The digital economy in the GCC region is developing rapidly. UBS predicts that between 2022 and 2030, its value will surge more than fourfold to about $780 billion – double the forecast global growth rate. With digital transactions also rising, the payments industry in the UAE alone is projected to record a 55% jump in revenue in five years, according to Boston Consulting Group (BCG). Meanwhile, more mature legislative and regulatory frameworks, accompanied by increasing ease of doing business in the GCC, have created a favorable climate for companies from around the world to expand into the region.
Nevertheless, multinational merchants expanding within the GCC—whether SMEs or larger enterprises—still face challenges associated with managing cross-border payments. Slower transactions, higher costs, and currency risks can all cripple an organization’s margins. But payments can also be a genuine value creator.
For those looking to turn international expansion into growth, Remo Giovanni Abbondandolo, General Manager – MENA at Checkout.com, delves into three steps that can prove vital in making payment systems faster, smarter, and more adaptive.
Strong groundwork cannot be underestimated
It is vital to work with partners who can navigate local regulatory complexities and who have the right on-the-ground relationships. Getting watertight on all things regulation, tax, and compliance is an absolute must, as is implementing robust fraud prevention and security measures. When finalizing partnerships with local banks and acquiring partners, the contracts need to include clear terms regarding transaction fees, settlement periods, and dispute resolution. It is also crucial to choose a payment service provider (PSP) whose acquiring network, tech infrastructure, and fraud solutions can support long-term business expansion. Integrating with the PSP’s payment gateway – after a trial run to test for compatibility with own platform – will help ensure smooth transaction processing.
Measure what you treasure
There are certain simple but crucial processes that need to be in place for a company to successfully navigate cross-border payments. Setting up financial reporting systems and settlement processes, establishing clear procedures for handling dispute resolution, and developing an emergency response plan that is relevant to the region’s cultural nuances are all key to getting businesses off to a flying start. Yet tracking payment performance and financial metrics is another imperative. Here, ‘measure what you treasure’ is the golden rule. Analytics tools that monitor performance, such as transaction volumes, success rates, and customer behavior, generate valuable insights to inform effective payment optimization strategies. In this context, it is important that the PSP provides full and transparent access to the payments’ data, and offers local expertise to guide businesses in finetuning their propositions.
Show up in a locally relevant way
The ways in which people like to engage in digital commerce vary significantly between – and sometimes even within – countries. Providing a highly tailored experience thus matters a great deal in competitive industries. In addition to determining local transaction currencies and exchange rates, companies must offer multilingual customer support, and localize customer interfaces. But localization is not just about currency, language, and payment methods. Businesses must lay out a pricing strategy that is competitive in the local market. This means aligning products and services with religious and cultural norms, as well as respecting local customs and holidays across your operations. Let’s not forget that cultural nuances also play a huge role in the rules of engagement for digital shoppers, such as preferred channels.
With more than half of enterprise merchants saying they plan to expand into new markets within 24 months, find additional strategies to ensuring cross-border payments ROI from day one in the play-by-play workbook ‘How to turn expansion into growth.’