Preferences vary with regard to how people pay from region to region and country to country. These preferences are influenced by many things: attitude toward debt, access to technology, purchasing habits and tradition are just a few. Honouring the internet comfort level and payments culture of target markets will result in higher sales and will often lower costs. • Increase confidence of potential buyers • Increase number of available buyers, eg. people who don’t have or don’t use credit cards • Demonstrate sensitivity to local habits of foreign countries • Some local payment methods are more secure or less expensive than credit cards While cost analysis is beneficial, avoid being penny wise / pound foolish. If accepting local currency payments of a particular type will lift sales by 4% to 24%, then don’t worry if the payments will cost a little more to clear.
Direct Marketing Theatre; 7 international payment strategies of highly successful international marketers tfma 2012 95 2003 format
7 Payment Strategies forInternational Direct Mail Success Brian Weekes VP International Development PacNet Services Ltd
The Global Economy TodayThe UK is a small part of the global economy Emerging economies will add 100 million new middle class consumers per year over the next 5 years.
1 / Accept Payment in Local Currency• Increase response by 25% to 200% depending on market and demographic.• International buyers simply don’t have access to Pound Sterling payment devices.• A Pound Sterling Bank Draft will cost an international customer £5.00 or more to purchase plus the bank’s exchange fees.
2 / Set Your Price • What do local businesses charge for similar products and services? • Even exchange, higher or lower margin? • Consult indexing tools (IKEA Billy Bookcase or)
The Big Mac Index• The Economist’s Big Mac Index can serve as a rough guide to local pricing.• Or look at the local price of Ikea’s ubiquitous Billy bookcase.
Price of a Burger• The price of a burger or a bookcase won’t directly relate to the price of your product but it serves as an indicator of what the market will bear.• Americans pay US$3.58• The Swiss pay US$6.30• South Africans pay US$2.46
3 / Build in a Buffer • In mildly volatile climates, consider padding your price by 2% to give yourself a little insurance. • Currency strengthens, you win. • Currency weakens, you’re protected (for a little bit)
4/ Understand Payment Preferences in each Country Cash or Credit? Credit card is the favourite online payment method for most countries, but mail order payment preferences vary from country to country – and generation to generation.
Local Currency Payment optionsMail Order:2. Cheques3. Postal Orders4. Credit / Debit Cards5. Direct Debit6. Bank Transfer7. Cash8. CODTelephone: 1. Credit / Debit Card 2. Direct Debit 3. COD
Country Cheques Cards Bank Direct Debit TransfersGermany 0.6% 14.5% 36.2% 48.3%Netherlands 0% 37.8% 31.8% 26.5%Italy 12.5% 39% 32.1% 14.9%France 23.8% 40% 17% 19%Belgium 0.5% 41% 42.8 11.4U.K. 10.7% 48.4% 21% 19.9%U.S.A 28.6% 54.5% 5.7% 10.4%Canada 14.8% 65.3% 11.9% 8.1%Switzerland 0.1% 38.2% 56.4% 3.8% Non-cash Retail Payment Preferences Relative importance of payment instruments in % of total transactions Source Bank for International Settlements
5/ Convey pricing as simply as possibleSimple order form can be used for multiple countries: Easy to lasersubscription form for CANADACheques accepted in Canadian dollars Mailed toCanadian mailbox
Localized designappropriate for keymarkets.Priced in Indian Rupees.Range of paymentoptions requires space.Cheque, direct debit andcredit cards accepted.Mailed to an Indianmailbox.
Multi-national Order Form offers prices in three currencies simultaneously.USD is the default for miscellaneous countries. If you must price in USD for amulti-national campaign, be sure to request USD drawn on a US bank.
Offer more payment options where appropriate • For mail order, balance simplicity of the order form with choice for your customer. • Accept cheques where cheques are used. Additionally, offer credit/debit card plus DD options where popular.
6/ Efficient International Payment Implementation• DIY – (as done by Amazon) – Opening your own international bank accounts and negotiating local merchant service agreements may significantly lower cost of bank fees, but requires large upfront investment, infrastructure and accounting resources.• Payment Service Provider – Contract with payment processor with international capabilities for optimum convenience and speed of turnaround. Services offered vary from company to company. Lowest upfront costs.
7 / Be Aware• Cheque validity periods differ from country to country – cash your cheques in a timely manner.• Depending on your product, be aware of fraud. Some countries have a better reputation than others.• Consult with local banks or a payments expert at your Payment Service Provider for guidance.