Winning Payment Strategies forBRIC NationsHow to Boost Conversion Rates in Brazil, Russia, India, and China               ...
Table of Contents1  Executive Summary ..................................................................... 3   1.1      F...
1     Executive Summary      The "BRIC" countries are some of the worlds fastest growing and potentially largest      econ...
and credit cards are popular payment methods in the brick and mortar world, but not all      are available for cross-borde...
2   The Rising Stars: BRIC Markets    In the ever-growing complexity of today’s eCommerce world, organizations are facing ...
3   Brazil: Craving for Credit    Home to large agricultural, mining, manufacturing, and service industries, Brazil is the...
3.1   Many Brazilian credit cards are closed to cross-border      transactions          •    Debit and credit cards: with ...
ATM, or in person at a local bank. This has the advantage of consumers not               having to share sensitive data on...
4   Russia: Cards are the Alternative Form of Payment    Since the era of the Soviet Union, Russia has evolved from a cent...
Total annual B2C eCommerce sales were estimated to have been around USD 5 billion at      the end of 2010. This number is ...
Even though this does not seem to be a favorable eCommerce environment, the numberof online stores is continuously growing...
Some of the more innovative Russian banks have also started to offer ePayment services      at their ATMs as well as mobil...
5   India: Waiting for the Giant to Awake    India was originally a predominantly agrarian economy with widespread poverty...
Travel-related products are the largest category purchased online, enjoying an 81%      market share. Most popular travel ...
Overview of the main payment methods:          •    Cash on delivery: India has a large cash-based economy, so not surpris...
5.3   Localization is key      There are several barriers to selling online and accepting ePayments in India. First of all...
6   China: Poised to Become Largest eCommerce Market    Since the late 1970s, the People’s Republic of China has evolved f...
6.1   eWallets dominate online payment segment      The Chinese payment market has been very complex, with a large number ...
the online gaming and travel industry, being the business partner for many airlines         and online gaming platforms.  ...
6.2   Local partners are crucial to enter China      It is vital for a foreign merchant trying to enter the Chinese market...
7   Similarities and Differences among BRIC Countries    The strong economic growth of the BRIC countries since 2001 has i...
8     How Outsourcing FX Services Helps you Focus on your      Core Business      The rapid spread of the Internet and tak...
Winning Payment Strategies for BRIC Nations   Page 23 of 29
9   Case Study: Valve    When you give smart talented people the freedom to create without fear of failure,    amazing thi...
•    Profound knowledge of local markets and culturally preferred payment methods    •    Guidance on constantly evolving ...
10   Case Study: Despegar     Founded in 1999, Despegar has grown into the leading one-stop-shop online travel     agency ...
Martin Rastellino, COO of Despegar, says: “GlobalCollect combines a world-class payment technology with a strongly committ...
11   About GlobalCollect     GlobalCollect is the worlds premier Payment Service Provider of local e-payment     solutions...
What is more, GlobalCollect has profound BRIC experience - including extensiveknowledge of local market requirements, cust...
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Globalcollect on winning payment strategies for bric nations

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Dec 2011 - The so-called BRIC countries are among the world's fastest growing and potentially largest economies. They belong to the Top 10 countries globally in terms of population and GDP and combined make up more than 40% of the world’s population. When it comes to eCommerce and online payment adoption, BRIC countries boast 50% year-on-year growth figures so they offer tremendous potential.

Tap into BRIC growth potential but beware of tripwires
Online payment strategies need to be tackled on a country-by-country basis and emerging markets like the BRIC nations are no different. On the contrary, as this paper shows, they present additional challenges and differences in:

■Cultural habits and local payment preferences
■Internet penetration and consumer acceptance of online shopping
■Banking and legal requirements
eCommerce merchants who plan to expand their business into BRIC markets have to beware of these challenges. Overall, the differences outnumber the similarities and the “tripwires of doing business” are both country- and industry-specific, so one strategy will not “fit all”. Read also testimonials from Valve and Despegar to see how GlobalCollect consulted them on implementing a winning BRIC payment strategy

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Globalcollect on winning payment strategies for bric nations

  1. 1. Winning Payment Strategies forBRIC NationsHow to Boost Conversion Rates in Brazil, Russia, India, and China Co-authored by
  2. 2. Table of Contents1  Executive Summary ..................................................................... 3  1.1  Four promising markets, four different best-practice strategies...................3  1.2  Tripwires or trampoline to growth? ...................................................................4 2  The Rising Stars: BRIC Markets..................................................... 5 3  Brazil: Craving for Credit.............................................................. 6  3.1  Many Brazilian credit cards are closed to cross-border transactions .........7  3.2  Establishing a local entity is advisable............................................................8 4  Russia: Cards are the Alternative Form of Payment ................. 9  4.1  Cash is king ......................................................................................................10  4.2  Regulation makes cross-border money transfers difficult ..........................12 5  India: Waiting for the Giant to Awake ..................................... 13  5.1  Online payment methods are not yet established ......................................14  5.2  Regulation limits the use of eWallets .............................................................15  5.3  Localization is key ...........................................................................................16 6  China: Poised to Become Largest eCommerce Market........ 17  6.1  eWallets dominate online payment segment ..............................................18  6.2  Local partners are crucial to enter China .....................................................20 7  Similarities and Differences among BRIC Countries ............... 21 8  How Outsourcing FX Services Helps you Focus on your ........ 22 Core Business .................................................................................. 22  8.1  Three ways to tackle this challenge ..............................................................22  8.2  Determining rationale to outsource or process in-house............................22 9  Case Study: Valve...................................................................... 24 10  Case Study: Despegar ........................................................... 26 11  About GlobalCollect .............................................................. 28 © 2011 GlobalCollect and Innopay. All rights reserved.The works of authorship contained in this paper, including but not limited to all design, text andimages, are owned, except as otherwise expressly stated, by Global Collect Services B.V., and maynot be copied, reproduced, transmitted, displayed, distributed, sublicensed, altered for subsequentuse or otherwise used in whole or in part in any manner without the prior written consent of GlobalCollect Services B.V.. Global Collect Services B.V. shall not be held liable for any damages incurredas a result of using information contained in this publication.Winning Payment Strategies for BRIC Nations Page 2 of 29
