
Adding a new type of local payment isn’t as easy as activating it. Retailers entering a new market must ensure that they comply with local regulations governing the use and storage of citizen data. The risk of non-compliance, as some companies and payment networks have discovered without their knowledge, consists of large fines.
Cloud technology is the future
Amidst all of these challenges, there is good news. Now there is a way for retailers to quickly and efficiently integrate and scale new payment types without long lead times, localized knowledge, and costly development resources. Cloud-native payment orchestration (POP) platforms have emerged that replace existing payment infrastructures and systems and streamline and manage payment methods, services and transactions in one place.
Cloud POPs allow businesses to transparently and compliantly introduce local payment methods as soon as they enter the region or country. With a cloud-based POP, retailers get their own instances, which become a retailer’s individualized payment infrastructure and platform in the cloud. They can then take these Instances and, using cloud computing, create an Edge to their Instance in any region. These Edges provide significant benefits, ensuring that retailers can offer local payment methods that comply with regulations, secure customer data in the country while still providing payment methods that consumers demand. As a result, retailers can boost satisfaction and loyalty by supporting customers’ preferred payment methods upfront.
Yes, retailers face multiple challenges as they adapt to today’s payment methods. What they need is a cloud native POP solution that can integrate and manage all payment forms in one place and facilitate entry into new markets virtually with one click. There are Cloud POPs in the market today that can help do just that, and with a little research and adoption of cloud technology, they can embrace new payment methods and never miss an opportunity at the same time. checkout.
John Lunn is the founder and CEO of Gr4vy, the only cloud-native payment orchestration platform, modernizing the future of payment infrastructure around the world.