Keys to Success: Implementing New Payment Methods on a Global E-commerce Platform

Supporting the right set of payment methods for each local market in your ecommerce channel will significantly improve your conversion rates. However, the work required to enable new payment methods is significant. Let me share a few lessons I’ve learned to help minimize the time and effort required.

Optimize the payment options offered in each market.

Besides ensuring you have support for the standard cards like Visa, Mastercard, and American Express, you need to understand what methods consumers and small businesses use to purchase online. For example, in Germany you probably need to support Giropay. In Denmark you might want Trustly and MobilePay. In Brazil, Pix will be important. Japanese consumers will expect PayPay to be supported. Each payment option you support will add time and cost to your implementation, so make sure that usage numbers and the nature of the product you sell online align with the payments you support.

Minimize the number of gateway providers you work with.

Each payment gateway provider will have their own API’s, integration requirements, and financial settlement processes. So, each unique provider you work with will drive technical integration and business process alignment work. The volume of business you do with a gateway provider will also affect your fee tier. Concentrating your business with fewer providers will lower your ongoing fees and support costs. Carefully consider both the geographic footprint of each provider and the breadth of payment options supported in each region where you have significant sales.

Utilize experienced local legal and tax counsel to navigate regulatory and compliance hurdles.

The legal landscape around data privacy, online tax verification, tax collection, and fraud has been shifting rapidly.  Governments have passed various data privacy laws and procedures that must be followed during online transactions to make sure Personally Identifiable Information (PAA) is protected. A wide variety of regulated processes make sure the proper taxes are identified and collected. Payment providers also have extensive documentation requirements related to Anti-Money Laundering regulations.

Even within the European Union, there is wide latitude given to each country on how regulations are implemented. You run a high risk of delays and/or fines without qualified guidance on what is required to comply. You will need to manage a matrix by country and payment type to ensure all the Know Your Customer (KYC) documentation is collected, submitted, and approved. This process can take months if your company’s legal registration documents do not list the current local directors. Those local directors must be prepared to show proof that they reside in the country and are employed by your company. Each country has specific ways this proof must be gathered and submitted.

Remember: Contracts, contracts, contracts.

The global and local business, purchasing, legal, and data privacy teams must be aligned on critical contract terms, and those should be in an approved template that gets tailored for each local contract. This must be done up front, or you will spend multiple time-consuming cycles reviewing and re-negotiating contracts. Any non-negotiable points should be made clear right away in the contract discussions with the payment gateway providers, payment providers, or local banks. Disagreements on these points should be escalated to top management on both sides immediately.

Get your back-end processes ready.

If you will be working with new payment gateway providers or new payment methods, that will impact the way order management, settlement, and returns work. Increased revenue from higher conversions will be wasted if manual processes have to be implemented on the back end. The finance, tax, and supply chain teams will need to be part of the project team from the start. Processes like order cancellations, partial cancellations, refunds, partial refunds, settlement, and tax collection and remittance will need to be vetted. You will also need a strong fraud management tool.

Pull it all together.

Any significant changes in payment methods will generate a lot of work. Minimizing extra effort, reducing wasted time, and avoiding costly fines related to compliance problems requires strong communication and organization. Deadlines and responsibilities have to be clear and reviews on progress to knock down any impediments need to happen almost daily. This means dedicated resources are required with a project manager to keep things on track. The benefits are worth it — you just need to be prepared for the journey.