  3. 3. 1 Executive Summary The "BRIC" countries are some of the worlds fastest growing and potentially largest economies. They all currently rank among the Top-10 countries in terms of both population and GDP. Together, they make up more than 40% of the world’s population. The BRIC countries currently fall into the category of low- to middle income countries. However, if the anticipated high growth is actually realized, it is not hard to imagine that the sheer size of these countries will propel them to be among the most powerful global economies. For years, Brazil, Russia, India, and China have often been regarded as a homogenous group, despite the differences regarding the extent to which eCommerce has developed in each of these countries. Overall, the differences outnumber the similarities. Like other markets, BRIC countries require a localized approach: offering pricing in domestic currencies, check-out pages in local languages, and culturally preferred payment methods are key elements of a successful eCommerce strategy which will help you overcome country-specific challenges. Source: CIA World Factbook, comScore, eBit Empresa, Fabernovel, IAMAI, CNNIC, Analysys International1.1 Four promising markets, four different best-practice strategies Brazil: Craving for credit In Brazil, online shopping is in its early stage but ahead of other Latin American countries. Despite the popularity of the Internet (e.g. for communication), online shopping and payments continue to fall short of expectations. Overall online spending totaled BRL 14.8 billion (USD 8.5 billion) in 2010, a 40% increase over the previous year. Forrester Research estimates that the Brazilian market will reach USD 22.0 billion in 2016. Electronics, household appliances, and books are among the most popular items bought online. To date, many Brazilians still fully rely on cash to make payments. This preference is reflected in the high popularity of Boleto Bancário, which has a market share of around 15%. Debit Winning Payment Strategies for BRIC Nations Page 3 of 29
  4. 4. and credit cards are popular payment methods in the brick and mortar world, but not all are available for cross-border payments. Russia: Cards are an alternative form of payment In Russia, total B2C eCommerce sales have been forecast to reach around USD 7.0 billion by the end of 2011. This number is predicted to grow by 40% each year over the next five years as the obstacles described later in this paper are gradually overcome. Currently, Russians predominantly rely on cash for historical reasons as well as due to a still insufficiently developed interbank network. As a consequence, the online payment segment is dominated by eWallets, which transform cash into digital payments. The leading alternative payment processor and eWallet provider of Russian eMoney is QIWI, with a market share of about 40%, followed by Yandex and Webmoney. India: Waiting for the giant to awake With an Internet penetration of less than 9%, India has not yet obtained the critical mass to propel online shopping beyond the stage of a premature industry. While 80% of Internet users search for products online, only about 20% actually buy online. Travel- related products are the largest category purchased online with an 81% market share. The most popular travel items are train and airline tickets. India still has a large cash- based economy and not surprisingly, cash is the preferred payment method for the majority of the population. In order to tap into this clientele, it is critical to accept cash on delivery (COD). Nevertheless, the online payment industry has witnessed strong growth in recent years as more consumers are shifting from traditional methods (cash) to alternative methods. Due to local regulation by the Reserve Bank of India (RBI), eWallets like PayPal are still very much restricted. China: Poised to become the largest eCommerce market China has evolved from a closed and centrally planned economy to potentially becoming the largest eCommerce market worldwide. Internet use in China has been lagging behind but is quickly catching up now with a penetration rate of 36%, making it the world’s largest Internet population. When it comes to online shopping, the Alibaba company - the Chinese equivalent of eBay - is leading with a 75% market share. The company operates under the names of Taobao (domestic, P2P) and Alibaba (both domestic and international, B2C) with around 400 million users. While cash on delivery (COD) originally accounted for a large share of overall online shopping payments, it currently only holds a market share of around 5-10%.1.2 Tripwires or trampoline to growth? eCommerce merchants who plan to expand their business into one or more of the BRIC markets have to beware of the diverse challenges they will encounter. Even though there are similarities, differing cultural habits, government structures, business cultures, and an ever evolving array of banking and legal requirements present a set of unique hurdles. Merchants should also keep in mind that the “tripwires of doing business” are both country- and industry-specific. Winning Payment Strategies for BRIC Nations Page 4 of 29
  5. 5. 2 The Rising Stars: BRIC Markets In the ever-growing complexity of today’s eCommerce world, organizations are facing a number of challenges when it comes to realizing their ambitions to grow both their geographic footprint and potential customer base. A key success factor here is teaming up with the right business partners. In the case of your ePayment strategy, this would be a Payment Service Provider: taking on a consultative role as well as helping you plan, implement, and roll out a winning array of payment products. Online payment strategies need to be tackled on a country-by-country basis and emerging markets like the BRIC nations are no different. On the contrary, as this paper shows they present some additional challenges – well worthwhile though if you look at the potential. An excellent online shopping experience will turn sour when customers find out at the check-out point that they cannot pay with their preferred method, pricing is not in the local currency, or surcharges apply. At the end of the day, the critical difference between you and your competitors is not always about a better product or service offering but about customer experience and convenience. So to turn browsers into buyers, your payment process is key. While this is true for all markets, the BRIC countries present a special challenge as eCommerce development stages, buying behaviors, available payment products, and infrastructure status quo differ fundamentally. Think global, act local to seize opportunities The so-called BRIC countries all show up to 50% year-on-year growth figures in eCommerce and online payment adoption so they offer tremendous potential. That said, each BRIC country has its own intricacies and is rapidly developing a local payment culture combining best-of-breed and hybrid payment methods – so one strategy will not “fit all.” To seize opportunities in these markets and maximize check-out conversion rates, merchants need to offer local acquiring and alternative payments - the latter alone can increase conversion rates by up to 40%. Most of these alternative payments require a local legal entity and local bank account, adding a tremendous workload to your operations, accounting, and legal departments. The added value of an experienced Payment Service Provider An experienced payment service provider (PSP) with local know-how and regional offices staffed with native speaker industry experts can help merchants to identify and overcome the various local challenges. Next to consulting on how to set up local entities, a full service PSP connected to local payment methods as well as financial networks and offering fraud screening tools can help reconcile and repatriate funds. Choosing a payment service provider which is right for you from the beginning is crucial – not only to help you tackle country- and industry-specific challenges but also to grow with you as your eCommerce strategy evolves and markets mature. As explained in depth in this paper, going it alone or working with a simple payment processor or gateway solution will put a tremendous strain on your overhead and there are many tripwires along the way – in most cases, outsourcing is by far the best solution as it empowers you to focus on your core business. Winning Payment Strategies for BRIC Nations Page 5 of 29
