When we think about the most common digital payment methods, almost certainly credit cards, PayPal and perhaps other wallets like HYPE and Satispay come to mind.
These are the most used payment methods in Italy, but if we expand our view to the rest of the world, we cannot take for granted that the answer is always the same. Especially in recent years, new alternative payment solutions, which are often ready for an approach to the omnichannel customer, have been proliferating.
Today, there are hundreds of alternative payment systems, the penetration of which can vary significantly, from an individual region to the entire world. The capacity to receive payments with these methods is becoming increasingly strategic.
Especially in the world of tourism, restaurants and luxury fashion, foreign customers are increasingly seeking to pay with alternative instruments, and in some cases being able to meet this demand means taking advantage of an opportunity, perhaps by doing so before competitors.
Let’s look at the most common payment systems in the main countries of origin of foreign tourists.
Most foreign tourism comes from Europe. European citizens have quite similar purchasing habits: they most commonly use credit and debit cards, prepaid cards and PayPal. However, new platforms are also gaining a foothold and, although they were founded primarily for online purchases, tourists are increasingly requesting to use them in stores as well. MyBank, Klarna Pay Now and iDeal, for example, make it possible to pay by bank transfer with all of the benefits typical of an online payment, facilitating the tracking of orders and reconciliation.
Many of the most used payment systems worldwide were founded in the United States, such as credit cards, which debuted in 1950 and, in the beginning, could be used for payments only in a limited group of restaurants and hotels. Today, the offer of US payment methods is highly fragmented, but the most common ones are: credit cards like Visa, Mastercard, Discover and American Express, PayPal, Square Cash, Venmo (PayPal’s digital wallet) and Zelle, to name just a few. Many of them require the payer and the payee to be residents of the United States, so they are instruments that foreign merchants cannot currently integrate; on the other hand, PayPal is available everywhere and thanks to software solutions that are easy to integrate, today it is also possible to offer it for in-store payments.
- PPRO Financial
Russians, like Italians, are still very attached to cash, although, at the same time, they also gravitate towards technological innovations. With a smartphone penetration of 61%, compared to an average of 51% in Eastern Europe, and more than 70% of the population regularly accessing the internet, digital payments have found fertile ground for expansion. Aside from using credit cards, in Russia it is common to pay with Moneta.ru, an instant payment system, QIWI Wallet and Yandex.Money, born in 2002 from a joint venture between the most widely used search engine in Russia and Sberbank, one of the largest banks in Eastern Europe.
The digital revolution has triggered a significant acceleration in the payments realm in China as well. Unionpay credit cards are the most traditional payment system; they work alongside digital wallets, which have a shared origin: they were all founded from the evolution of platforms meant for purposes other than payments.
There are Alipay, a spin-off of the Ecommerce giant Alibaba, Wechat, initially simply the Chinese alter-ego of WhatsApp, and Baidu Wallet, the digital wallet of the most used search engine in China.
The integration of Alipay and Wechat, certainly the two most widespread methods along with Unionpay cards, can now provide an advantage to Italian merchants as well, especially in major cities and tourist areas. In reality, the use of these platforms is growing considerably in cities with larger Chinese communities, like Prato and Milan, where especially second generations prefer these methods for exchanging money and making payments.
Japan, the third largest economy in the world, is one of the countries with the lowest use of cash, which reached just 7% in 2018. The Japanese culture has two apparently contradictory souls, which in reality live together harmoniously: one represents a strong link with tradition and the other a propensity towards innovation, especially technological. The most common alternative payments amongst the Japanese also fit into this context. Consider for example Kombini, which takes its name from the typical Japanese mini-markets where people need to go to finalise a payment that actually originated online. Naturally there are also credit cards; aside from those from the most recognised payment schemes, there are also cards issued by JCB, Docomo, Pay Easy and Line Pay, which are fundamentally all digital wallets.
Completing the worldwide scenario, there are of course other platforms that are making significant investments to become leaders in a sector, that of online and in-store payments, which is becoming increasingly complex and fragmented. Apple Pay, Google Pay and Amazon Pay top a long list of alternative payments which, with the strength of their customer base, are revolutionising an ecosystem which until just a few years ago was the exclusive prerogative of banks.
In conclusion, although it is increasingly more complicated to sort out the payment ecosystem, knowing how to choose the methods most suited to the needs of foreign customers can become a significant differentiating element to compete, boost loyalty and increase sales.
Report of PPRO Financial Ltd
Internal analyses of Axerve S.p.A.
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