The industry’s come a long way since merchants first began to use the Internet to sell products to a global audience. Once upon a time, credit cards were the only possible way to accept payment via the Internet. A host of alternative methods now exist to transfer money between customers and marketers. These payment methods can be divided into two types: those appropriate across multiple markets, and those that must be set up in each local market you target.
When taking a global approach to international sales, you essentially decide to treat every customer the same, regardless of his or her geographic location. These customers are offered the same payment methods and payment forms. You even may decide to only offer pricing in U.S. dollars, though dynamic currency exchange can be used to provide the approximate value of each product in your customer’s home currency.
The two payment methods most appropriate for a global approach are international credit card and e-wallet solutions. The most important consumer credit cards internationally are Visa and MasterCard.
E-wallet solutions provide a payment bridge between the marketer and the customer. Customers pay into their e-wallet, then initiate a payment from their e-wallet provider to you, the marketer. The e-wallet provider may offer to pay you by an electronic funds transfer, check or international wire—minus its payment fee. PayPal, Moneybookers and NETELLER are just a few e-wallet solutions currently available to international marketers.
Taking the Local Route
The cultural attitude toward payment is different in every country. Marketers that choose to take a more local or regional approach to international sales often tailor their Web sites to the payment preferences of consumers in a given market. As such, they may design multiple payment pages.
Credit cards are as important a payment option for a local approach as they are for a global approach. The cards accepted, however, may vary by country. In addition to Visa and MasterCard, consider offering the JCB card for Japanese yen payments or the Carte Bleu debit card for euro payments from France. American Express is welcomed in Canada, but is not yet a popular consumer card outside of North America.
Many e-wallet solutions now also provide consumers with local payment options, and should be considered for a local approach.
In addition to local credit cards and e-wallet solutions, marketers seeking to penetrate local markets should consider offering direct debit and giro transfer.
Direct debit is a method of payment whereby customers give you the information and authorization required to debit funds directly from their bank account. Direct debit is a popular payment method in many European countries, and particularly so in Germany, Austria and the Netherlands. In the United Kingdom, direct debit is a popular way to make recurring payments such as monthly charitable giving programs or membership fees.
In practice, direct debit is similar to accepting credit card information online. Unlike credit cards, however, you don’t have the reassurance of an international authorization network to advise in real time whether or not funds are available in the customer’s account, nor do you have the option of an international merchant account for multiple currencies. Direct debit facilities must be specially established in each of your target markets.
It’s important to be aware of direct debit rules in each country. Where Germany and the United States limit standard liability for direct debit to 60 days, in the United Kingdom, a customer can reverse a transaction indefinitely.
Another popular payment method appropriate for a local approach is a giro transfer, which is an electronic funds transfer initiated by a customer. With this payment option, the marketer provides its giro account details and a unique payment reference number to customers, who then can use that information to initiate a transfer via their online banking facility.
This method of payment particularly is appropriate for higher ticket items and transactions where limited liability is desired. Because giro payments are initiated directly by customers, they are virtually non-repudiable and chargebacks are extremely rare.
Renée Frappier is the marketing manager for PacNet Services Ltd., an international payment processing company based in Vancouver, Canada. She can be reached at firstname.lastname@example.org.