  6. 6. 3 Brazil: Craving for Credit Home to large agricultural, mining, manufacturing, and service industries, Brazil is the leading economy in Latin America. With a GDP of USD 2.2 trillion (PPP) and a population over 190 million people, Brazil ranks as the 7th largest economy and 5th most populated country in the world (CIA World Factbook). The GDP per capita is USD 10,800 per year. Thanks to the strong growth and high interest rates boasted by its robust export sector, Brazil has become an attractive destination for foreign investors. Due to the considerable capital inflow and rapid appreciation of the Brazilian Real (BRL), the government has responded by raising taxes on certain foreign investments in recent years. In 2010, there were more than 50 million Internet users in Brazil, a figure that is growing by 20% a year. Internet cafés, also known as Lan houses (31%) and home Internet (27%) constitute the main points of Internet access, while other access points include the work place or a friend’s house. More and more, cell phones also gain traction to go online (comScore). Most Internet users utilize the www for communication purposes (83%) and see it as a leisure time activity (68%). Online games, instant messaging, and social networks are very popular. In Brazil, Orkut is used by more than 75% of Internet users, thus surpassing Facebook. Americanas, Submarino, and Netshoes are the main eCommerce websites, followed by BuscaPé (comScore). For online peer-to-peer transactions, Latin America also has its own platform; where the US has eBay, Latin America has MercadoLibre. Despite Internet popularity, online shopping and ePayments have been lagging behind. People raise security concerns as one reason or are simply unfamiliar with how to shop online. The lack of home Internet access has further stalled eCommerce adoption in Brazil. According to eBit, there were 23 million Brazilians shopping online making 40 million unique purchases in 2010. The total online spending amounted to BRL 14.8 billion (USD 8.5 billion) in 2010, an increase of 40% compared to the previous year. For 2011, eBit expects a growth of 30% to BRL 20 billion (USD 11.6). Forrester Research estimates the market to hit USD 22.0 billion by 2016. The average spending increased by 11% from BRL 335 (USD 195) in 2009 to BRL 373 (USD 217) in 2010. Electronics, household appliances, and books are among the most popular items bought online. Source: eBit Informação (www.ebitempresa.com.br) Winning Payment Strategies for BRIC Nations Page 6 of 29
  7. 7. 3.1 Many Brazilian credit cards are closed to cross-border transactions • Debit and credit cards: with a total of 374 million cards (with a population of 190 million), debit and credit cards are popular payment methods, each having an approximately 33% offline market share. Visa (43%) and MasterCard (32%) are the most popular methods to pay online, while the Brazilian credit card Hipercard, owned by Itaú Unibanco, is only used by 1% of online shoppers. Accepting major international card brands thus makes it possible to reach a crucial mass of Brazilian eShoppers. That said, there are some challenges related to the fact that a large number of Brazilian credit cards are not enabled for cross-border transactions. As a consequence, a domestic acquirer is needed in order to accept most Brazilian credit cards. About 53% of online card transactions are based on installment credits (“parcelas”). This allows consumers to finance their purchases in multiple partial payments - a highly popular practice in Brazil. To be successful in this market “parcelas” are thus a prerequisite. Again, the only way to offer installment payments by credit card is through a local acquirer. Online Payment Preference Source: comScore, Brazil market share by share of transactions, Q2/10 to Q1/11 • Boleto Bancário: many Brazilians still rely fully on cash. This is also reflected in salary payments: 55% of all employees receive their salaries in cash, especially those in low-skilled jobs. This cash preference explains the high popularity of Boleto Bancário, which has a market share of over 13%. When paying online, a prefilled Boleto Bancário bank slip shows up which can be paid either via online banking, Winning Payment Strategies for BRIC Nations Page 7 of 29
  8. 8. ATM, or in person at a local bank. This has the advantage of consumers not having to share sensitive data online – a fact that helps reluctant ones to agree on making an online purchase after all. • MercadoPago: which is owned by the online auction platform MercadoLibre. MercadoPago’s online payment service enables shoppers to make payments at the MercadoLibre platform as well as on external websites. • Others: the rest of the online payment product spectrum is owned by a large variety of prepaid cards such as Aura, Astropay Card, or the PanAmericano MasterCard Prepaid Card.3.2 Establishing a local entity is advisable To conduct eCommerce business successfully in Brazil, it is strongly recommended that companies have a local presence, especially since repatriating funds from Brazil often requires merchants to pay up to 25% withholding tax. To fulfill this requirement, a registered entity is needed with a business address in Brazil. With this local entity, a local bank account can be opened; the person who is in charge of the local bank account must have a CPF (Cadastro de Pessoas Físicas). A side note: most of this information is written in Portuguese, the local language, making it even more cumbersome for foreign businesses to understand Brazilian regulations. Once you have set up a local entity, engaging an experienced payment service provider with an established financial network, a broad portfolio of local payment methods, and an offering of value-added services such as international fund management and foreign exchange services can enable you to enter this market successfully and help you repatriate funds to your home country. Winning Payment Strategies for BRIC Nations Page 8 of 29
  9. 9. 4 Russia: Cards are the Alternative Form of Payment Since the era of the Soviet Union, Russia has evolved from a centrally-planned to a more market-based economy. It is now one of the world’s largest exporters of commodities such as oil, natural gas, and steel while remaining, for the most part, a domestically- oriented economy. With a GDP of USD 2.2 trillion (PPP) and a population close to 140 million people, Russia is the 6th largest economy and 9th most populated country in the world (CIA World Factbook). With a GDP per capita of USD 15,900 per year, Russia is categorized as one of the middle-income countries. The Internet has been warmly embraced in Russia: its online population of approximately 60 million people represents a penetration rate of around 40% and thus constitutes one of the larger eCommerce markets. Over the coming years, this number is expected to grow by about 50% a year. As a general rule, Russian Internet users are young, well-educated, with above-average income, and residents of major cities. Other population segments, however, are quickly catching up. Russian Internet users are among the heaviest users of social networks, boasting one of the highest usage rates and spending the longest time periods online. The main Russian websites are the social network Vkontakte, search engine Yandex, and the webmail portal Mail.ru. While the Russian Internet was originally rather domestically-oriented, foreign websites such as Google or Facebook are steadily gaining ground (Alexa global ranking). This being said, the extensive Internet penetration is neither reflected in the number of online transactions nor the revenue involved in them. Around 35 million Internet users made online purchases during the first quarter of 2010. Urban online shoppers spend an average of USD 1,400 per year online, while people outside of big cities spend about half of that amount. Books, cosmetics, and home appliances are the main items purchased over the Internet (Fabernovel). Most demanded goods by Russian online shoppers Source: Fabernovel, 2010 Winning Payment Strategies for BRIC Nations Page 9 of 29
