In markets where widespread internet access has long been a factor, ecommerce appears to be growing steadily.
But in other markets around the world, ecommerce is growing at an eye-popping rate. And this is something payment facilitators should be taking a look at, according to Steve Villegas, vice president, Partner Management, at PPRO.
PPRO enables alternative payment methods for merchants and other payment service providers.
According to the PPRO Payments & E-Commerce Report: High-Growth Markets 2018, published by the company earlier this year, emerging markets in Asia, Latin America and the Middle East are seeing their ecommerce markets grow at rates well into the double digits.
The highest-growth market listed in the report was Indonesia, where ecommerce is growing at 78% a year. According to the report, online sales in that country account for only 2.4% of retail sales. Internet penetration, on the other hand, is 40% – leaving plenty of room for ecommerce to grow.
Other rapidly growing markets in the report include Colombia, the Philippines, and Mexico, where ecommerce is growing at 59% a year.
While these markets may not be relevant for every payment facilitator, there are those who might find a natural fit, Villegas told PaymentFacilitator.
“The payment facilitator has to ask themselves, ‘do any of my clients or the services I’m supporting for merchants have consumers that are coming across a border or that are foreign nationals or tourists?’” Villegas said.
Those PFs that have a significant international component to their business should explore ways to make transactions easier for those end users, Villegas said. One way to do that is by supporting local payment methods from other countries.
He used foreign students as an example. It can be difficult for many of those students from other countries who are attending school in the U.S. to open bank accounts or get a credit card, he said. Many instead use methods such as prepaid cards.
But the growth of internet access enabled by mobile phone adoption in emerging markets means that many of those students have become accustomed to using their local payment methods online, as well as in traditional local retail locations. The biggest examples of these would be e-wallet payment methods WeChat Pay and Alipay, out of China.
“Local payment schemes modify to support ecommerce as well,” Villegas said. “So, it becomes a natural inclination for that consumer to pay how they’ve been paying and not try to change anything about how they’re doing it today.”
Payment facilitators who are supporting services used by international students might be able to grow their transaction volume by offering payment methods those students are used to using, Villegas said.
In the end, he said, “it’s not for every payment facilitator. But it is for everyone to consider.”