It’s one thing to talk the talk on cross-border payments, one of the hottest and increasingly vital areas of global payments and commerce. It’s another thing to walk the walk, especially when it comes to giving sellers the chance to gain new revenue via online marketplaces and new markets.
And that’s the sense one gets when listening to Kenny Tsang, managing director, Southeast Asia general manager at PingPong, a cross-border and online marketplace services provider, as he talks about enabling sellers in developing markets to sell outside of those markets — in this case, sellers from Vietnam who can get more of the local products to buyers from outside the country via those digital marketplaces.
Karen Webster of PYMNTS recently caught up with Tsang for a discussion about cross-border payments — specifically, how to do it better in Southeast Asia and Vietnam, where entrepreneurs are setting up shop to capture a piece of the global commerce pie and to do so at scale. PingPong’s platform helps these sellers find new buyers on marketplaces like Amazon, Newegg and Shopee, enabling their acceptance of the digital payments preferred by those global buyers.
It’s an opportunity PingPong is hoping to accelerate. Tsang told Webster that the firm had opened up shop in Vietnam, putting feet on the street in this emerging market for cross-border commerce.
“You have to have people on the ground,” he said, telling Webster that PingPong has offices in the north and south parts of Vietnam. “You have to do business in their culture and their language. That is super, super important.”
Tsang pointed to bamboo straws as an example of how that’s working — that is, how it has given Vietnamese sellers a chance at a new market opportunity. With plastic straws banned in parts of the West for environmental reasons, sellers in Southeast Asia have seen an increased demand for bamboo straws, requiring a robust cross-border payment system.
The rising importance of cross-border transactions comes as consumers around the world expect more from their retail transactions. Moreover, that has sharp consequences for payments services providers and payment apps, especially as they face more and more competition. “You have to offer something more than just the convenience of payments to these sellers,” Tsang said. “You have to bring fringe benefits and discounts and promotions. Over time, the winner will be the one who can offer more benefit than the convenience of paying by mobile phone.” Doing such things helps to gain more attention for those marketplace sellers, he noted.
In a commerce and payments sense, Vietnam — along with most of Southeast Asia — is a long way from China, where Alipay and WeChat have built dominant mobile ecosystems. The situation in Southeast Asia countries is more fragmented and less unified, to say the least — with the added challenge of cash playing a central role in transactions. “There is no clear winner at the moment,” Tsang said.
One of the biggest challenges is moving past most consumers’ preference for the cash-on-delivery payment method, Tsang told Webster — a preference that carries over to eCommerce. Even as consumers shift more into online and mobile commerce, cash promises to play a significant role going forward. After all, culture can linger even in the face of technological progress. “It will take some time to convert people from using cash to mobile payments,” he said. Also, sellers will have to adapt their marketplaces to accept digital forms of payment that will boost their cross-border opportunities.
However, global trends favor that move, even in Vietnam and Southeast Asia. The lessons learned from other markets — even with their different cultures and regulations — are sure to provide value to these newer efforts.
Just a few months ago, for instance, news emerged that PingPong would invest €100 million ($113 million) in Luxembourg. PingPong and Luxembourg’s relationship goes back to 2017, when the FinTech startup got a payments license in the region, allowing it to operate between Chinese outfits and customers in Europe.
Together, a robust cross-border payment system, combined with all marketplace services, can help sellers in various countries achieve more of a presence in global commerce.