  10. 10. Total annual B2C eCommerce sales were estimated to have been around USD 5 billion at the end of 2010. This number is predicted to grow by 40% each year over the coming five years, as major obstacles are progressively overcome. There will be more and better equipped online stores, but country-specific payment options and logistics will remain an issue (Fabernovel). Source: InSales, early 20114.1 Cash is king When it comes to payments – both offline and online – Russians rely heavily on cash. Historically, Russians are skeptical of banks and, to date, there is no proper working interbank network. As a result, there is low bank penetration: only 5% of transactions involve the use of (bank) cards, the other staggering 95% are cash sales. Of all bank transactions, 91% are simply cash withdrawals, while only 9% involve making an actual payment. Furthermore, while there are about 130 million credit cards in Russia, only 3-5% of these can be used online (Russian Federal Bank). It therefore comes as no surprise that 45% of online orders are paid in cash on delivery (Fabernovel). Reason being that Russian Bank cards were designed for ATM and POS use only. As a result, most cards display no CVV2/CVC2 code so are not eCommerce enabled. Due to this small but important fact, online transaction refusal rates are significant. Another stumbling block is that shoppers are concerned about exposing their credit card data, be it online or offline. With 133 million cards issued but only an estimated 140,000 POS terminals across Russia, their usage is rather limited; and not being able to use cards in daily life hampers consumer acceptance. As a result, confidence in cards is relatively low, which explains why more than 90% of all credit card transactions in Russia are ATM cash withdrawals rather than POS payments. Many popular Western payment methods - such as PayPal - are not accepted in Russia while others - like Moneybookers - are still in their fledgling stages. The online payment segment is dominated by eWallets, which transform cash into a digital payment form. They consist of large networks of cash collecting POS terminals, agents, and franchises to execute payments and store money for later use. Typically, eWallets can be charged via a variety of methods such as cash, bank cards, vouchers, virtual currencies, and more. They can also be used for peer-to-peer payments, online payments, and cash withdrawals. Winning Payment Strategies for BRIC Nations Page 10 of 29
  11. 11. Even though this does not seem to be a favorable eCommerce environment, the numberof online stores is continuously growing - on average 34% year-on-year. Because eWallets,such as QIWI and other alternative payment products offer the ability to pay cash, theycurrently account for 75% of Russia’s overall payment flow. According to the PublicOpinion Foundation, 94% of all Russian Internet users make at least one purchase over aperiod of six months (spending an average of 550 Euros online), using one of theirpreferred local payment options.The main eWallets are: • QIWI: see below. • Yandex Money: a subsidiary of Yandex, the market leader in Russian online search engines. As of Q1 2011, Yandex Money accounted for more than 8 million eWallets, a growth of 50% compared to the previous year. • Webmoney: an electronic money and online payment system used by customers to exchange domestic currency into digital currency. Originally developed exclusively for Russian consumers, it is now used around the world in eight different currencies. • RBK Money: this web-based payment system, formerly known as Rupay, which is widespread in Ukraine and Russia, was launched in 2002. RBK Money offers services to over 250,000 Russian Internet users and 6,000 online shops. • Moneta.ru: both an eWallet provider and a PSP focusing on servicing smaller online retailers in Russia as well as providing payment services for the gaming and travel industry. QIWI eWallet at a glance: has its own 180,000 QIWI branded cash collection points with an annual turnover of USD 13 billion. QIWI Wallet charges 0% top-up commission for cash via QIWI terminals and currently has 45 million monthly users. • Availability: WEB, QIWI kiosks, mobile and social networks application, mobile commerce, SMS/USSD. • Core Services: direct top-up, eInvoicing, cash payment collection, alternative channels of payment. • Internal fraud protection systems include: limits, blacklists, timing, notification/confirmation by SMS/voice and CVV/CVC, 3-D Secure. • Geographic footprint: leading in Russia, Ukraine, Georgia, Belarus, Moldova, Kazakhstan. Also available in China, Vietnam, Malaysia, Bulgaria, Romania, Serbia, Tajikistan, Argentina, Colombia, Panama, South Africa, India, Latvia.Winning Payment Strategies for BRIC Nations Page 11 of 29
  12. 12. Some of the more innovative Russian banks have also started to offer ePayment services at their ATMs as well as mobile/online banking solutions. But as long as there is no unified system for online banking or easy interbank payments, the eCommerce market in Russia will remain fragmented. As a result of this, coupled with a fear of credit card fraud, many customers will still prefer offline payment methods in the foreseeable future. Source: Rumetrika, July 20104.2 Regulation makes cross-border money transfers difficult Russian legislation on online payments is completely different from the Western model. Payment service providers are confronted with regular changes in legislation and what may be common practice today may be forbidden tomorrow, making it a challenge to do business in Russia. Complexity in regulation is also prevalent in the online world. For example, foreign entities can make cross-border transactions out of the country, provided customs regulations are followed. Such transactions need to be accompanied by a “tax passport”, specifying the transaction details as only funds for imported products may be remitted. These foreign transactions can only be performed by banks which have a license for currency conversion and cross-border money transfers. Problems arise, however, when transactions are executed online, where it is harder to match payments with imported products. This means, in order to do business in Russia merchants need to have a local bank account. As non-resident bank accounts are not very common, this often implies the need to establish a local entity. On top of this, a merchant needs to have a “tax passport”. As outlined above, setting up a business account in Russia can be quite a challenge, but merchants will have to offer local payment methods if they want their eCommerce operations to succeed in this country. A payment service provider with a partner network of local acquirers, banks, and alternative payment products already in place can help meet the above requirements and give you access to the right mix of payment methods required to increase conversion rates. Winning Payment Strategies for BRIC Nations Page 12 of 29
  13. 13. 5 India: Waiting for the Giant to Awake India was originally a predominantly agrarian economy with widespread poverty, limited infrastructure and restricted access to basic education. However, since the 1990s, India has been developing into an open-market economy with economic liberalization, deregulation, privatization of state-owned businesses, and fewer controls on foreign trade and investment. Since these reforms, the economy has grown on average 7% per year. At the moment, India’s GDP of USD 4.1 trillion is the 4th largest in the world, while its population of 1.2 billion ranks 2nd in the world. The GDP per capita is USD 3,500 a year (CIA World Factbook). The Internet has not yet been widely adopted. With around 100 million Internet users and 60 million active users, the country has an Internet penetration of less than 9% (Internetworldstats). Still, it represents one of the world’s largest Internet markets and is expected to grow by 30% a year. Work places (40 million people), Internet cafés (30 million people), and private homes (11 million households) are the most important points of Internet access in India (Internet and Mobile Association of India, IAMAI). Also, mobile Internet use is quickly expanding, with more than 40 million mobile Internet users currently expected to grow to over 300 million by 2015 (Google India). The vast majority of Internet users are young men and students from the main cities. In recent years, the Internet has also been gaining ground in remote areas outside the cities. The core online activities are sending and receiving e-mails, searching for general information, and educational purposes; this is closely followed by visiting online music and video sites, instant messaging, and social networks (IAMAI). Online retail is still an underdeveloped market in India. While 80% of Internet users search for products online, only about 20% (17 million Internet users) actually buy online (Juxt Consult). The total eCommerce market is predicted to reach INR 46,520 crore (USD 9.5 bln) by the end of 2011. Being only INR 8,146 crore (USD 1.7 bln) in 2007, the market has witnessed strong growth with a CAGR of 55% over the last four years. In the coming years, the market is expected to grow by 32% per annum (IAMAI). * Financial Services were not calculated in the years prior to 2008. ** Estimated Figures. Source: IAMAI, report March 2011 (Figures in INR crore/Percentages indicate share of the overall market size) Winning Payment Strategies for BRIC Nations Page 13 of 29
