• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
GlobalCollect winning payment strategies for BRIC countries part1
 

GlobalCollect winning payment strategies for BRIC countries part1

on

  • 2,283 views

April 2011 - GlobalCollect has kicked off a series of webinars to take a closer look at the ins and outs of emerging markets by zooming in on the BRIC countries, as those boast double digit growth ...

April 2011 - GlobalCollect has kicked off a series of webinars to take a closer look at the ins and outs of emerging markets by zooming in on the BRIC countries, as those boast double digit growth numbers and thus offer tremendous potential for e-commerce opportunities. Both the presentation and video will give you the necessary background to devise a winning payment strategy in each BRIC country. Throughout the rest of the year, we will follow up with further webinars on emerging markets that will take an in-depth look at individual countries and specific verticals – so stay tuned via http://www.globalcollect.com/payment-service-provider/Knowledge-center/

Statistics

Views

Total Views
2,283
Views on SlideShare
2,282
Embed Views
1

Actions

Likes
3
Downloads
1
Comments
0

1 Embed 1

http://www.globalcollect.com 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    GlobalCollect winning payment strategies for BRIC countries part1 GlobalCollect winning payment strategies for BRIC countries part1 Presentation Transcript

    • Payment strategies in BRICPresented by:John SnoekJohn.snoek@globalcollect.comProduct ManagerGlobalCollect
    • BRIC Webinar Program• BRIC program• Helicopter view• In-depth per country in next webinars 2
    • Why? 3
    • Why? GDP/capita Internet Country Population Growth (%) (USD) Users 203 Mio 10,900 7.5% 76 Mio 139 Mio 15,900 3.8% 60 Mio 1,189 Mio 3,400 8.3% 81 Mio 1,337 Mio 7,400 10.3% 457 MioSource: CIA – The World Factbook | Internetworldstats.com 4
    • Why?E-commerce volume in Billion USD 51,0 2009 E-commerce growth 2010 36,4 2008  2009 2009  2010 Brazil 39% 40% Russia 28% 35-38% India 30% 50% 8,96,2 6,7 4,9 China 39% 38-45% 2,3 3,5Brazil Russia India China 5
    • Central themesBRIC: Appealing but challenging Local alternatives up to 30% 6
    • Framework 7
    • Similarities• Relatively closed economies | High E-com growth• Government/central banks dominant• E-com infrastructure less advanced• E-com barriers (e.g. legal, repatriation)• Higher fraud & chargeback rates (BRI) 8
    • DifferencesE-readiness (EIU - 2010) Business Social and Legal Government Cons. & Bus. Country Overall score Connectivity environment cultural environment policy and vision AdoptionBrazil 5.27 3.60 6.66 5.73 6.10 5.70 4.93China 4.28 2.65 6.36 5.40 5.20 4.60 3.11India 4.11 2.15 6.27 4.67 5.60 5.10 2.88Russia 3.97 3.85 5.72 5.13 3.65 3.00 3.01USA 8.41 7.35 7.85 9.00 8.70 9.25 8.60 Debt vs. savings Country GDP/capita (USD) Debt % Savings Credit cards Debit cards Inhabitants cc/capita dc/capitaBrazil 10,900 35% 17% 191 233 194 0.98 1.20Russia 15,900 13% 26% 10 119 141 0.07 0.84India 3,400 12% 24% 24 130 1189 0.02 0.11China 7,400 17% 47% 199 1800 1337 0.14 1.29US 46,400 136% 7% 686 488 310 2.21 1.57Sources: creditcards.com | CIA factbook | 9
    • The playing fieldSetting up shop1.  Conversion  Alternative payment 2. Local collection  Resident bank account3.  Entity  Admin and operational cost4. Type of entity determines how to repatriate and how it is taxed • Local regulation of various industries (e.g. telco, travel)5. Logistics 10
    • The playing fieldTaxes and repatriation• Tangible or intangible?• Customer = consumer or business?• VAT and withholding tax!Capture relevant data in checkout processFrequency of reporting and FX trade-offOperational impact + currency exposure vs. cash flow 11
    • Brazil“Craving for credit”
    • Brazil – The payers Country GDP/capita (USD) Debt % Savings Credit cards Debit cards Inhabitants cc/capita dc/capitaBrazil 10.900 35% 17% 191 233 194 0,98 1,20• Installments (“parcelas”)• Not everyone has a card or gets credit• Cash or cards• Relatively high # of chargebacks
    • Brazil – The players Cards Banks Alternatives 14
    • Brazil – The players Market share online payment methodsThe star• Boletos – Bank scheme Cards 60% – push payment using barcode (via online banking, bank branch, check or ATM) Boletos – No consumer charge 30% BankThe contenders Others transfer 5% 5%• Mercadopago & Dineromail Continuous high growth in last 3 years – Various funding sources• Débito Online – Real-time banking 15
    • Brazil – Pick your team Payment methods Digital Physical TravelCards +++ +++ +++Boletos ++ ++ +/―eWallets ++ ++ ++Bank transfer + + ++Mobile + ― ― Reversible? Moneyback refund RecurringBoletos No (except when paid by check) No NoeWallets No Yes No (being developed)Bank transfer No Yes NoMobile Yes Depends on carrier Depends on carrier 16
