In our previous post, we provided an introduction to key terms in the banking industry. This time, we will focus on basic types of payments that you may encounter in your business.
PAYMENT TERMS:
B2B
B2B, which stands for Business-to-Business, refers to commerce between two enterprises as opposed to transactions between a business and an individual customer. The size of most B2B transactions is larger than B2C (Business to Consumer) transactions because generally an enterprise will be seeking to buy a large inventory of items to sell to end users. B2B purchasing may also involve raw materials used to manufacture finished products or services. B2B deals may be subject to bidding processes and negotiations, so payments are rarely immediate.
B2C
The term Business-to-Consumer (B2C) refers to the process when a company sells products and services directly to consumers who are their end-users. Most enterprises that sell to consumers can be referred to as B2C companies. B2C payments can take various forms: many B2C transactions take place on websites, where consumers buy products directly from online retailers. Today, many B2C purchases are conducted on mobile apps. When dealing with cross-border payments, businesses should offer familiar payment methods at each location and generate personal relationships with customers.
C2B
C2B, which stands for Consumer-to-Business, is a system in which an end user or consumer provides a product or service to an enterprise, which then uses it to complete a business process. Another C2B model is when a consumer allows a business to market a service or product on their website or blog in exchange for a fee. A different form of C2B is when an end user announces a need and businesses compete to meet it.
C2C
The C2C (Consumer-to-Consumer) business model involves transactions between two consumers. This type of commerce is typical of intermediary auction websites such as eBay, Etsy and Craigslist, but the site does not take responsibility for the quality of the products. In C2C transactions, prices are negotiable and the purchasing process is simple. These websites usually provide convenient payment methods such as PayPal, credit cards, debit cards and mobile apps.
As a rule, it is worthwhile to keep your eye on developing payment trends and new models. The ability to facilitate payments for both enterprises and individual buyers is key to your commercial success.
Singles Day (November 11), which was first started by Chinese college students in the 1990s, is the antithesis of Valentine’s Day. It is a day dedicated to the celebration of singledom.
Some singles have developed various rituals to mark the day including gifting friends with 1 figure-shaped items, from toothpicks to half of a deep fried double dough stick. Other singles, who aren’t into celebrating their status, will go on a blind date on the day so that they don’t have to be alone.
One of the most outstanding customs is self-gifting: This is a day for self indulgence and rewards for hard work all year round.
The world’s greatest shopping extravaganza
Singles Day is hands down the world’s biggest online shopping event. On Singles Day last year marketplace giant Alibaba recorded $30.3 billion in sales in a 24-hour period, more than Black Friday and Cyber Monday combined.
China is the world’s largest e-commerce market, with annual sales approaching $1.53 trillion. So there’s room for everyone – Alibaba is not the only corporation that can profit from the holiday, global retailers can capitalize on this day as well.
The Chinese favor foreign labels so this shopping day represents a unique opportunity for global brands. According to Alibaba, over 40% of Singles Day shoppers purchased international brands, including Apple, Dyson, Gap, Estée Lauder, L’Oréal, Kindle, Nestle, Nike, and Adidas.Over 240 international brands recorded at least $14.4 million in sales.
4 Tips for global online retailers
Last year buyers favored health supplements, followed by milk powder and diapers. Makeup products, including emulsions, facial masks, face wash and toner, were also high on the national shopping list. However, as a large number of shoppers are savvy millennials, many sought out electronics, smartphones and gadgets. Due to the fact that a significant percentage of the shoppers are women, apparel and home goods also sold very well.
Singles Day has spread beyond China to Southeast Asia and other locations. In countries like Singapore, Indonesia, Thailand and Vietnam, local residents eagerly await the day’s special sales.Last year, prior to Singles Day, China’s largest retailer, JD.com, rolled out a two-week campaign called “11.11 Crazy Hot Sale,” in which it targeted Thai shoppers. Even US retailers are starting to adopt Singles Day, as a time when Americans can express well-deserved self-love.