  14. 14. Travel-related products are the largest category purchased online, enjoying an 81% market share. Most popular travel items are train tickets (83%) and airline tickets (58%). The main travel websites are Indian Railways (34% market share), MakeMyTrip (16%), and YatraOnline (14%) (Comscore, June 2011). eTailing only makes up about 6% of online spending. Most popular eTail items are cell phones (56%), computer hardware and consumer electronics (35%), and movie tickets (30%). Flipkart is the most popular online shopping website for retail products (Juxt Consult). Source: eBay/eBay India Census 2011 – India under a lens5.1 Online payment methods are not yet established Online payments do not yet constitute an established business practice in India. In a recent survey by the IAMAI, consumers were asked about their online spending habits and reasons not to buy online. About 50% of the respondents who did not buy online gave reasons related to lacking trust and limited availability of online payment methods; concerns ranged from privacy issues (25%) and lack of trust (15%) to unavailability of payment cards (10%). Nevertheless, the online payment industry has witnessed strong growth over recent years, as more consumers are shifting from traditional (cash) to alternative payment methods. While credit cards are the most preferred option, debit cards and net banking are also commonly used, each with an approximate 30% market share (Koncept Analytics). Another source indicates net banking as the most popular online payment product, preferred by over 40% of consumers. Winning Payment Strategies for BRIC Nations Page 14 of 29
  15. 15. Overview of the main payment methods: • Cash on delivery: India has a large cash-based economy, so not surprisingly cash payments are the preferred method for the majority of people. As a consequence, it is important to accept cash on delivery (COD) in order to reach Indian consumers. Some sources indicate that around 50% of online orders are paid by COD. Multiple solution logistics companies, such as Bluedart or Aramext, support this method. • Payment cards: India has low financial inclusion: over 40% of Indians in urban areas do not have a bank account, while this number rises to over 60% in rural areas. About 15% of the population own debit cards (180 million cards issued), and less than 2% have credit cards (18 million cards issued, a number that has been decreasing over the past years). Major international credit cards such as Visa, MasterCard, Diners Club, American Express, and JCB are commonly accepted online. However, dependent on the issuing bank, not all debit cards can be used online (Reserve Bank of India, RBI). Only debit cards issued by the larger banks, such as Axis, HDFC Bank, and ICICI, can be used online to pay. • Net banking: via net banking, or Internet bank payments, consumers may use their online banking interface to pay. The large majority of banks offer this service, making online payments possible for those without credit cards. In addition, consumers trust this method because it is linked to their personal bank. • Prepaid cards: this is a solution when other methods are not available or not trusted by consumers. However, these cards do not have a large distribution network. • Mobile payments: as mobile banking gains ground in India, it is also increasingly used for making online payments, typically for lower value items.5.2 Regulation limits the use of eWallets Due to local regulation by the Reserve Bank of India (RBI), eWallets like PayPal are very much restricted. New requirements were installed in November 2010, when the RBI found that online payment gateways not only facilitated online transactions, but also enabled Indian exporters to transfer funds abroad without repatriating them. Online payment gateways thus allowed Indians to receive income and transfer it abroad without paying income tax (RBI). To prevent this, the RBI imposed a number of new requirements. For example, under the new regulation banks can only offer repatriation of exports through payment gateways after carrying out extensive due diligence and opening a “nostro” account – an account in the name of the payment gateway with the sole purpose of collecting payments. Banks are also asked to report all account transactions to the RBI. Indian exporters are allowed to open online payment accounts, but the funds cannot be retained in such accounts for longer than seven days, after which they have to be transferred to the nostro account. Meanwhile, the outstanding balance in any online payment account (eWallet) cannot exceed USD 3,000. In any case, it remains the full responsibility of the online payment gateway to ensure that Indian exporters comply with the regulations. PayPal, among others, altered its policies to comply with the new regulation. To receive payments, users now need to link their PAN card (Indian tax account) to their PayPal account. In addition, they must indicate an Indian bank account to which the received funds can be automatically transferred. Making payments still requires a credit card (linked to the eWallet). Winning Payment Strategies for BRIC Nations Page 15 of 29
  16. 16. 5.3 Localization is key There are several barriers to selling online and accepting ePayments in India. First of all, eCommerce is not yet an established business activity in India, as Internet penetration is still low. Accordingly, people are not used to shopping online and do not trust this sales channel. Also, financial inclusion as well as credit- and debit card use is rather low - many Indians still strongly rely on cash. To overcome these challenges and satisfy local legislation, it is absolutely necessary to have a local presence. In addition, a website must offer a good online shopping experience suitable for the Indian market, meaning in the local language and featuring a product range customized to meet consumers’ needs. To overcome the lack of trust, merchants must also accommodate local payment methods, such as net banking or local debit cards. Furthermore, to reach consumers who do not trust online payments or do not even have a bank account, it is crucial to accept payment by cash on delivery. An experienced payment service provider with an established financial partner network and portfolio of alternative payment products already in place can help meet the above requirements and also provide consultation on local legislation. Winning Payment Strategies for BRIC Nations Page 16 of 29
