Your Guide to International Payment Preferences by ZOOZ
Part 2 of 2
This two-part guide to help you understand how customers prefer to pay in some of the markets you may be targeting. If you’re considering expanding your reach into any of these regions, you should familiarize yourself with these payment methods and learn how you can easily integrate them into your cross-border offering.
In part one we discussed Europe and Latin America, here we will begin with Asia.
Asia: Payment methods are highly diverse across different countries of Asia.
China – China presents an enormous opportunity for e-commerce companies, with online sales hitting 5.16 trillion yuan (750 billion US dollars) in 2016. Alipay dominates online payments with a 54.1% share in China’s third-party online payment market in the fourth quarter of 2016. This platform has launched a mobile wallet application, offering online-to-offline payments. Another popular payment form is COD. UnionPay credit cards play a central payment role for merchants entering the Chinese market and are state-controlled, giving the company a monopoly in the country. Compared to Visa’s 50% and MasterCard’s 31% share of the global market, UnionPay only claims .5% outside of China. However, UnionPay was responsible for 37% of the $21.6tn global payments market in 2015, according to payments consultant RBR. Yet another highly successful payment paradigm in China is WeChat, a messaging platform which has monetized itself successfully by offering P2P payments. Finally, Payease is a PSP with an extensive banking network of 23 major banks in China.
India – Internet bank payments are the preferred choice in India, but prepaid cards and cash payments are also widely used. With the new regulation banning large summed cash payments, once can expect increased use of alternative methods. They use a wide variety of mobile payment services, including Paytm, ikaz, Mobi Kwik, Oxigen RuPay, and several others. 3D-Secure pages are popular in this country and payment methods not featuring authentication checks are less likely to be trusted.
Japan – Credit cards are the preferred choice in Japan. JCB is one of the main credit card companies in Japan with alliances with companies including Discover, UnionPay, American Express, and RuPay. However, many prefer to pay for online goods with cash at convenience stores called Konbinis, which constitute 20% of the market. Consumers can also pay for online purchases this way in Singapore and Thailand. Another popular payment system is UPI (Unified Payments Interface), which was developed by National Payments Corporation of India and facilitates real-time inter-bank interactions via a mobile platform. Local bank payment methods are also used extensively -- including Net Bank, which allows customers to make payments via a pop-up URL without entering a bank account number or payment amount.
Russia – The most popular e-commerce payment methods in Russia are online banking and bank cards, with 80% and 79% of Russian Internet users respectively using these methods regularly. 62% of Russian customers pay with e-wallets, using three main ePayment options – Yandex.Money, Visa Qiwi Wallet and WebMoney. Over 65,000 online stores accept Yandex.Money and about 22% percent of Russians regularly use it to make payments. Credit cards - including Visa, MasterCard, and American Express as well as a domestic card called Mir - are becoming increasingly popular with urban consumers due to their lower fees compared to those associated with e-wallets.
Africa – In Africa, the mobile payment market is more popular than banking services; in fact, m-payment subscribers already outnumber bank account holders. The largest and most widespread m-payment service is M-Pesa, a mobile phone-based money transfer, financing and microfinancing service. M-Pesa allows users to deposit, withdraw, transfer money and pay for goods and services. There are approximately 30 million M-Pesa users in 10 countries, and the system secured 6 billion transactions in 2016.
Australia – Nearly 70% of Australians use the BPAY electronic bill payment platform for online purchases and other payments. Like PayPal, BPAY enables users to make payments via their bank account or debit card.
North America: the North American market largely prefers credit cards
United States – 65% of all online payments in the United States are via credit and debit card, with eWallets like PayPal, Google Wallet and Apple Pay dominating 15% of the online payments pie. Bank transfers, COD and other alternate payment methods cover the remaining 15%. Despite the country’s strong credit card inclination, eWallets are on the rise. These are popular especially among millennials, and their relative share in online payments is projected to increase significantly in coming years as mobile device based online sales become better established. Out of available eWallet services in the States, PayPal is, by far, the most popular.
Canada – While card payments take up roughly two thirds of online sales in the US, they dominate the Canadian market almost entirely. 96% of the value of all Canadian ecommerce payments is credit card-based, with eWallets taking up only 1% of transaction value in the country. Alternate payment methods are rare, and many Canadian consumers cite the security and reliability of their credit card companies as their reason for choosing them over other payment methods.