The hospitality industry has a fairly good problem to solve: in the post-pandemic era, people want to have more experiences and compensate for the time lost, so the travel and tourism industries are gaining momentum again, with an expected CAGR of 6.7% over the next five years. With the growth of digital accessibility, more and more customers are booking reservations from all over the world. This is positive for customers and for the economy overall. But hospitality merchants are left with a challenge: customers appreciate and expect a quick and easy checkout. How can they streamline payments and offer the best customer experience?
When implementing payments at a global scale, merchants encounter challenges as they try to expand their geographic reach and pick up some recommendations for payment solutions options that give them access to greater customer markets.
What merchants need to know when entering new markets
To enter any new market, there needs to be an understanding of the new operating and regulatory environment. Merchants often need to set up a local bank account and offer payment options typical to that market, all of which can become basic obstacles for a company wanting to expand beyond its traditional local market.
Emerging markets put added accessibility challenges on merchants. Fragmentations such as payment methods at their own time and cost, cash preference from many customers, taxation, and demand for real-time bank transfers contribute to a complex equation.
As merchants dive into a new ecosystem, they need to also be aware of certain hidden costs associated with global payment transactions, including fraud, risk and compliance. All these factors are cost-dependent on the type of channels set up and what infrastructure needs to be created and managed. Aside from these costs, there are also additional fees, including legal, tax and technology risks. To operate in different markets, all of the above needs to be considered, adding more levels of complexity when implementing a global payments solution.
One legal entity per country? Not necessarily.
To go global, merchants need to offer as many payment options as possible. Large payment processors bring global payment platforms that facilitate payment options in most markets, which cover card acquiring locally and internationally, bank transfers, wallets, and cash to digital, all within the largest banking network connection worldwide.
To provide a seamless and integrated payments solution, the payments provider creates legal entities in each market, allowing merchants to operate and process payments in the countries of their choice without having the same local entity structure. It has also built the tax, compliance and regulatory framework needed to provide global oversight for each merchant and each market of interest. The infrastructure also includes the networks and connectivity to enable payments globally. This all ensures merchants can access markets that were previously inaccessible.
One API can make the world accessible
By partnering with the right payments provider, hospitality merchants can simply connect with only one API to accept local payments methods in every country. The customer has the same payment experience as of paying at a local website. With this effortless implementation, international hospitality merchants offer their consumers a local payment experience without the need to be localized in that country.
It goes without saying that the reduced burden on the merchant will allow its teams to focus on other areas of the business and immediately gives them access to this new audience, serving all of its clients, or web visitors, a premium checkout experience.
The payments industry is now an ally to merchants in navigating the evolving market landscape and providing new solutions as it evolves. Payments are an essential, yet reachable part of the infrastructure that supports these businesses to expand and thrive globally.
ABOUT THE AUTHOR
Gustavo Ruiz Moya is the SVP & CEO Latin America & Global Head Open Banking at Paysafe. His extensive background ranges across several sectors such as payments, banking, and travel industries, including top positions at American Express in Latin America. Since 2013, Gustavo was the CEO of SafetyPay, a Latin American leading payments platform acquired by Paysafe in 2022. Gustavo holds a bachelor’s degree in Business Agronomy from Colorado State University and a Diploma in Foreign Trade from the Universidad de las Americas.