  17. 17. 6 China: Poised to Become Largest eCommerce Market Since the late 1970s, the People’s Republic of China has evolved from a closed and centrally-planned economy to a more market-oriented one with a global focus. The restructuring has led to high growth with a more than tenfold increase in GDP since 1978. China is currently the most populated country in the world with a population of over 1.3 billion and the 2nd largest economy with a GDP of USD 10.1 trillion. The GDP per capita is USD 7,600 a year (CIA World Factbook). In terms of Internet use, China has been lagging behind but is quickly catching up. In 2010, the total number of Internet users amounted to 485 million, equaling a penetration rate of 36.3%, thereby making it the world’s largest Internet population (CNNIC). Around 190 million Internet users also shop online. Online shoppers are typically young and well- educated, live in urban areas, and have above average incomes. The Chinese strongly rely on local websites, making it difficult for companies like Google or Yahoo to gain ground in this country. In terms of use, Web portal QQ (Tencent), which reaches 65% of Internet users, and search engine Baidu, which reaches 60%, are the most popular websites. For online shopping, most Chinese turn to the Alibaba company - the local equivalent of eBay - which has an impressive eCommerce market share of 75%. The company operates under the names of Taobao (domestic, P2P) and Alibaba (both domestic and international, B2C), which together attract around 400 million users. Its main competitor is Tencent’s Paipai platform for P2P online shopping. As people have become more familiar with surfing the Internet and gained increased trust in online shopping in recent years, eCommerce is showing strong growth rates. While total eCommerce revenue (both B2C and C2C) amounted to USD 39 billion in 2009, this number is expected to grow to USD 95 billion by the end of 2011. Over subsequent years, eCommerce is expected to grow to USD 421 billion by 2015. An interesting trend concerns the fact that Chinese consumers are increasingly looking overseas to buy luxury goods or cosmetics online. Revenue from this channel is expected to double from USD 3.8 billion in 2011 to USD 7.6 billion by 2012. Transaction Value of China Online Retail 2008 H1-2011 H1 Note: 1 CNY = 0.1568 USD as of October 7, 2011 Source: Enfodesk © Analysys International www.eguan.cn www.enfodesk.com Winning Payment Strategies for BRIC Nations Page 17 of 29
  18. 18. 6.1 eWallets dominate online payment segment The Chinese payment market has been very complex, with a large number of banks lacking interconnection and collaboration. However, considerable progress has been made in recent years, including for example allowing someone with a Beijing bank card to use an ATM in another city. In the eCommerce arena, online payment systems have also improved, allowing clients from most banks to send and receive money to and from another bank. The vast majority of online payment transactions involve eWallets. Alipay (linked to the Alibaba platform) and Tenpay (linked to Tencent) have been the dominant market players in recent years. With the evolution of and improvement in Chinas online infrastructure, China’s eCommerce industry has developed rapidly over the last few years. China has shown strong growth in consumer power, and average online spending has kept pace by increasing significantly. This is where Alipay enters the picture: Alipay is Chinas leading third-party online payment solution, providing an easy, safe, and secure way for millions of individuals and businesses to make and receive Internet payments. As such, Alipay also offers a cross-border online payment solution for overseas partner merchants. At a glance: as of September 30, 2011, Alipay has a market share of over 48% (iResearch) and 600 million registered accounts with over 11 million transactions a day. Alipay provides payment solutions in China for more than 460,000 external merchants and is furthermore connected to more than 100 financial institutions, including 19 national banks, 45 regional banks, as well as Visa and MasterCard. The most important competitor of eWallets is China UnionPay (CUP). This national bankcard association is responsible for operating the unified inter-bank clearing and settlement system, as well as for developing the international acceptance network for the China UnionPay card. In total, there were over 1.9 billion cards issued in 2010, a growth of 12% over the previous year. The vast majority of them are debit cards (91%), but credit cards are catching up (Datamonitor). One important restriction is the normal limit placed on debit card spending of about CNY 3,000 (USD 500). To make a larger payment, for an airline ticket for example, consumers need to contact their bank. While cash on delivery originally accounted for a large share of online shopping payments, it currently only holds a market share of about 5-10%. Overview of the main payment methods: • Alipay: see above. • Tenpay: a subsidiary of Tencent, the largest competitor of Alipay, with over 70 million users and a market share of over 21%. Tencent owns QQ, China’s largest Internet portal with more than 300 million users, and PaiPai, China’s second largest online trading platform. Tenpay is the default payment method on QQ and PaiPai, together accounting for almost 60% of Tenpay’s payment volume. More than 200,000 webstores accept Tenpay. Overall, Tenpay has a strong position in Winning Payment Strategies for BRIC Nations Page 18 of 29
  19. 19. the online gaming and travel industry, being the business partner for many airlines and online gaming platforms. • China UnionPay (CUP): this national bankcard association, the most important competitor to eWallets in China, is responsible for operating the Chinese unified inter-bank clearing and settlement system, as well as for developing the international acceptance network for the China UnionPay card. CUP has a market share of 11% in the online payment market. International cards like Visa, MasterCard, and JCB are also used online but only account for less than 5% of card payments combined (as opposed to the 95% share of CUP). • Others: there are various other smaller players, together constituting a market share of around 15% regarding online payments, see below graph. Market Share of 3rd Party Online Payments in 2011/Q2Source: Enfodesk © Analysys International www.eguan.cn www.enfodesk.comSpecial items such as foreign brand high-end apparel, accessories, and cosmeticscontinue to enjoy a steady demand in China. Clothing, shoes, hats, and handbagsaccount for the largest proportion (22.8%) of all Chinese online retail transactions,followed by digital, communication and IT products, which account for 10% (iResearch).In addition to the above, cosmetics, home appliances, books, and audiovisual productsare also very popular eTail goods. Forecasts predict that traditional offline businesses willcontinue to enter the online retail arena in order to meet consumer demand for a one-stop shopping model and simultaneously allow them to expand their footprint and saleschannels beyond China.Winning Payment Strategies for BRIC Nations Page 19 of 29
  20. 20. 6.2 Local partners are crucial to enter China It is vital for a foreign merchant trying to enter the Chinese market to offer a localized product presentation. Thus, a webstore should feature local pricing and offer culturally preferred payment methods. Product- and check-out pages have to be in the local language. The latter is especially challenging due to multiple versions of the Chinese language. Setting up a local entity and complying with Chinese eCommerce regulations can be a complex and expensive process. Cross-border payments need to be linked to orders and repatriation of funds is limited to certain amounts – all of this puts a heavy burden on the back office workload. The main local payment methods have solved these issues for their international clients, and a PSP can further consult on opportunities of settling offshore. Alternatively, merchants can select an experienced payment service provider who has already established a financial network of acquirers, banks, and payment products; the beauty of this solution lies in the fact that all of the above is covered under one single contractual agreement as well as a single reporting system and financial flow. Winning Payment Strategies for BRIC Nations Page 20 of 29
