It may come as no surprise to you that we’ve continued to see a rise in online transaction volume in the last 6 weeks since the majority of countries went into lockdown.
It’s become clear that local lockdown has restricted physical movement and resigned people to a much smaller radius, certainly within their own country; but in contrast, businesses now need to go global to increase trade opportunities and replace what was happening in the physical. The realisation that I can buy and sell from almost anywhere has dipped down to the consumer level and is driving demand through merchants to the suppliers and the vendors that they use, this will be a positive change for forever. The challenges that sit in the way are typically logistical ones due to the lack of standardisation in the digital universe.
This last week we were part of a host team running a SaaS event across Europe, we were able to bring speakers, panellists and attendees together at short notice, seemingly implausible before, mainly because of the mindset towards physical events and that we would never have got this list of speakers together in that case.
The struggle
For some SaaS businesses COVID-19 has caused them distress and they’ve had to react. Our SaaS clients have had to innovate, discount and re-shape to deal with the pandemic. Think of those SaaS businesses that are working with event organisers or where a physical activity happens and SaaS is used to manage it.
These SaaS companies have had to add capabilities to their platform to ensure that their customers can keep operating. SaaS like Hey Summit (a virtual summit platform) were built for such a time as this and the market has shifted in their favour. But for others, they’ve got a scramble on their hands. As we focus on the safety of our nations and are confined to even smaller spaces, SaaS have realised if they are to win they need to operate globally. In the case of online events, operating globally makes sense, why not run an event that includes a global speaker contingent, marketed and sold to a global audience.
The latest statistics from various bodies are showing a huge increase in online commerce and the digital movement of money.
“Interac data shows average number of transactions increased by 9 per cent compared to the same time last year. While Canadians were using these methods regularly pre-pandemic, a surge in growth of new users… suggests that the shift to digital will last beyond pandemic measures.”
To sell something online requires payments processing, which in turn means that SaaS vendors need to do integrations to the payment providers that their customers need and consider if they themselves can reduce exchange costs by diversifying their payment/finance partners.
The following questions and solutions are focussed on SaaS vendors that have payments as a feature and want to onboard a global customer base who sell locally and internationally.
The global, payments questions
It’s a fragmented payments world out there: local payment methods, hundreds of gateways and multiple acquirers, banks and policymakers all contributing to the confusion for businesses who want work with a global customer base but at a local level.
- What global markets are easy to sell to my business?
- How can I maximise the onboarding of international customers
- Who and what are the local payment providers and methods?
- How do we integrate with those payment providers quickly?
- Are there cheaper ways to accept international payments?
The solutions
Operating globally produces some payments challenges for SaaS, here’s what we’ve seen our successful customers do:
1. Onboard a global customer base by using Shuttle to offer more payment providers.
One integration will get you 29+ payment providers, this could save you two years of integration time. Events are being run by businesses everywhere, but, for example, Stripe currently only acquires customer from 29 countries, so if you only have a Stripe integration you’re missing 170 other countries out. Find out what global markets could be worth working with, what payment providers are used and then market to them.
If you’ve got questions about the global payments landscape we’d be happy to talk to you about it, send us a message in the chat.
2. Save money on fx transfers.
SaaS and merchants have opened multi-currency bank accounts with providers like Ebury. If you are accepting payments in foreign currencies you will be incurring an exchange rate fee and if you are having to payout money across borders you will be hit by another, this soon adds up. Worst of all, most companies weren’t expecting it and don’t know how to get around it. If you have multi-currency accounts you can deposit earnings into a local currency account and then use that provider’s exchange rate, which will likely be favourable to the payment provider’s rate, to move the money back to your home currency account. With Ebury, for example, you can monitor exchange rates and even fix forward rates; that gives business clarity in turbulent times.
3. Offer alternative local payment methods to reduce cost and increase customers.
There are a number of reasons why a seller may not want to have the end customer pay by card, but usually, it comes down to cost. In many B2B sales, transactions are antiquated offline processes, this not only slowing cash-flow for sellers, but it’s also creating stumbling blocks for SaaS to onboard these sellers who need to operate with new technologies to survive. High percentages of payments in certain parts of the world are not performed on a card; RazorPay and WeChat Pay are becoming primary methods of payment in Asia for businesses. SaaS need to ensure that they support these payment methods, are educating their current customers on the benefits of using them, plus advertising the new capabilities to a global audience. A fun-fact for you is that we have seen payments going through on AMEX cards for $250k, good for points and AMEX, not so good for sellers hit with card fees, nevertheless, it’s clear that people want the convenience of online payment.
What can you be doing to be relevant to a global audience at this time?
Conclusion
Online global commerce has been growing year on year but this pandemic has shaken things up and sped up the need for companies to sell and engage globally. Previously the global ecommerce market was projected to double, climbing from $2 to $4 trillion by 2020, we may now see stronger growth; whilst cross border trade is predicted to triple. Businesses of all sizes are expanding globally and new business opportunities are appearing, the race is on.
Shuttle is the only payments technology platform built for SaaS with tools that accelerate going global.
