International Payment Services – It’s Easier than You Think

By Merrick Theobald, mtheobald@isendonline.com

Virtually every major retailer today is looking for new revenue streams, more cash flow and a faster return on investment. One popular way to achieve this is to equip customer service counters for such payment services as bill payment and mobile phone top-up. Customers who operate on a mainly cash basis have learned to appreciate the convenience of paying bills and topping up phones at retail while shopping, and every retailer involved can appreciate the high margins these simple cash transactions deliver.

Yet many retailers offer only domestic payment services rather than expanding into cross-border payment as well. These retailers may not be aware of the size of the international market or the striking similarities between cross-border and domestic payment services. Or they may be unaware that any distribution partner assisting them with domestic payment services may be fully set up to help them with equivalent cross-border services.

The fact is, retail cross-border payment represents one of the fastest-growing classes of financial services, fueled by wage earners who immigrate from developing countries for higher wages and use the bulk of their earnings to support families back home. It’s also quite easy for retailers who offer domestic payment services to expand to cross-border payment and begin driving additional store traffic – often tapping into new revenues that eclipse revenue from domestic payment services.

A Huge, and Growing, Opportunity
The World Bank estimates that over 215 million people have emigrated from their homelands. The vast majority of them have left developing countries for better opportunities in high-paying labor markets while their families remain behind. According to The World Bank, money sent by these workers to their families in developing countries reached $325 billion in 2010, which represents a 6% increase over 2009. The World Bank expects this number to continue to rise, potentially exceeding $370 billion in 2012.

The top country from which these funds are sent? The United States -- meaning U.S. retailers are especially well-positioned to directly claim some of this enormous international cash flow.

Similar to Services You May Already Offer
Cross-border payment services, which include bill payment, mobile phone top-up and in-country gift cards, will have a familiar feel to any retailer offering domestic payment services. The process of handling cross-border payments via a POS system is very nearly identical; it’s a simple matter of collecting cash and relevant information, and submitting data for fulfillment. The data to be collected may vary slightly, but the mechanics are the same. The only real difference is that the billing organization is located in another country rather than in another state, which also turns out to be a minor consideration.

Most retail distribution partners that support domestic payment services also have the ability to support flawless cross-border payment. Most of those who don’t yet offer cross-border payment are moving in that direction.

Tapping into New Revenues with Minimal Effort
For any retailer interested in expanding from domestic payment services into complementary cross-border services, the path is very short, with little effort needed to get started and a great deal to gain. The gains include all-new revenue streams in cash-based transactions with no credit card interchange fees, and a rich opportunity to up-sell and cross-sell to existing customers while attracting new customers.

As with domestic payments, cross-border payments take just seconds to process, so there’s very little impact on staffing. As the transactions use existing POS equipment, there’s little or no capital investment required.

In fact, for most retailers currently offering domestic bill payment, adding cross-border bill payment may require little beyond contacting the distribution partner that assists with domestic payments. Chances are they are also fully set up for cross-border payment and can offer a quick implementation. If not, it’s reasonable to inquire as to their cross-border plans. If those plans aren’t yet firm, it’s worth considering a second distribution partner eager to help drive additional revenue from competitive and attractive offerings for an important and growing customer base.

Merrick Theobald is VP of marketing at iSend, a leading international electronic payment service that provides multiple options for people who support family members in other countries. Customers control the use of the payments they make, and payments can be managed at more than 80,000 retail locations for recipients located in more than 40 countries. For more information, visit isendworldwide.com. Theobald can be reached at mtheobald@isendonline.com.

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