PingPong: Why Doing Payments Globally Is All About Thinking Locally

The appeal of the global market for both eCommerce buyers and sellers needs little explanation or introduction. As billions of consumers all over the world are logging into the global marketplace, they are very literally logging into a global grand bazaar where anything and everything they could hope to buy is theoretically a few clicks away.

That situation is only enhanced, PingPong VP of Global FI Partnerships Aaron Xu told Karen Webster, by the rapid proliferation of both global digital commerce marketplaces and standalone eCommerce sites — with ever-expanding channels, there are ever more opportunities to make a conversion connection. To make that connection happen, of course, a payment has to be possible, and enabling those payments to happen across borders is what PingPong was founded to do in 2015.

It is also, he noted, an impetus that has driven many of their competitors into the marketplace.

“We have seen lots of people rushing into this market, possibly on the idea that what we have built over the last three years can be easily replicated,” Xu told Webster, noting that most of them are rapidly finding that actually isn’t the case. The wall that many new cross-border eCommerce entrants are running into at top speed is the failure to realize upfront what a massive undertaking it is to build global scale for seamless, secure, cross-border settlement.

They all learn that reality – usually after struggling for a few months or even for a year or two, before becoming overwhelmed by the complexities and pulling back. That, Xu said, is among the factors driving the recent consolidation seen in the industry. He noted that PingPong continues going strong and pushing toward its next round of expansions.

“I think we started as a cross-border payments player, but we have ended up going deep into  local capacity,” he said.

Because the secret to building out cross-border eCommerce infrastructures, Xu told Webster, is thinking globally in terms of building the end-to-end payments service network, and acting locally in terms of building capacity to make that network accessible and efficacious for its seller partners.

Why All Commerce Is Local Commerce

Going global is mostly a no-brainer for eCommerce sellers and marketplaces; in some sense, the point of their existence is to find ways to reach into the unknown, untapped market and find new corridors for profitability. Marketplaces like Amazon, Alibaba.com and Shopee, among many others, aim to enable such global selling.

The opportunity is obvious, but for those in the business of facilitating the cross-border payments transactions that make this type of eCommerce possible, the real question is about bridging the gap between global ambitions and the fact that every firm is operating in and interacting under local conditions, Xu noted – local conditions that, from a regulatory and practice perspective, are incredibly heterogeneous and specific.

“What we have learned in serving these cross-border flows is that there is always a piece that is about being hyper-local,” he said. “There always needs to be local solutions for managing payments, whereby you extend services to adjust to the incremental needs that are inherently part of any local market and the flow of eCommerce funds into it.”

That effort starts with the most eminent pain point in the process, said Xu: collecting funds cross-border for the seller. But in a natural business context, that isn’t the only pain point. The deeper iterations also have to ensure that the buyer on the other side of the transaction has the same ability to pay through a local mechanism as the seller. They also have to think more deeply about the seller’s end-to-end payments needs, and realize the seller working in a cross-border context has both local and overseas payout needs, he added.

The iterative pain points can’t be ignored or skipped over, said Xu – it is not a matter of deciding which one to solve for so much as an acceptance that one has to build fast, compliant and secure solutions across the board to really manage the cross-border flow of funds. The decision is how to prioritize those solutions.

Creating the Local Global Market

For many of PingPong’s eCommerce partner sellers, when they think about taking on the world of eCommerce, they aren’t thinking in terms of the local market and then building out to the global opportunity, Xu noted. For many sellers, particularly in places like India and China, their primary market is outside their national borders.

What those sellers need, in Xu’s view, are bridges that work both ways so the buyer isn’t struggling to find a way to pay that is compatible with their merchant of choice – they are just using a method already sitting in their wallet. But the seller isn’t receiving or settling those funds with complexity – they are paid in funds that not only flow in, but can also just as easily be put to work flowing out. Both sides of the transaction have a commerce experience that feels local in terms of ease, even though the funds are flowing across borders.

That, from PingPong’s point of view, is achieved through partnerships with banks and financial service providers all over the world — and extremely dedicated in-nation service when they are entering. Being local often means exactly that, Xu noted – and when a market is important enough for them to expand into, that generally means boots-on-the-ground expansion of one type or another (though the methods vary by nation and market needs. Some examples of delivering such local capability include big banks like Citibank, which connects its network branches to 100+ local clearing systems, as well as payment service companies like dLocal, which has deep roots in multiple emerging market countries.

Because what merchants already know – and what the up-and-coming generation of payments facilitators looking to ride the global eCommerce boom are still learning the hard way – is that the flow of funds cross-border is a complex opportunity to crack. While the buyers, suppliers and marketplaces are acting on a global stage, the trick is to keep that performance feeling as local for all participants as possible.

“When we think about these hyper-local solutions to global problems, the main question is always, ‘what is going to help the sellers sell better to the buyer, particularly overseas?’” Xu said. “We think there are more and better ways to meet the needs of both sides of that payments flow, to bring them more into sync with each other and ultimately to build those bridges across the gaps in international commerce.”