Localized payments are proving crucial to global expansion for merchants and brands, underscoring the need for more payments choice, and integrations supporting it.
That’s the bottom line on news that broke Tuesday (June 28) as Citcon and Bold Commerce partner to combine the Citcon payments application programming with the Bold Commerce headless checkout platform to increase conversions and reduce costs for online sellers looking to foreign markets.
Citcon President and Chief Operating Officer Wei Jiang told PYMNTS the new partnership grew from the fact that both companies “noticed a few things as this trend is happening.”
Consumers aren’t confined by geography anymore, he said, and merchants want to be able to take payments anywhere. The ecosystem has traditionally been dominated by the major payment card networks and North American eCommerce retailers. And that presents a challenge.
“When they expanded globally, they probably assumed that the payment ecosystem is the same everywhere, but that’s not true,” Jiang said. “We know that when you go to APAC, when you go to Latin America, even parts of Europe, the card penetration rate is very low.”
The resulting card declines and related snags when buying cross-border can inject cost and massive inefficiency into payments, making a global integration like this a timely event.
“Our mission is that we saw conversion rate becoming an issue when merchants accept payments globally, and that’s the reason we’re building an ecosystem that encompasses more than just credit cards.”
By integrating with the Bold Commerce platform, Citcon can now facilitate local payments for global merchants “offering many local payment schemes,” he said, “including fast-growing mobile wallets from APAC, from America [and elsewhere]. For example, kakaobank in Korea, PayPay in Japan, Alipay from China” among others, and including the major credit cards.
See also: Payment Gateway Citcon to Expand in Asia-Pacific Region
A Natural Fit
In the most successful partnerships, each party brings something unique and complementary to the table. Such is the case with Citcon and Bold Commerce, which combined are unlocking global online sales at scale for eCommerce sellers keen to tap into new markets for growth.
Calling the Bold-Citcon linkup “a natural fit,” Jiang told PYMNTS that merchants using Bold “want to accept payments globally without integrating with those payment methods one by one. Citcon already has this capability.”
Proof of the need for this kind of solution is found in cart abandonment (Bold data places it at 53% of online shoppers on average), which ties back to authorization rates, all of which are greatly impacted using local payment methods when transacting across borders.
“We definitely see that conversion rates should be improved,” Jiang said. “We know that if the merchant only offers global credit cards, the conversion rate for international shopping is somewhere around 50% to 60%. However, based on a local payment scheme, the conversion rate would be way higher. You’re talking about potentially 40% higher than traditional cards.”
It makes all the sense in the world. People are used to paying a certain way, and asking them to use something unfamiliar can be a big obstacle to overcome.
Which brings things back to authorization rate. Jiang said “on authorization approval rate, we also see it is generally higher compared with the traditional global card schemes” when a local payment option is available. Moving cross-border authorization rates from the 50% range up to the 90% range would be an accomplishment of global proportions, and that’s what the partners are going for.
See also: Citcon Brings eCommerce Payments to South Korea, Japan
Bullish on the Digital Shift Phase 2
Known for providing eCommerce gateways and smart routing of transactions to optimize authorizations as well as simple integrations that cover numerous payment types, the Citcon-Bold Commerce pact comes at a time of rampant eCommerce fraud and chargebacks.
He said “most of the local payment schemes have very low or minimum fraud rates. A lot of them have zero liability, zero charge back rates. This is another thing that will be good for clients.”
“Citcon does recommend to our merchants and clients what are the payment methods which can offer the highest conversion with the lowest fraud. This is very valuable to the merchant. Our goal is really to enhance the conversion rate. It’s not only just a smart routing between the different credit card acquiring [entities], but also among the different payment methods.”
With inflation threatening to morph into a full-blown recession, this ambitious global partnership might be ill-timed if the partners saw the digital shift slowing to a halt.
They don’t.
Jiang told PYMNTS, “We feel it probably accelerated. COVID-19 happened in 2020, and a big part of spending moved into digital spending. People are doing less travel and paying less face-to-face. People are now more inclined to pay remotely. We did see merchants embrace all the different ways of making payments and improving the shopping experience digitally.”
Ironically, the demand is coming from consumers who may be dealing with inflation but have not stopped shopping online and are in fact looking for new products in faraway places.
“We always have been focused on how to improve the shopping experience and addressing the key pain points, instead of trying to create a benefit which is not really addressing true pain points,” he said.
“In this case, the value of growing the business top line, reducing the cost, reducing the risk are going to be more important for any clients, any business in bad economic [times]. So, from that standpoint we’re very optimistic and feeling confident about the business” going forward.
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