“One pays for everything. The trick is not to pay too much of anything for anything.” ~ John Steinbeck
Who wishes to pay extra? No one, right? Let’s get down to the nitty-gritty that one should consider before choosing an international payment service provider.
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Be it international or national payment, paying extra is never acceptable. Unlike country-bound payments, international payment always incurs additional painful charges (depends upon the payment service provider one opts for).
With businesses and jobs shifting from offline to online and technological advancements occurring in every tangent of life, fintech has also evolved dramatically.
Not entirely, but many of us have shifted our payment dynamics from wire transfer to the latest payment solutions. The reason why people have welcomed online payments is the urge for instantness in life. Patience is the key to success, but it is the essence this generation is lacking.
The fintech industry is dynamic. Therefore, it keeps changing, and one needs to understand the changing payment turfs in the fintech market.
What are the different types of payment methods?
As technology demands change, fintech is also widening its horizon by offering different payment modes that will cater to users from different walks of life.
Different types of digital payment methods are as follows:
Contactless Card Payments
It is one of the most used payment methods used across the globe. Whenever you order from Amazon, Myntra, Grofers, etc, payment via credit/debit card is one of the reliable options that one could access on online marketplaces.
For instance, you want to order something via Amazon. After placing the order, you opt for the payment method – select card payment – fill in details such as name, card number, expiry date, and CVV.
There are a handful of reasons why contactless card payments are one of the most preferred payment methods, and they are as follows:
- Almost everyone uses credit/debit cards
- Credible – PCI Compliant (depends upon the bank)
- As per Juniper Research, over 53% of global transactions at Point of Sale shall be processed via contactless mode, says Juniper Research.
- Contactless payments account for more than 50% of transactions around the world.
- Moreover, as per recent research, the global smart card market will grow by $65 billion by 2025, with banking representing about 25%.
Digital/E-wallets is the instant heaven for millions across the globe as this payment solution is directly linked with your respective bank and creates a safe pathway to transact money.
E-wallets are considered a secure payment alternative as you don’t have to feed in the mandatory bank details over and over, and support 2 step verification that eliminates the chances of hacking and phishing.
E-wallets can be used for cross-border payments but aren’t the ideal tool as they too come with constraints on the denominations.
As we all know, wire transfer is the traditional way of transferring money directly via banks. For you, it might have been months or years that you haven’t seen the doors of the banks, but many still rely on banks due to their unbreakable trust that money is perfectly safe.
Cryptocurrency is a rage in the developed nations, but it doesn’t have a regulated body governing the monetary deals in India.
Bitcoin is a volatile market that has its highs and lows.
The era of the digital asset is rising, and youth has started investing their time and knowledge on this platform.
Electronic Payment types: Pros and Cons
Before COVID19 struck, online payments were blooming at a gradual pace, but from 2020 India witnessed a surge in the number of online payments users.
India witnessed a 76% increase in digital payments in the past 12 months.
The need of the hour – social distancing curated the path for non-users to download and link their bank accounts on payment junctures such as – GPay, Paytm, Amazon Pay, etc.
But, as the urge for digital payments grew, fraudsters also mobilized themselves with arriving technologies to find the loopholes.
Just like every coin has two sides, online payments have their set of advantages and disadvantages.
Instant: This is one of the trigger factors for the quick shift to online payments. Earlier, when we used banks, it used to take 2-3 days for the fundings to reach the recipient (national), now assume the delay for cross-border along with the additional forex charges.
Secure: Now, this could be a contradicting point because the threat to money is there in both online and offline means. Online payments have Tripple security blankets, authentication, and compliant measures to ensure safety.
Hassle-free: Another benefit of digital payments is that it’s quick and easy. There is no need to invest 15-20 mins to make a payment process because e-payments have eased the process with 3-5 clicks, and payment is done in the blink of an eye.
Convenient door for all: If you want to pay – employees, vendors, suppliers, freelancers, shopkeepers, friends, etc, without any struggle then, digital payment is the only answer.
Moreover, if you have recurring payments, you don’t need to feed the recipient’s information again and again.
Lower foreign exchange rate: This factor entirely relies on the payment partner you select to host payments. There are payment service providers who charge 4% – 5%, and also, there are PSPs who charge highly competitive rates.
Therefore, it depends upon whom you rely on handing over your key to savings.
Vulnerable to cyber crimes: None can guarantee 100% security because technology can be hacked and traced if the payment service provider doesn’t support efficient security and compliant measures.
As authentication measures, when you insert a PIN/passcode or pattern, it can easily be phished by fraudsters.
Checkout delay is spine chilling: For instance, you are purchasing something from Amazon.uk sitting in India, and the payment checkout took more than 10 seconds. It would be a terrifying experience because a slight delay in checkout would pose a tension in users’ minds that their payment is at risk.
Technological lapses: The Internet and income are something that’s a dream for many across the globe. Therefore, to host successful payments, you need to have decent bandwidth, or else there’s no point in having a digital payment solution when you can’t access them.