  21. 21. 7 Similarities and Differences among BRIC Countries The strong economic growth of the BRIC countries since 2001 has increased incomes, and thus created a substantial middle class. These positive developments have, in turn, led to the emergence of a powerful consumer market in each BRIC country. Due to lower labor and production costs, many companies also consider the BRIC nations an attractive target for their foreign expansion strategy. Although the BRIC countries are still emerging eCommerce markets – albeit to varying degrees - they have the potential to become leading global economies over the coming years. And while many of them – again to varying degrees - still rely heavily on cash, local online payment systems are also on the rise. This being said, eCommerce merchants planning to expand their business into one or more of the BRIC markets have to be aware of the diverse challenges they will encounter. Despite the similarities, there are differing cultural habits, government structures, business cultures, and an ever evolving array of banking and legal requirements that present a set of unique hurdles. Merchants should also keep in mind that the “tripwires of doing business” are both country- and industry-specific. Expert assistance on online strategies for BRIC is strongly advised Merchants are well advised to solicit expert legal and tax services when developing their online selling strategies for BRIC. Country legislation and regulations keep changing, resulting in the need to have a different approach for each country, as well as native- speaker support, so a “one size fits all” approach will not work under these circumstances. Involving a partner with both local experience and representation is a must. The same applies to foreign exchange and repatriation services required to comply with BRIC government monetary policies. As a rule, repatriation in all BRIC currencies is difficult and may have tax implications. What all BRIC countries have in common is the similarity of being unique. They all need customized local payment strategies; a merchant’s webstore or portal has to be fully localized in terms of language, check-out processes and preferred payment methods. Additionally, eCommerce merchants need to understand that just offering international credit cards does not enable them to tap into the vast potential of BRIC markets. While credit card penetration is steadily growing, many cards are not enabled for online or cross-border purchases, or not trusted by end consumers. Thus, local payment methods and alternative products such as eWallets that enjoy high acceptance rates are key elements of a successful eCommerce payment strategy. With legal barriers and tax burdens up to 25%, every merchant needs to carefully consider if the timing of entering one or more of the BRIC markets is right. Industry-specific assessments regarding the state of development and consumer take-up rates are also mandatory – what applies to Travel-related services might be a completely different story for Online Gaming. Winning Payment Strategies for BRIC Nations Page 21 of 29
  22. 22. 8 How Outsourcing FX Services Helps you Focus on your Core Business The rapid spread of the Internet and take-up rates of online retail services in emerging markets have created significant new business opportunities but also many challenges. One of the greatest is to offer your online shoppers the convenience of paying with a locally preferred payment method and in the respective domestic currency. To optimize customers’ web experience and convert browsers into buyers, you need to price goods and services in local currencies - the positive effect is a significantly higher conversion rate. On the other hand, dealing in foreign currencies leads to increased administrative overhead and FX management costs, as well as high exposure to currency exchange risks.8.1 Three ways to tackle this challenge The first way to tackle this is to open a multi-currency account. The majority of corporate banks offer multi-currency bank accounts to allow for receipt of foreign currency flows. A multi-currency account is a bank account structure with a single account number which enables you to hold balances in different currencies and perform foreign exchange trades to hedge foreign currency flows back to a base currency. However, this banking product is virtually unknown in North America and the UK. The second possibility is to hold foreign currency bank accounts in local markets with local financial institutions. That said, this scenario should be limited to key currencies as every additional local bank account will require you to deal with local legislation, including the possible requirement of establishing a local entity or branch based on the domestic “Know Your Customer” (KYC) legislation. Operating local accounts will result in additional cash management fees and you will also potentially (for example in all BRIC markets) face the challenge of retrieving funds from an economically promising - yet difficult to operate in - country due to restricted domestic currency outflow, specific acquirer requirements, or governmental policies. In some cases, it may take up to a month to retrieve funds out of a country, resulting in high exposure to foreign currency exchange fluctuations. The third - and for most merchants best practice - is to outsource foreign exchange activities to a full service provider such as GlobalCollect. By determining the right mix of outsourced conversion services and remittance currencies, this solution offers you many benefits: among them competitive exchange rates and reduced FX management and administration costs due to simplified treasury management for businesses operating internationally. This ensures liquidity and provides operational efficiency while capturing FX margins and minimizing risks. Plus, should the requirement for additional settlement currencies arise - for example to fund local operations or pay suppliers in additional local currencies – a PSP like GlobalCollect can provide a customized FX solution to meet those future needs and offers funding in all major currencies.8.2 Determining rationale to outsource or process in-house Outsourcing currency conversion services, combined with a remittance currency set-up tailored to your needs, allows you as a merchant to focus on your core business activities and realize organizational savings. The benefits at a glance: Winning Payment Strategies for BRIC Nations Page 22 of 29
  23. 23. Winning Payment Strategies for BRIC Nations Page 23 of 29
  24. 24. 9 Case Study: Valve When you give smart talented people the freedom to create without fear of failure, amazing things happen. Valve has followed this philosophy since 1996, which led to producing award-winning games, leading-edge technologies, and the groundbreaking social entertainment platform Steam®. Valve’s success story began with Half-Life®, the first-person, sci-fi shooter game that won more than 50 “Game of the Year” and a few "Best Game Ever" awards. Being the worlds largest online gaming platform, Valve works with business partners to help them realize their global growth ambitions. For this reason, Valve also chose GlobalCollect: an international payment service provider offering among other things consultancy, a broad portfolio of payment methods, currency conversion, and localization of payment pages to ensure maximum conversion. Over the past four years, Valve has benefited from GlobalCollect’s extensive experience of worldwide payment processing as well as in-depth knowledge of alternative payment methods, cultural payment preferences, and the video gaming industry. So it was a logical choice to go with GlobalCollect as a PSP to help Valve tap into the huge potential of BRIC gaming markets. ePayments in BRIC: One size does not fit all When rolling out in Russia, online fraud was a real concern. By deciding to localize their approach by offering domestic alternative payment methods - which inherently have a lower fraud risk - and stepping up fraud prevention tools, Valve together with GlobalCollect successfully tackled the issue. Introducing pricing in Russian Rubles further boosted sales and thus revenues. GlobalCollect also advised on cultural payment preferences; historically, consumer confidence in Russian banks and financial institutions is low, so offering alternative products like eWallets is the best approach. When entering any of the BRIC countries, you will find out quickly that offering local payment methods and pricing in domestic currency is by far the best strategy because it simultaneously results in boosting sales and reducing fraud. A strategy GlobalCollect also advises Valve on in Brazil and China. Valve found GlobalCollect to be both a dedicated and knowledgeable partner, offering among other things: • A very stable infrastructure with great uptime thanks to its fully redundant platform • Outstanding customer service and response times • Unsurpassed and continually expanding portfolio of local payment methods Winning Payment Strategies for BRIC Nations Page 24 of 29
  25. 25. • Profound knowledge of local markets and culturally preferred payment methods • Guidance on constantly evolving legal requirements and banking regulations Since Valve feels that this partnership is built on trust and the confidence that GlobalCollect can accommodate their future growth ambitions, they have recently renewed their service contract.Winning Payment Strategies for BRIC Nations Page 25 of 29