Chinese online consumers use WeChat for every aspect of their lives, from scheduling doctors’ appointments and shopping to messaging friends and payments. Shopping by smartphone in China is quick and easy, thanks to convenient payment methods, particularly Alipay, Union Pay and WeChat Pay. If you want to make a hit on Singles Day, integrate these familiar payment platforms on your Chinese website.
The Chinese are very connected to social media. While WeChat is the most effective way to reach potential customers, Weibo (similar to Twitter) and Youku Tudou (similar to YouTube) are also widespread. Post videos, interactive content, and special coupons to attract followers.
Singles Day offers online retailers huge potential both in China and abroad, but it is very important to study your target audience’s culture, shopping preferences and spending habits before taking the plunge.
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Here are several upcoming holidays that intrepid retailers can use to attract new customers and reconnect with return buyers:
August 26 – National Dog Day
Founded by Colleen Paige in 2004, Dog Day was originally conceived as a day to show appreciation for service dogs and draw attention to the plight of abused dogs. Today, many Millennials have pet dogs. This is a day that dog owners will go out to buy sweaters and new toys for their pets, so retailers with pet stores and online doggie products should advertise special sales on their websites and social media well in advance.
September 8 – National Grandparents Day
Recognized as a US holiday since 1973, National Grandparents Day is a time to pay respect to grandparents, recognize the impact of the elderly on the lives of the young, and enable grandparents to lavish love on their grandchildren. This day is celebrated in many countries worldwide, though not on the same date.
Retailers may take advantage of this day by offering discounts on a variety of gifts for the elderly. Some people throw parties for their grandparents, so discounts on cakes, favorite foods and decorated paper products are in order. Flower arrangements are also popular gifts.
September 29 – National Coffee Day
Coffee Day is celebrated all over the world. Many businesses offer free coffee on this day and pass coupons for free or reduced cups of coffee. This is the day to buy yourself or other coffee lovers their favorite beans.
Coffee shop and restaurant owners can offer special discounts on meals accompanied by coffee, and an array of exotic types of coffee at holiday rates.
October 3 – National Boyfriend Day
While National Boyfriend Day is not an official holiday, you’ll be relieved to learn that it has a counterpart (Girlfriend Day) on August 1. This is a day to cherish one’s significant other.
A wide range of retailers can take advantage of this holiday by offering special gifts for men, both young and old. Whether the guy’s dream gift is a fishing rod or a cool electronic gadget, advertise your special gift choices in advance in-store, online and via social media.
October 29 – National Cat Day
Not to leave the felines out, Colleen Paige created National Cat Day in 2005. This day advocates animal welfare and celebrates the love cats and humans have shared for centuries.
This is a perfect opportunity for pet-shop retailers to offer treats and toys for cats. Cat owners can have a portrait taken of their cat and buy them special meals to celebrate. Creative retailers can offer sales on other products for cat lovers, from new beds to soft blankets and special pillows.
Cause for Celebration
There are several well-known holidays just around the corner like Columbus Day, Halloween, Thanksgiving and Christmas. But by celebrating and commemorating minor holidays on your website and in your physical store, you are connecting with your customers, keeping them involved, and bringing them back for more.
As opposed to fiat currency, cryptocurrency is not connected to governments or central banks. Using a ledger system, cryptocurrency transactions are anonymous and decentralized. Bitcoin’s value, for example, is determined by demand and market supply at any given time, much like precious metals. Due to the fact that no government regulations apply to cryptocurrency and transactions are untraceable, there is a risk of abuse of the system for illegal activities including terror funding and drug trafficking.
Some advantages of using cryptocurrency for payments
Despite the risks, cryptocurrencies have several significant advantages as well:
When utilizing credit and debit cards, and handling transfers, foreign transactions, false declines and many other types of financial activities, there are fees involved. These fees tend to mount up and become quite costly. Cryptocurrency payment gateways charge only 0.5 to 1% per transaction. Most cryptocurrency accounts that take the form of a digital wallet are free.
One of the major banes of credit card use for payments is chargebacks.The cancellation of credit card transactions by purchasers can be extremely costly for merchants. But when it comes to cryptocurrency transactions, the basic rule is that they cannot be reversed.
