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The payments challenges facing every retailer and how to solve them as you grow

The payments challenges facing every retailer and how to solve them as you grow

Edward Reith-Smith

Business Development Manager at Worldline

Entering a new market is a proven growth strategy that can transform your retail business - and being ready to meet the needs of that market, while addressing the opportunities and challenges involved is essential. Among the many challenges facing retailers looking to expand is that of payment facilitation. Businesses looking to capitalise on payment innovations are often faced with a plethora of jargon-heavy information which makes it difficult to know where to start. Ultimately, your ability to overcome the obstacles presented to you will determine your potential for sustainable success.

Edward Reid-Smith, Business Development Manager at Worldline, looks at some of the things to consider when it comes to business growth and the issue of payments.


Know your customer

Consumer expectations are incredibly high when it comes to retail experiences and it’s particularly important to match these expectations when it comes to the point of conversion – payments. Ultimately, payments should be all about convenience. Customers want to choose how they pay for goods and spend as little time as possible doing it. The demand for frictionless payments and ‘invisible payments’ is rapidly increasing, making them a critical unseen part of the customer journey and experience.

But when it comes to expanding your business into a new, international market, understanding your customer base within this new geography can be a challenge. When entering international markets, besides identifying who your potential customers are, you also need to know what motivates them to purchase your products.

Customer needs are wide and range dramatically across different economies because of nuances in culture, language, beliefs, habits, economics, or local competition. And the diversity of payments needs from market to market is no exception to this rule and there are several factors merchants might want to consider.

Customer behaviour

  • What does cash versus card usage look like in your target market? We have seen a significant shift during and since the pandemic towards cashless societies, but this can vary in degree from one country or region to the next. As a retailer, really understanding how a particular market works is important for success.
  • The attitudes towards debt, such as credit cards or financing options such as Buy-Now-Pay-Later are an important aspect to consider when reviewing new markets. We know that Germany, as one example, is a nation very adverse to risk and credit (only one in four Germans has a credit card), whereas in other regions the rates are much higher.
  • As a retailer moving into new markets it is also important to understand the speed at which the consumers in that market might adapt to new payment methods. The growth of e-wallets in Northern Europe, as an example, is growing slower than that of the UK.

Local Payment methods

  • Local payment options and the impact they might have on your business 
    • Accepting local payment methods is key to successfully launching in new markets. In Germany we know that over 90% of retailers offer open invoices as a method of delivery and settlement for goods, but this can bring its own challenges with higher levels of returns by consumers.
    • Girocard in Germany is a method of payments used widely across the country, accounting for the largest percentage of in store transactions in the region. We estimate that through lower fees associated with Girocard transactions, merchants save a total of 200m Euro a year on fees. As a retailer, you not just need to offer this payment method, but you would want to as well!

Local support

  • The availability of local partners who have experience in your target regions
  • The provision of technical or language focused support
  • An understanding of local regulation


Manage international payments effectively

When expanding your business into a new, international market, deploying an effective payments strategy can be complex and daunting. The latest innovations in payments can help consumers to pay in their own currencies, automatically working out currency conversion. But while opening new sales opportunities is incredibly exciting, it brings with it a fresh set of confusing challenges including tax, custom rates, currencies, restrictions, and legislation.

Look to overcome issues with international payments by partnering with a provider who can facilitate cross-border payments seamlessly. This is the most hassle-free way to do things without investing too much of your valuable resources, time, and money.


Identify ripe opportunities for collaboration

Just as retail is a rapidly evolving industry, so too is payments – making it the perfect dynamic space to collaborate with others who share the same business objectives. When done right, partnerships can result in the perfect win-win outcome, creating additional exposure and revenue all round while optimising the payments experience for customers.

As a retailer you should ensure that you are working with a payments partner which not only invests in innovation, research, and development but who is also able to bring the fruits of those processes to market in a timely fashion.

In addition, always select a partner with whom you can truly collaborate, rather than a transactional relationship that is purely commodities driven. Whoever you choose should, ultimately, be the perfect enhancer and accelerator to drive growth in your chosen marketplace.