That Will Do Nicely - Online Payment Solutions For Expatriate Communities

By Author: Neil Tug
Total Articles: 56
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That will do nicely - Online payment solutions for expatriate communities

What do you really know about emerging markets and online payment solutions for expatriate communities? Probably not as much as you really need to know

Where would your business be in today's global marketplace if you could not support the way consumers wish to pay? Over the past ten years, businesses have evolved from P.O collection invoices and 'the cheque is in the mail' invoice payments to sophisticated online payment solutions involving wire transfers, credit cards, ACH, echeques, Money Transfer services and digital cash solutions.
Consumers are much more likely to purchase from a website that communicates in their language and local currency. And with millions of people accessing the Internet in a language other than English, website localisation and translation is clearly important in expanding and improving sales. So is flexibility.
Gaming operators know that if they want to target a specific consumer population, they have to offer regional games in foreign languages and online payment options ...
... in the currencies of the players' jurisdiction.
Typically, in the past, it was difficult to secure regional or domestic payment solutions in order to market to expatriate consumer pockets, but the Internet has changed the landscape by allowing merchants to connect and service consumers from all over the globe regardless of their operational jurisdiction. Understanding local money transfer regulations (both in and out) in target markets is critical to ensuring you are able to support the payment needs of consumers in those markets.

Expat workers in traditional markets
As the internet gaming industry expands into emerging markets, and operators increasingly focus on payment and language options to attract new consumers, they need to take a serious look at whether they are providing the right payment options for their traditional markets. Interestingly, immigrant groups within established markets are often overlooked.
According to a UN population estimate, the US has the largest number of immigrants, at 38.4 million in 2005, accounting for 12.9% of the total population. The US emigrants constituted about 0.8% of the total population. The top ten immigrant sourcing countries for the US at the end of 2005 were Mexico, Philippines, Germany, India, China, Vietnam, Canada, Cuba, El Salvador and the UK. The majority of immigrants are from Mexico and other Latin American countries.
According to the International Association of Global Money Transfer Networks, the USA is also the world's largest outward payment remittance market. The total amount of outward remittance was about US$42.2bn, or 0.3% of the country's GDP in 2006. What this means is that these expatriate markets are needing payment and remittance solutions that are convenient, secure and reliable.
In recent years, with increased globalisation of economies, opportunities for expats have increased substantially. Companies in developed nations are looking for more skilled workers at lower costs to reduce their employee cost, a need met by the expat workers. The recent credit crisis is laying significant pressure on US companies to reduce their costs, thereby leading to increased skilled labour force sourcing.
We have seen that even in English-speaking countries, a significant percentage of immigrant groups worldwide are searching the Internet in their native language, rather than the language of their adopted nation. As well, they would like to be able to spend money online in their local currency, rather than their adopted country base currency. The pressure to remit money home for family maintenance needs remains very strong in second- and third-world countries.
For instance, merchants may think that their European business only needs payment solutions in euros and pounds sterling. However, they must consider the large expatriate communities within the European market. Take the Indian consumer market in London, for example. The ability for merchants to process Indian rupees credit card transactions may win them the consumer sale, however remitting back to this same cardholder will be a challenge for the merchant if they have not thought through or incorporated a localised remittance service that allows their Indian consumer to receive local funds in Rupees. Remit2India is a product available for the Indian communities around the world (along with Remit2Home) which identifies the need for 'westernised' merchants to understand the payment culture of lesser developed nations. Currently, money transfers to India are estimated at $28bn per annum.
Another example exists in Panama where there are established tax treaties with Japan and a significant amount of Asian business takes place there. Finding an acquiring solution in Central America that can support yen, Korean won, Malaysian ringgit presentment processing or JCB acquiring may be easier then you realise!

Alternative payment options
Implementing non-credit card alternative payment services is an important factor for businesses to consider as part of the payment process and when marketing to expatriate communities in target markets. Alternative payment solutions are not only convenient for consumers but can be far more flexible and inexpensive for merchants if you can figure out a way to implement them securely online.
PayPal can be implemented by connecting to First Atlantic Commerce's international payment gateway and provides online merchants secure access to over 350 million worldwide PayPal consumer accounts - in local currencies. So if you are targeting Chinese markets, PayPal is the obvious solution with which to start. Similarly for the South American market, implementing PayPal to receive Reals transactions is far simpler than trying to set up an acquiring solution in Brazil.

What about protecting your business from online payment fraud?
Implementing regionalised payment solutions and tailoring for specific consumer markets also creates a breeding ground for fraudsters and money laundering. Banks hammer on about Knowing Your Customer (KYC) but what about Knowing Your Enemies (KYE)? Chargebacks and fraud (friendly or otherwise) have become especially problematic for online merchants in this credit crisis market as it lends itself to fraud and chargebacks from consumers who are unable to pay their outstanding credit card bills.
Consumers that charged transactions to their credit or debit cards three months ago are now charging them back under the 'zero liability' issuer programmes (chargeback RC 23 and RC 83) simply because they can no longer afford to pay their bills due to job losses or investment losses, consistent with the economic climate.
Friendly fraud cannot be completely prevented as you can't prevent a consumer from initiating a chargeback. You can, however, mitigate your risk to these fraud chargebacks by implementing 3-D Secure solutions. Verified by Visa and MasterCard SecureCode will mitigate your losses associated with specific Reason Codes considered fraud chargebacks, and should be implemented by all online business in every region in which they operate. In a market where consumers have legitimately performed the transaction, yet are now charging back and claiming they didn't do it, the only protection a merchant and an acquiring bank has against those chargeback losses is Verified by Visa and MasterCard SecureCode. VISA USA does not help matters with their USA issuer, zero liability policy that virtually eliminates consumer liability in cases of card fraud for all Visa card transactions processed through the Visa network, including online purchases.
Further, with the increase in chargeback volumes and a reduction in overall sales processing, the card associations are levying fines on merchants (and acquirers) because the ratios now exceed the monthly maximums allowed under the Card Association Rules.
FAC's multi-region 3-D Secure Solutions for Verified by Visa and MasterCard SecureCode are available as a standalone service to merchants, and will shift the financial liability of specific chargebacks to the issuer and cardholder who performed the original transaction. If you want to tackle emerging markets or expatriate communities, you must know who you are dealing with BEFORE you complete the client profile and well before the initial payment funding takes place. 3-D Secure combined with consumer card authentication, AVS and CVV2 match checks will go a long way to ensuring the person using the card is in fact the owner of that account. This is prudent validation even if you are setting up PayPal because PayPal consumers can also fund their transactions with their credit cards.
Who ever thought that in the insanely fast world of online payments, successfully targeting expatriate communities in their local language before cocktail hour, while hunting down your elusive online enemies would be so rewarding.

First Atlantic Commerce - Headquartered in Bermuda, and established in 1998 to create secure card-based payment solutions for e-businesses, FAC provides powerful technology designed to work with most merchant platforms. Business solutions such as 3-D Secure Payer Authentication, IP Geolocation, Virtual Corporations and the online payment gateway are available in various international jurisdictions.