Consumers are concerned about how retailers, service providers and financial institutions retain extensive amounts of sensitive personal data from an individual’s name, address and email to credit scores and net worth. When performing cryptocurrency transactions, data is converted into numbers, or cryptocurrency wallet addresses, so private information is not revealed.
Cryptocurrency payments are not classified according to countries. There are no cross-border fees, and no limitations on accessing funds. As banks and credit card companies are not involved, users can make payments, pay bills and shop independently.
More service providers and retailers are accepting cryptocurrency
Cryptocurrency acceptance is becoming more widespread among large service providers and retailers. AT&T recently became the first mobile carrier to accept bill payments in cryptocurrency. The Shopify ecommerce platform allows its merchants to accept Bitcoin payments through BitPay.
Microsoft permits users to deposit Bitcoin in their Microsoft accounts for the purchase of movies, games and apps in the Windows and Xbox stores. The large retailer Overstock has been accepting Bitcoins and other major cryptocurrencies since 2014. Paypal also allows merchants to accept Bitcoin through Braintree. There are many small businesses that are accepting cryptocurrency payments today.
What lies in the future for cryptocurrencies?
Cryptocurrencies like Bitcoin lack basic stability because they are not a pegged currency. By nature, they are more like a commodity asset for trading like precious metals. Some enterprises (like Facebook) are introducing stablecoins which are pegged to certain currencies, thereby securely anchoring cryptocurrency. But this would stand in contradiction to the decentralized (and uncontrolled) nature of cryptocurrency.
COTI recently developed the world’s first DAG (directed acryclic graph) protocol for creating decentralized payment networks and stable coins. Other technologies are expected to emerge and innovate cryptocurrency norms. Time will tell what form cryptocurrency payments will ultimately take.
Total spending for K-12 schools and college combined reached almost $83 billion last year. Parents with young people heading to college as well as undergraduate and graduate students purchasing for themselves said that they planned to spend an average $942.17 each.
What do you need for an effective off-to-college campaign?
Keep in mind that budgets are limited and students generally cannot afford to splurge on necessary items. They also may not have a good deal of time to shop or could be uncertain about what they will need.
As part of your strategy, try to be as helpful as possible, provide useful tips, and offer special discounts. Here are several steps you can take to attract these young customers:
A good way to attract potential customers is to set up a separate section on your website with all your off-to-school items and promotions. Make sure to insert a banner on the home page featuring special offers and send buyers directly to the relevant page.
Social media is a prime location to boost promotions for college purchases because that is where most of your customers are spending their time. Use Instagram to show colorful photos of your display and interact with potential customers on Facebook. Make sure your mobile app is up to par and responsive, with exciting images of your products. Be creative and prepare videos on how to set up an attractive dorm room affordably.
Many businesses offer special student discounts on a wide range of products. Discounts can range anywhere between 15 and 50%. There are various ways to verify that the individual requesting the discount is actually a student. If you offer these customers discounts on a regular basis they are likely to return for repeat shopping.
It’s important to offer free and fast shipping, as well as flexible pick-up policies. You should also enable customers to shop now but deliver later. Some stores offer “shop online and pick up in store” possibilities with a significant discount. Target provides a drive up option which enables customers to shop for items from the store’s app and have a store team member deliver them directly to the purchaser’s vehicle. Amazon, for example, has lockers on or near campuses for easy pick ups at convenient locations..
Set up a college checklist with popular items students usually purchase and display pictures of useful products that you sell such as dorm room necessities. Target goes so far as to offer a college registry option with special discounts. To ensure repeat customers, send out reorder reminders and offer special discounts and rapid delivery on group orders.
In order to stand out, you need to offer unique rewards and special features that will attract young people to your website. Perhaps you should try to put yourself in their sneakers and mull a bit about what you would want if you were setting off for college.
Our new e-book provides a comprehensive guide to e-commerce by generations. How and where should you address each segment? What are your customers’ shopping habits, which are their preferences, and what channels should you use to engage them?
Key Tips on How to Target Your Audiences provides you with useful tips on how to best interact with your audiences to generate long-term loyalty and return customers.