  26. 26. 10 Case Study: Despegar Founded in 1999, Despegar has grown into the leading one-stop-shop online travel agency (OTA) in Latin America for leisure and corporate travel, offering access to more than 500 airlines, 70 car rental agencies, thousands of leisure packages, as well as up to 100,000 hotels worldwide via Hotels Despegar.com. Despegar currently operates 12 offices across Latin America to serve customers locally. When in Brazil, do as the Brazilians do Brazil, being one of the largest markets in Latin America with strong economic growth and a very eCommerce- oriented consumer base, is one of the key countries for Despegar’s continued success. As in other countries across the world, it is crucial to offer local payment methods in Brazil in order to boost conversion rates. For eCommerce merchants, offering access to alternative payment methods is of growing importance. However, different acquirers have different capabilities so it is important to have contractual relations with all of them. Challenges of entering the Brazilian market and how to overcome them While Brazil is the most mature eCommerce market in Latin America, it is also highly regulated, creating an additional layer of complexity in an already fragmented payment landscape. The need to offer localized payment methods, accommodate installment payments, and have efficient information systems for the reconciliation process in place add to the challenges. Due to the nature of its business, Despegar also has to be able to confirm transactions immediately since flights, hotels, rental cars, etc. are being booked in real time. Finally, due to the high transaction volume, they need an automated reporting and reconciliation tool. As a rule, eCommerce markets in the US or Europe are easier to enter as there already is an established infrastructure to support international businesses. In Latin America, eCommerce is growing but still at a much earlier stage. As a consequence, credit card rejections are much higher than in more mature markets and fraud charge backs a real issue. Despegar partnered with GlobalCollect in August 2010 to help standardize its ePayments process and streamline operations across the different countries in which Despegar operates. Since then, GlobalCollect’s involvement has gone from counseling on local payment preferences to building relationships with local partners to helping implement customized solutions. Winning Payment Strategies for BRIC Nations Page 26 of 29
  27. 27. Martin Rastellino, COO of Despegar, says: “GlobalCollect combines a world-class payment technology with a strongly committed and knowledgeable team. We use them as our main payment service provider and they have been key in helping Despegar to improve the customer payment experience as well as to streamline the fulfillment process. In summary, partnering with GlobalCollect has been highly beneficial for Despegar and being able to outsource a number of steps – for example meeting local regulations - empowers us to focus on our core business. We highly recommend GlobalCollect and look forward to expanding our partnership to broaden our range of payment methods and to tap into further markets.”Winning Payment Strategies for BRIC Nations Page 27 of 29
  28. 28. 11 About GlobalCollect GlobalCollect is the worlds premier Payment Service Provider of local e-payment solutions for international Customer Not-Present (CNP) channels. A pioneer of global payment processing with more than 15 years of experience as a full service provider, we have a proven track record in helping our merchants realize their global ambitions and expand their eCommerce activities across the world. GlobalCollect’s knowledge of the international payment landscape and local payment preferences uniquely qualifies it to advise your company on how to increase online conversion rates, expand distribution channels, and streamline back office matching and reconciliation processes. GlobalCollect’s single-interface online payment platform offers you access to an unrivalled portfolio of payment methods in almost 200 countries and 170 currencies. The latest platform upgrade empowers you as a merchant to process payment transactions in 30 languages, including all major European languages, simplified Chinese, Japanese, Hindi, Arabic, Farsi, Russian, Hebrew, and many more. Plus, GlobalCollect is bank independent and has the largest network of acquirers, banks, and alternative payment providers worldwide. Since GlobalCollect is bank independent, it can offer you the flexibility of working with a combination of many banks. We have partnered with leading international financial institutions like First Data, AIB, BNP, HSBC, Wells Fargo, WorldPay, Barclays, Elavon, Euroline, and others. These relationships, coupled with our status as a market leader, enable us to offer the best possible rates for card and alternative payment processing - economies of scale that we pass on to you as a merchant. Our scalable Fraud Screening Service features a range of integrated fraud reduction tools from renowned partners to maximize transaction safety prior to payment authorization. These include customized business rules, online account validation, neural networks to detect suspicious patterns, IP geolocation data to determine the real-world location of a web visitor, pre-check for fraudulent use of credit cards, and more. Companies that choose GlobalCollect get much more than a payment processor. Because of our 15+-year history as a full service provider in the international eCommerce marketplace, we are able to offer you global consultancy – complete with information about local regulations, area customs, and cultural payment preferences. Merchant funding is currently available in up to 14 currencies. We can help your company to increase its international market share significantly by enabling you to provide your customers and distributors with the ability to pay with their preferred method and in their local currency by: • International and local credit and • Cash and bill payments debit cards • eWallets • Direct debits • Prepaid methods • Real-time bank transfers • Virtual bank accounts • Bank transfers • Checks GlobalCollect has been trusted by leading merchants in many verticals, including Travel, Retail, Gaming, Software, Financial Services, Publishing, Streaming Media, Social Networking, Ticketing, Direct Selling, Telecommunications, and Online Portals. Winning Payment Strategies for BRIC Nations Page 28 of 29
  29. 29. What is more, GlobalCollect has profound BRIC experience - including extensiveknowledge of local market requirements, customer payment preferences, andrepatriation issues - as well as the legal entities in place to help you tap into thesemarkets.Headquartered in the Netherlands to serve the EMEA region, GlobalCollect also hasoffices in North and Latin America, and the Asia Pacific region to consult clients interestedin targeting BRIC markets locally.GlobalCollect EMEA GlobalCollect North AmericaPlanetenweg 43-59 Three Embarcadero Center, Suite #29002132 HM Hoofddorp San Francisco, CA 94111The Netherlands United Statestel: +31 (0) 23 567 1500 tel: +1 (415) 975 0969info@globalcollect.com info@globalcollectusa.comGlobalCollect APAC GlobalCollect Latin America Avenida Alicia Moreau de Justo 846,8 Temasek Boulevard 2nd Floor, Office 11#21-04 Suntec Tower Three, 1107AAR Buenos Aires038988, Singapore Argentinatel: + (65) 6408 8222 tel: +54 (11) 5272 1189info@globalcollectapac.com info@globalcollectlatam.com  Note: This document does not purport to be a complete statement of the approaches or steps, which may varyaccording to individual factors and circumstances, necessary for a business to accomplish any particular businessgoal. This document is provided for informational purposes only; its means are solely to provide helpful information tothe user. This document is not a recommendation of any particular approach and should not be relied upon toaddress or solve any particular matter. Any data not explicitly sourced is based upon Innopays analysis.Winning Payment Strategies for BRIC Nations Page 29 of 29

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