One of the most incredible facts of digital commerce is that your customers could be anywhere. That’s not simply true for merchants of record, like retailers, that are able to present a digital storefront globally and ship around the world. It’s also true for all kinds of merchants and aggregators. Digital media companies, gaming, and other digital-first businesses can, with proper planning and execution, move into new markets and access new customers.
Many of Spreedly’s clients have seen their e-commerce growth continue to accelerate because they knew they wanted to be in multiple markets from their inception. Companies like Rappi, which was founded in Colombia and Mexico, knew it wanted to expand quickly across Latin America. Other businesses, like the multiple streaming services that work with Spreedly, launched successfully in their home markets in the US and Europe, before deciding to grow across other regions.
Improving the Customer Experience via Better Authorization Rates
Of course to enter a new market is not as simple as flipping a switch. There might be tax implications. Or, your business model might require local presence, like, say, an order-ahead platform. But one of the most vital elements that must be considered before expansion is the customer experience at the moment of checkout.
A new customer may come to your site and after reviewing your products or services, decide to make a purchase. That most sensitive moment – when they put down their payment method – must proceed well. A false decline, a lack of desired payment option, or an outage by the processor, can have a significant impact on the experience – driving away today’s business, and tomorrow’s subscription or follow-up purchase.
That’s especially true in a global context. A new customer may not be familiar with your brand. So, a false decline can damage your attempt to expand within your target market.
We certainly see that need from the data we collect. With over $40 billion in annual GMV in 2022, we gather a massive amount of insight into the payments market. One fact is particularly striking. The number one most popular payment service provider/gateway in a given region is almost never the best performing from a latency and authorization standpoint.
This disconnect stems from many reasons, including the fact that the relationships that gateways have with local banks vary widely in quality. That drives big swings in authorization rates. As a result, it is vital that your business take a multi-provider approach to payment services.
Providing More Options to Buy via Local Payment Methods
It’s essential that you provide options for your customers to purchase from you. Debit and credit cards are significantly more common in North America than they are in other countries. There, local and alternative payment methods like OXXO and PIX or wallets like PayPal or Google Pay are commonly preferred.
If you don’t offer these and the dozens of other options that are specific to a region or country, you can lose up to half of your target customers. Payments Orchestration supports your expansion goals by enabling you to offer a range of payment options to your customers. Add and remove these options as needed to help avoid cart abandonment in the final step.
Ensuring Up-Time in a New Market
As you enter a new market, you likely want to ensure that you deliver the same experience as customers in your established markets have. That might include short latency and high uptime. But without a track record in the new market and with potentially new gateway providers, you may not be able to ensure uptime.
Payments Orchestration provides a path to support uptime. Users can have a preferred basket of providers. Then, if one goes down, they can use the platform to redirect traffic to an available provider. Customers keep transacting with no perceived impact.
Accessing Markets with a Fast Time to Value
If your business is an established digital commerce brand, you likely already have established relationships with a payment service provider. That provider may serve you well in your initial markets. But even globally recognized payment service providers lack full global coverage. That means you need to select additional providers that can cover regions that are important to your expansion plans.
A multi-provider approach allows you to maintain the relationship with your preferred provider, while adding coverage or enhanced coverage in new markets. At Spreedly, we often see customers move quickly into new markets by leveraging this approach. They might move into Latin America, for example, by partnering with a local expert like D-Local, EBANX, PayU, or others via a Payments Orchestration layer. Using Payments Orchestration allows them to connect to multiple providers with a single connection.
Supporting Experimentation in Your New Target Markets
As you expand into new markets, you’ll learn more about which services work best for you. New services will come into the space with potentially higher authorization rates, better ROI, or enhanced service. You’ll likely want to experiment with these services to see if you can improve your overall customer experience.
Spreedly customers like Rappi use Payments Orchestration to experiment with their vendor mix. In their words, they can add a new provider, direct several percent of transactions to them, and then evaluate the results. If they are good, they simply increase the allocation. Orchestration enables an easy routing of transactions, making this experimentation in new markets simple.
A successful launch in a new market requires delivering a great customer experience. Payments Orchestration enables your business to get to market quickly and ensure high rates of authorization. That means happier customers and better attainment of your revenue goals.