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GlobalCollect winning payment strategies for BRIC countries part1
The document discusses payment strategies in the BRIC countries (Brazil, Russia, India, China), highlighting the unique challenges and opportunities in e-commerce for each market. It emphasizes the importance of local payment methods, regulations, and consumer behavior while providing insights into GDP per capita, e-commerce growth rates, and preferred payment methods. The document encourages businesses to adapt their strategies to align with local practices and regulatory environments for successful market entry.
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GlobalCollect winning payment strategies for BRIC countries part1
- 1. Payment strategies inBRIC Presented by: John Snoek John.snoek@globalcollect.com Product Manager GlobalCollect
- 2. BRIC Webinar Program •BRIC program • Helicopter view • In-depth per country in next webinars 2
- 3. Why? 3
- 4. 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 Mio Source: CIA – The World Factbook | Internetworldstats.com 4
- 5. Why? E-commerce volume inBillion USD 51,0 2009 E-commerce growth 2010 36,4 2008 2009 2009 2010 Brazil 39% 40% Russia 28% 35-38% India 30% 50% 8,9 6,2 6,7 4,9 China 39% 38-45% 2,3 3,5 Brazil Russia India China 5
- 6. Central themes BRIC: Appealingbut challenging Local alternatives up to 30% 6
- 7.
- 8. Similarities • Relatively closedeconomies | 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
- 9. Differences E-readiness (EIU -2010) Business Social and Legal Government Cons. & Bus. Country Overall score Connectivity environment cultural environment policy and vision Adoption Brazil 5.27 3.60 6.66 5.73 6.10 5.70 4.93 China 4.28 2.65 6.36 5.40 5.20 4.60 3.11 India 4.11 2.15 6.27 4.67 5.60 5.10 2.88 Russia 3.97 3.85 5.72 5.13 3.65 3.00 3.01 USA 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/capita Brazil 10,900 35% 17% 191 233 194 0.98 1.20 Russia 15,900 13% 26% 10 119 141 0.07 0.84 India 3,400 12% 24% 24 130 1189 0.02 0.11 China 7,400 17% 47% 199 1800 1337 0.14 1.29 US 46,400 136% 7% 686 488 310 2.21 1.57 Sources: creditcards.com | CIA factbook | 9
- 10. The playing field Settingup shop 1. Conversion Alternative payment 2. Local collection Resident bank account 3. Entity Admin and operational cost 4. Type of entity determines how to repatriate and how it is taxed • Local regulation of various industries (e.g. telco, travel) 5. Logistics 10
- 11. The playing field Taxesand repatriation • Tangible or intangible? • Customer = consumer or business? • VAT and withholding tax! Capture relevant data in checkout process Frequency of reporting and FX trade-off Operational impact + currency exposure vs. cash flow 11
- 12.
- 13. Brazil – Thepayers Country GDP/capita (USD) Debt % Savings Credit cards Debit cards Inhabitants cc/capita dc/capita Brazil 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
- 14. Brazil – Theplayers Cards Banks Alternatives 14
- 15. Brazil – Theplayers Market share online payment methods The star • Boletos – Bank scheme Cards 60% – push payment using barcode (via online banking, bank branch, check or ATM) Boletos – No consumer charge 30% Bank The contenders Others transfer 5% 5% • Mercadopago & Dineromail Continuous high growth in last 3 years – Various funding sources • Débito Online – Real-time banking 15
- 16. Brazil – Pickyour team Payment methods Digital Physical Travel Cards +++ +++ +++ Boletos ++ ++ +/― eWallets ++ ++ ++ Bank transfer + + ++ Mobile + ― ― Reversible? Moneyback refund Recurring Boletos No (except when paid by check) No No eWallets No Yes No (being developed) Bank transfer No Yes No Mobile Yes Depends on carrier Depends on carrier 16
- 17. Brazil – Thegameplan • 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
- 18. Russia Cards are thealternative MRC 2010 Semi-Annual Platinum Meeting and 10th Anniversary Celebration Austin, TX | October 1
- 19. Russia – Thepayers • 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
- 20. Russia – Theplayers Cards Banks Alternatives 20
- 21. Russia – Theplayers The 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 – 2009 The 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
- 22. Russia – Pickyour team • Preferred payment methods Digital Physical Travel Yandex +++ +/― +/― Webmoney +++ +/― +/― Qiwi ++ ― ―― Cards + + ++ Mobile +++ ― ― Reversible? Moneyback refund Recurring Yandex No No Yes Webmoney No Yes (time limit) Yes Qiwi No Yes (to wallet) No Mobile Yes Depends on carrier Depends on carrier 22
- 23. Russia – Thegameplan • 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
- 24. India “Waiting for thegiant to awake”
- 25. India – Thepayers • 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
- 26. India – Theplaying field • Logistics • Two-factor authentication for CNP • Success rates declined • Since Feb 2011 also for mobile/IVR transactions 26
- 27. India – Theplayers (Base: 7.5 million Active Internet Users who have made online purchases) Source: IAMAI: “Digital Commerce” – March 2011 27
- 28. India – Theplayers Market shares - IRCTC Reserve Bank of India (RBI) Other The star 14,8% Cards 24,5% • Indian banks via net banking Cash cards – ICICI, SBI, HDFC 16,9% Net The 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
- 29. India – Pickyour team Digital Physical Travel Cards ++ +++ +++ Netbanking +++ +++ +++ Cash cards ++ ― ―― Mobile +++ + + Reversible Moneyback Recurring (refund) Netbanking Yes Yes Yes Cash cards No Yes No Mobile Yes Depends on Depends on carrier carrier 29
- 30. India – Thegameplan • 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
- 31.
- 32. China – Thepayers • 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
- 33. China – Theplayers Cards Banks Alternatives 33
- 34. China – Theplayers The stars • China Union Pay (CUP) • Alipay The contenders • Tenpay (part of Tencent) • Mobile (202% YoY) 303 M mobile internet users 34
- 35. China – Pickyour team Digital Physical Travel Cards +++ +++ +++ Alipay +++ ++ ++ Tenpay ++ ++ ++ Mobile +++ ― ― Bank transfer + + + Reversible Moneyback Recurring (refund) Alipay No Yes (not realtime) No Tenpay No Yes No Mobile Yes Carrier dependent Carrier dependent Bank transfer No Yes No 35
- 36. China – Thegameplan • Alipay & Tenpay ► average increment of 30-40% • Mobile? • CNY repatriation not possible – Setting up entity in China cumbersome • Taxes approximately 30% 36
- 37.
- 38. Summary • Markets andproduct functionality less mature • Seek local tax and legal advice • Adapt checkout process capture necessary data • Reporting requirements • Website in local languages & customs 38
- 39. Summary vs. Match your business with FOPs that support your needs (e.g. pricing, refunds, recurring, delayed settlement) Trust, transparency and clarity 39
- 40.
- 41. Next Webinars “Brazil in-depth” http://www.youtube.com/watch?v=lp8d0Pb6UY By Daniel Belda 0 Product Manager GlobalCollect “Gaming in BRIC” To be announced next week 41
- 42. Perseverance http://www.youtube.com/watch?v=lp8d0Pb6UY 0 http://www.youtube.com/watch?v=lp8d0Pb6UY0 42