7 factors to consider while choosing an international payment service provider?
With the growing urge for digital payments, a fleet of payment service providers have popped up in the fintech market, but can they be trusted? No, right?
Let’s look down to a few essential factors that you must while choosing an international payment service provider:
#1. Is it safe & compliant?
This factor should always be the priority because joining hands with a payment solution means handing over your key to fundings. As it’s an international payment service provider, you need to be triple safe because one threat and the loss would be painful.
Therefore, always check whether the cross-border payment provides you with necessary safety measures and compliance.
#2. Follow the needed international money transfer rules!
Whenever you are looking for an international payment solution, you must always check whether the payment solution follows all the necessary rules and regulations or not. You must always check for the following factors:
- Inward and outward remittance rules
- Does it follow the laws of the land?
- Remittance rules for NRI, NRE, Non-resident Ordinary, etc.
- Checks and balances on the fundings in a time frame
According to recent research, the digital remittance market in India has witnessed a dramatic increase experiencing a leap from $614 million in 2017 to $1.377 billion by 2020. Moreover, it is estimated that the existing number will witness a rise to over $2.7 billion by 2024, with a compound annual growth rate of 18.2 percent.
Also, according to the Ministry of Overseas Indian Affairs, India receives over 12% of all worldwide remittances, marking it in the world’s top.
Therefore, if they don’t follow the international payment rules then it should be a point of concern.
#3. Does it cater to you?
Opting for a payment solution that serves you is better than wagging your tail behind the known brands in the fintech market. Be a sheep only when needed.
For instance, you are an Amazon seller and want to get your payment from New Zealand. Now, you opted for a payment solution, but it doesn’t offer its services in that region.
A mere research glitch cost you the valuable niche you held in New Zealand. Therefore, always research for a brand keeping your needs and possible future necessities in mind.
#4. Foreign Exchange rate
The foreign exchange rate has always been a concern because some payment processors cost a pricey percentage of the payment you receive.
Forex is a certain percentage of the amount that will be deducted from your cross-border payment. There are payment solutions in the fintech world that would charge more than 4% of foreign exchange resulting in a gradual dent in the savings.
Therefore, one must always understand the mathematics behind the deductions in international payment. A payment service provider must help in saving rather than making a hole in your pocket.
#5. Offerings and Features
If a cross-border payment solution merely does its core job and doesn’t offer you the cherry on the top offer, then there’s no use in having it.
For instance, a smartphone must help you make calls, use the internet, click images, and store data. But, if the phone offers you four cameras, 4K video, high storage, fast charging, etc. Now, these are some special additional offers that make the smartphone have a higher pitch than its competitors.
Always look for a product/service that not only offers its functionality but offers other factors that could assist you in various ways.
#6. Customer Service
For instance, you purchase a dress from Amazon. But, after the delivery is done the product is not as expected and you wish to return it.
You make a few calls to customer support and drop a mail, but it all goes in vain as you aren’t getting any response apart from the bot via mail. Now, you are finding it hard to both return and refund.
Therefore, efficient customer service is always important because you never know when a dilemma or crisis will arise. And, customer service doesn’t mean instant bot reply, but the actual humans getting on call or mail to sort the issue.
#7. Is there a scope of saving?
If you think it’s not an important question, then my friend, you have been wrecking up your wallet for a long time.
One of the reasons to shift from offline to online payment alternatives was to save your wallet from additional incurring costs. But, even on online payment solutions, you end up spending a similar forex charge as traditional then, there’s no point of shift.
Always check whether your payment solutions could save you some pennies because small savings lead to bigger investments.
For affordable, hassle-free, and secure payment – PingPong
Too many financial dilemmas?
Don’t you worry because PingPong shall be your forever faithful avenger?
Even though PingPong kicked off as sole support for merchants and sellers and today, PingPong is a hidden paradise for Amazon sellers, freelancers, service providers, commoners, and merchants.
PingPong provides you with:
- It caters to commoners, freelancers, Amazon sellers, merchants, and service providers.
- Pay your vendors and suppliers.
- For Amazon sellers – Receive money to your local Indian bank account in INR, USD, GBP, EUR, JPY, AUD, and CAD.
- Highly competitive foreign exchange rate (helps in saving rather than recklessly )
- Pay your VAT & GST without any conversion confusion.
- For freelancers – receive payments in USD, EUR, GBP, CAD, JPY, and AUD.
- Free digital Foreign Inward Remittance Certificate (FIRC) is available after every cross-border payment.
- PingPong has a conversion calculator that would give you the exact amount you shall receive after slashing off the forex.
- You can handle all the currency variables in a single dashboard.
How much is too much?
You’ll never have an exact answer to that because everyone’s threshold for too much varies. And, PingPong is one such perfect partner in the fintech market.
Either you consider the necessary factors and chalk out the best international payment service provider that suits your needs and pocket or bear the consequences for not doing proper research.
Ignorance is bliss, but not always!