How Easy Is It To Set Up New APMs?
Alternative Payment Methods APMs have become widely accepted by consumers in recent years. In fact for many they are no longer viewed as ‘alternative’ but instead their preferred method of making an online payment.
While PayPal is perhaps the most recognised global alternative payment method, with 20 million accounts in the UK and over 140 million worldwide, there are many other APMs that allow merchants to reach consumers in different markets. Alipay in China is a great example. Bigger than PayPal, it has over 520+ million active users and enjoys over half of the market share in China.
Other APMs such as Bancontact in Belgium, EPS in Austria, iDEAL in the Netherlands, Przelewy24 in Poland and SOFORT in Germany (with users in 13 EU countries), also have a strong market penetration in their domestic markets. Offering APMs like these allows merchants to explore cross border trade and reach new markets.
They can also help increase conversion with overseas nationals living, studying or travelling in your domestic market: reaching tourists, students and migrants whose local bank account is in their country of origin.
Instead of trying to persuade consumers to use your domestic online payment methods – many of which may be unpopular or inaccessible to overseas customers – localised APMs can enable merchants to take payments from consumers in their local language and currency.
It is predicated that by 2019 55% of worldwide online transactions will be based on alternative payment methods.
Integrating APMs Into Your Payment Process
If your business has identified a new market and needs to reach customers with their preferred payment method, how can you integrate a new APM into your payment process? There are 300+ different APMs available globally and therefore choosing the right ones for your business can be complicated.
However, online payment services providers like Secure Trading can provide you with insights into your target market, including market penetration of different APMs, sector variables, consumers trends and behaviours in your chosen markets, and associated risks that will enable your business to select the right APMs.
Once you’ve identified an alternative payment method there are two options. It is possible to apply directly to the APM to use a product, the APM provider will appoint a 3rd party to verify your company or organisation. Once your business has been verified and you have applied for a specific payment services product (if more than one is available), the APM will access your application and if approved provide the information needed by your technical team to integrate the product into your payment process.
Alternatively, your existing Payment Services Provider (PSP) may offer an end-to-end solution that allows your business to accept multiple alternative payment methods. This option avoids the issue of managing various APM providers, and also ensures that you can reach new markets and access preferred APMs without needing to instigate a company verification and qualification process for each APM.
Instead, updated merchant boarding documentation is submitted with the proposed merchant pricing; these are signed by the merchant and sent for underwriting and approval. Typically SLA approval is two business days. This option is generally much quicker than the direct approach, which can be more complex with large amounts of paperwork required for each individual APM product. It allows businesses to access APMs and respond to market demand quickly and with minimal paperwork.
If your business requires multiple APMs it can also be advantageous to integrate all reporting into one centralised dashboard with daily reporting coming from your payment services provider. You can also measure how APMs perform against online payment card transactions for each target market, and consolidate your online payment reporting in one place. Insights into each market and how different payment methods increase conversion are therefore much easier to review and use as part of your business’ future ecommerce strategies.
To find out more about alternative payment methods and to explore localised APMs for your target markets, visit our Alternative Payment Methods page.