Read Key Tips on How to Target Your Audiences.
The post Key Tips on How to Target Your Audiences first appeared on Bm2Pay.]]>The expected boom is mainly due to greater Internet connectivity, upgraded broadband infrastructure and the ubiquity of smartphone use. As it stands today, two out of three Latin Americans have Internet. Last year, 27.5% of all online purchases were done with a mobile phone.
Worldline’s research states that the average age in LATAM is a bit under 30. This means that e-commerce retailers should target a younger audience that uses social media, and particularly Facebook and Instagram, as a matter of course. Just for example, in Brazil these two social media channels together feature a penetration level of almost 70% among internet users.
The key issue of payments
The Latin American purchaser has very clear opinions regarding preferred payment methods and online security. Due to the fact that there is a large unbanked population in the region, many locals prefer cash payments or local debit cards. LATAM purchasers want to see prices displayed in their local currencies and feel secure that their personal data is not being breached when they pay online or via a mobile app.
Here is an overview of three key online markets in LATAM that are showing rapid expansion:
Brazil
Brazil is the largest e-commerce market in LATAM, and it accounts for nearly 32.8% of all regional retail sales. The Brazilian e-commerce segment is expected to reach BRL 79.9 billion this year, which constitutes a 16% growth year on year.
Brazilians use domestic payment methods for 90% of their online shopping. They pay with local credit cards, usually by installments. Another popular payment option is Boleto Bancario. This push payment method enables consumers to pay online, in cash at banks and ATMs, or electronically through online banking. This option appeals to local purchasers because there is no risk of chargebacks. Debit cards are gaining popularity due to the elimination of chargebacks and immediate payment confirmation.
Argentina
As of 2018, there were 17.46 million e-commerce users in Argentina and 30 million have access to Internet. An estimated 22.5 million individuals use a smartphone and 16.8 million shop online. Google, Facebook and YouTube are the most popular social media channels. The online market has been growing steadily and it is predicted to reach $10 billion by 2021. Argentine e-shoppers mostly purchase clothing, shoes and personal lifestyle items, as well as home and garden products.
Over 40% of Argentinian e-commerce transactions are via cards. Visa and Mastercard are the most common cards, followed by American Express, Diners Club, and the local schemes Tarjeta Naranja and Cabal. Cash-based methods like RapiPago and PagoFacil make up 44% of online payments. Most prepaid cards are bought in kiosks for cash. To complete a purchase, the buyer prints out a receipt and pays at locations that accept this type of payment.
Colombia
Colombia is LATAM’s fifth largest e-commerce market, with 65% of Colombians connected to the Internet as of last year. In 2018, there were 34.3 million smartphone users in Colombia. Some 87.8 million online transactions were carried out last year, moving $17.8 million in electronic transactions. Easier access to the Internet, particularly via smartphones, and an expansion in online services, such as banking and online payment services, are the key factors driving growth in Colombian e-commerce. Nevertheless, 94% of Internet users still prefer computers to make purchases, while 49% use smartphones. The most popular products bought online are electronics and computer products, fashion, entertainment and travel.
Cash on delivery and bank account debit are very popular payment methods due to low credit card penetration rates in Colombia. COD accounts for 40% of purchases. The younger generation uses social media like Instagram to make purchases online.
Avoiding the pitfalls
While these three markets are set to boom, it is very important to understand your customers’ purchasing mentalities and payment preferences at each location before jumping in.
Our payment glossary is a great source for definitions, in-depth information and resources. Take a moment to understand the reasons for shopping cart abandonment and high fraud rates. Find out what open banking is and how it will affect your payment options in the near future. Read about ways you can overcome cross-border payment obstacles. Learn how Artificial Intelligence can jumpstart your business. And much more.
Feel free to contact us with any questions you have at [email protected].
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Our new eBook Best Payment Practices for the Travel Industry offers practical tips on how to mitigate high-risk challenges in the travel sector.
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Our new eBook A Merchant’s Guide to International Payments offers an overview of preferred payment methods in various geographies worldwide.
Read A Merchant’s Guide to International Payments.
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