    • Brazil – The gameplan• Local BT + eWallets + Boletos = avg.  of 25-35%• Your industry requirements (tax!)• Local entity | Capturing consumer data• Use third party for FX and repatriation – BRL cannot be repatriated 17
    • RussiaCards are the alternative MRC 2010 Semi-Annual Platinum Meeting and 10th Anniversary Celebration Austin, TX | October 1
    • Russia – The payers• Cash lovers – Distrusting banks (1998)• Prefer eWallets for online as cash substitute• Majority online purchases = digital• Travel up 500%• Many cards not enabled for online• Cross-border payments growing 19
    • Russia – The players Cards Banks Alternatives 20
    • Russia – The playersThe stars Which online payment method do you prefer?• Yandex (eWallet) 70% – #1 FOP | RUB only 45% 38% 2008 2009• Webmoney (eWallet) 10% 12% 10% 8% 7% – #2 FOP | Multiple currencies (Webmoney Gold) Cash on E-money Credit card Bank transfer delivery Source: Romir – 2009The contender• Qiwi (ATM cash-in/eWallet) – Largest network of ATM‟s – 80 Million users a month – Funding source for eWallets, VISA prepaid or direct payment 21
    • Russia – Pick your team• Preferred payment methods Digital Physical TravelYandex +++ +/― +/―Webmoney +++ +/― +/―Qiwi ++ ― ――Cards + + ++Mobile +++ ― ― Reversible? Moneyback refund RecurringYandex No No YesWebmoney No Yes (time limit) YesQiwi No Yes (to wallet) NoMobile Yes Depends on carrier Depends on carrier 22
    • Russia – The gameplan• Yandex , Webmoney & Qiwi = average increment of 40-50% – For ATV < USD 500 – Travel = cards | Physical goods ► „see first then pay‟• Setup local entity + tax passport• Non-resident is possible, but: – Settlement up to 30 days – Not all local vendors/acquirers• Use third party for FX and repatriation – RUB cannot be repatriated 23
    • India“Waiting for the giant to awake”
    • India – The payers• Online buyers situated in metropolitan areas• 85% shoppers aged 15 – 35 2015: 65% of population aged 15 - 35 India consumer trends research: Mint in cooperation with Komli Media - 2009• Mobile penetration (600 Mio vs. 81 Mio Desktop) Source: IAMAI: “Digital Commerce” – March 2011 25
    • India – The playing field• Logistics• Two-factor authentication for CNP • Success rates declined • Since Feb 2011 also for mobile/IVR transactions 26
    • India – The players (Base: 7.5 million Active Internet Users who have made online purchases) Source: IAMAI: “Digital Commerce” – March 2011 27
    • India – The players Market shares - IRCTCReserve Bank of India (RBI) OtherThe star 14,8% Cards 24,5%• Indian banks via net banking Cash cards – ICICI, SBI, HDFC 16,9% NetThe contender banking 43,8%• Mobile (Obopay, Paymate, mChek) – carrier billing, linking card or bank account Source: IRCTC (Indian Railway) – accounts for 25-30% of online payments in India 28
    • India – Pick your team Digital Physical TravelCards ++ +++ +++Netbanking +++ +++ +++Cash cards ++ ― ――Mobile +++ + + Reversible Moneyback Recurring (refund)Netbanking Yes Yes YesCash cards No Yes NoMobile Yes Depends on Depends on carrier carrier 29
    • India – The gameplan• Net banking, Cash cards and mobile = average increment 20%• Mobile?• Local entity (Direct connections or via PSP)• Trust ► Checkout pages IRCTC (trusted)• Use third party for FX and repatriation – INR repatriation very limited 30
    • ChinaGrowing to the top
    • China – The payers• Cash (COD) first and foremost # of shoppers paying online 140 128 120 100 94• < 35 more prone to credit and 80 Millions buying online 60 40 20 0• Group shopping (19M users) December 2009 June 2010 Source: CNNIC “ Statistical Report on Internet Development in China “ | July 2010• Transaction limits per consumer 32
    • China – The players Cards Banks Alternatives 33
    • China – The playersThe stars• China Union Pay (CUP)• AlipayThe contenders• Tenpay (part of Tencent)• Mobile (202% YoY) 303 M mobile internet users 34
    • China – Pick your team Digital Physical TravelCards +++ +++ +++Alipay +++ ++ ++Tenpay ++ ++ ++Mobile +++ ― ―Bank transfer + + + Reversible Moneyback Recurring (refund)Alipay No Yes (not realtime) NoTenpay No Yes NoMobile Yes Carrier dependent Carrier dependentBank transfer No Yes No 35
    • China – The gameplan• Alipay & Tenpay ► average increment of 30-40%• Mobile?• CNY repatriation not possible – Setting up entity in China cumbersome• Taxes approximately 30% 36
    • Summary
    • Summary• Markets and product functionality less mature• Seek local tax and legal advice• Adapt checkout process  capture necessary data• Reporting requirements• Website in local languages & customs 38
    • Summary vs.Match your business with FOPs that support your needs(e.g. pricing, refunds, recurring, delayed settlement)Trust, transparency and clarity 39
    • Watch this space
    • Next Webinars“Brazil in-depth” http://www.youtube.com/watch?v=lp8d0Pb6UYBy Daniel Belda 0Product ManagerGlobalCollect“Gaming in BRIC”To be announced nextweek 41
    • Perseverance http://www.youtube.com/watch?v=lp8d0Pb6UY 0 http://www.youtube.com/watch?v=lp8d0Pb6UY0 42