Mobile might be gaining popularity as a way to access online services, but that doesn’t mean that buying goods and services on mobile isn’t sometimes cumbersome. Small screens, smaller keyboards and confusing input options can make it hard on a shopper. Add to that the frustration of potentially having to enter credit card information repeatedly – all those numbers to punch in with fingers that seem to be getting fatter with every touch of the screen – and it’s no surprise that mobile commerce should strike many as leaving something to be desired.
Enter the digital wallet, an increasingly popular way for consumers to pay for goods and services. Users first save their payment details with a digital wallet provider. After that, checkouts from merchants that accept that particular wallet become effortless and secure. Every merchant integrating with that digital wallet automatically receives all the consumer payment details it needs to process transactions quickly and effectively.
Merchants: Zero In On What’s Important
The digital wallet is playing a significant role for online businesses eyeing global expansion, according to Braintree’s 2018 Global Payments Report, which Braintree has released in conjunction with Euromonitor. By assessing the level of penetration and usage of various alternative payment methods within key countries around the world, the report delivers valuable insights to businesses that are currently operating in those markets and looking to expand.
One takeaway from the report is this: To capitalize on global mobile payments, merchants must first decide which regions are most important to their businesses. In fact, according to Albert Drouart, Braintree’s director of market strategy and payment partners, you’ll be best off reviewing and optimizing customer experiences for the regions in which you already do business. Then you should take a mobile-first approach as you expand to new regions.
“Mobile drives the same types of pressures globally, so it’s all about providing a simple, low-friction, personalized payment experience that converts and establishes a long-standing relationship with customers,” Drouart said.
“Growing markets like India, Brazil, Asia Pacific and the Middle East all have strong mobile consumer bases with a desire for the same types of experiences that are common in more ‘developed’ markets like the U.S. and Europe,” he said. “A best-in-class mobile-first experience is likely going to be beneficial no matter where you want to sell.”
Five Key Regional Takeaways For Merchants
Europe as a whole is seeing moderate growth as compared to other regions of the world. That said, it’s imperative that merchants understand the significant geographical split between Eastern Europe and Western Europe when it comes to digital payments.
With increasing access to next-generation broadband, high smartphone usage, tech-savvy consumers and a proliferation of online merchants, Eastern Europe presents enormous opportunities for merchants seeking to integrate digital wallets. Western Europe, on the other hand, boasts a highly diverse and more mature payment landscape. Overall, digital wallets are expected to become more attractive to European consumers.
Here in North America, digital wallets are primed for takeoff, yet some interesting regional peculiarities emerge in both the U.S. and Canada. In Canada, the report found, small to medium-sized businesses are still hesitant to invest heavily in digital commerce, resulting in growth that’s limited primarily to large businesses for the foreseeable future. In the U.S., which is slightly behind its northern neighbor in terms of the dissemination of newer card technology, digital wallet acceptance is growing and will represent a tremendous opportunity.
Also notable in North America is the high social media penetration rate. Given pronounced regional trends, such as a lower level of consumer friction and an improved customer experience involving more partnerships, the number of payments taking place through social media is expected to increase substantially.
Compared to other global regions, the Middle East and Africa are relative laggards in digital payment. A robust cash culture persists in both places, especially in Sub-Saharan Africa – which also has the highest poverty rate in the world. Nevertheless, mobile purchases are growing in the region as consumers, on the whole, are slowly adapting to card-based payments.
Another valuable observation about developing regions is that they’re prime candidates for digital wallet adoption as they begin to develop (consider Estonia, which has gone some distance toward creating a digital society). With digital wallets, the complexities of a developing market can be minimized to the point where merchants can focus more on their services and products and less on payments.
Latin America, despite 26.9 percent growth in mobile purchases in 2017, for its part needs to overcome several challenges. A cash-first culture remains tenacious there, too – and combined with sometimes low-quality internet access, a limited card-acceptance infrastructure and concerns about fraud, this region may be slower to adopt digital wallets. According to the report, however, given sufficient education of the public, trust in digital payment can take root.
On the other side of the coin, the Asia-Pacific market is experiencing tremendous growth (65.1 percent in 2017) in mobile purchases. But while urban areas benefit from booming digital infrastructure investment, rural areas are significantly behind. Overall, despite massive progress, this region requires proper education about financial literacy and payment options if digital payment is to thrive.
Meeting Consumers Where They Happen To Be
Regardless of region, trust, seamlessness and relevance are all key.
Drouart believes the onus is on merchants to meet consumers where they are, presenting them with experiences informed by local norms and expectations. “Trust is established first by being as local and relevant to buyers as possible when presenting a payment option,” he said. “This goes for both local businesses serving local buyers and for businesses serving cross-border buyers.”
Once merchants establish trust, Drouart said, they should ensure that “happy paths” are easily accessible for honest customers – while protecting the payment process from bad actors.
“This starts at the point of sale and extends all the way to how you handle refunds and disputes,” he said.
For example, Smart Payment Buttons, a feature of PayPal Checkout, intuitively present customers with the most relevant payment methods at checkout. In a post-purchase situation, Drouart added, merchants should make sure they provide details about how consumers can seek more information about their purchases and set up paths to resolve problems.
“Once a bad experience happens, you may lose the opportunity to establish a relationship again,” he said.
For the merchant, global payments shouldn’t be a mystery. Armed with data and with a solid understanding of your buyers, you should be able to develop a plan to drive revenue with little impact on your company or its processes. Add digital wallets to the equation, and you can significantly demystify global payments. While cash may continue to dominate in some regions for a while, the data points to the fact that mobile is the emergent way in which most people will interact with online services and buy online goods in the future. Mobile will be the primary platform going forward. All that remains is to make it work as seamlessly as possible.
Mark Stone worked in information technology for many years before deciding to make a career out of writing about it. He lives in Canada.
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