Foreign payment systems: features and selection criteria

[CarderPlanet]

International payment systems (IPS) do not differ much from Russian ones in terms of functionality or operating principles. They are convenient to use when making payments with foreign partners and clients — As a rule, foreigners tend to trust only their own well-known payment systems and very rarely use the PS of other countries.

However, all foreign payment systems have one big disadvantage — their functionality in Russia is limited. Depending on the internal policy of a particular service, there may be problems with withdrawing funds to bank cards or in the form of cash, transferring money to electronic wallets, and so on.

When are foreign payment systems used?​

For individuals, international POS is an opportunity to pay for goods and services around the world. Depending on the features and functionality of a particular service, the consumer is offered:

• profitable currency conversion;
• protection of payments from fraudsters — for example, the ability to withdraw a payment if there are doubts about the integrity of the seller;
• cash insurance;
• discounts and bonuses from the system's partners.

Legal entities and individual entrepreneurs are recommended to switch to international PSS if:

• the business has outgrown the national market and entered the international market;
• the target audience is located abroad and is not used to paying using domestic payment systems;
• it is not possible to develop and implement your own solutions for accepting payments from foreigners;
• business is connected with the use of cryptocurrencies.

When choosing foreign payment systems, you should pay attention to the license agreement: some services restrict the acceptance of payments from legal entities or, conversely, provide their services only to individuals.

Foreign payment systems for individuals​

Today, about 10 foreign payment systems officially operate on the Russian market. Each of them has its own advantages and disadvantages. When choosing a suitable one, it is recommended to pay attention to the following points:

• Security: whether money transfers are protected or personal data is encrypted.
• Confidentiality: Whether the service transmits customer information to third parties.
• Easy registration: in some cases, account registration will take a couple of minutes, and in others-up to several months (for example, if you need to send notarized copies of documents to the office of the payment system operator).
• Commission amount and currency conversion features.
• Availability of additional fees: in addition to the commission that depends on the amount of payment, the PS may charge fixed fees for individual transactions (for example, transferring funds from account to account).
• Additional services and their cost: is it possible to issue a plastic card linked to the account, refund the payment, etc.

Separately, I would like to mention the functionality that allows you to transfer money to users who are not registered in a particular PS. Many foreign services provide this opportunity:

• generate special links for simplified registration;
• create temporary accounts;
• they transfer money using the details of their current debit or credit cards.

Experts advise that when choosing a payment system, you should focus on the most popular services in other countries. For example, to pay for goods on American sites, it is better to choose the PS that most Americans trust, and for payments with Asian online stores, it is better to focus on the experience of Chinese or Japanese users.

International payment systems for legal entities and entrepreneurs​

Experts recommend choosing payment systems that are familiar and understandable to the target audience. So, if the business is focused on the USA, then it is better to make a choice in favor of a local service that has been successfully operating since 1998. Even if the brand of the Russian company is unknown to the American consumer, the ability to pay through a reliable service will become an additional guarantee of transaction security.
In addition, you should pay attention to the presence or absence of additional services focused on e-commerce, small and medium-sized businesses. Some payment systems provide special modules that make it easier to accept payments from partners or buyers.

When choosing, it is important to consider:

• Tariffs — most often, prices are set based on monthly turnover and the specifics of a particular business. Many PSS offer individual rates.
• Ability to make mass payments.
• Limits on the size of transactions — in some cases, there are minimum and maximum thresholds.
• Providing analytics-it will be useful for entrepreneurs to learn in what currency, what methods are most often used to pay for goods, which countries the main flow of customers comes from, and even at what time users are more likely to make purchases.
• Multi-currency — it is convenient if the PS automatically converts currencies and works with national currency units of many countries.
• The presence of a mobile app — both for the seller and for buyers.
• Reversibility of payments — some services return payments on the initiative of customers, while others, on the contrary, completely exclude this possibility.

In some situations, anonymity is necessary — there are payment systems that work without a mandatory verification procedure.
Among the additional useful features, it is worth noting the presence of partner programs (some PS even pay interest on account balances), online lending, and support for cryptocurrencies.

Disadvantages of foreign systems​

Many PS take a responsible approach to security and easily block users at the slightest suspicion. For example, if there is a discrepancy in the specified personal or registration data, the PS blocks the account (even with large amounts of money on it).
In this case, it is either impossible or very difficult to get funds back from the account: you will have to collect documents confirming the legality of the sources of funds received, certify them with a notary, translate them into a foreign language( and also certify it), and send the documents to the company's head office. Moreover, legal entities may have additional questions regarding the tax rules of a particular country.
Another big disadvantage is the limited functionality. You can use the PS without restrictions to receive and send international payments, but you will encounter a number of difficulties when trying to withdraw money from the system. For example, to withdraw money from two of the most popular payment systems (and the oldest on the market), you will either have to open a bank account with a foreign bank, or use the services of intermediary companies (the commission for such transactions can reach up to 20-30 % of the amount).
However, experts also mention another drawback: the uncertainty of the legal status of foreign payment systems. At the moment, the government is actively trying to legislate their status, principles and rules of operation on the territory of our country. As a result, PS can leave the Russian market at any time, and in this case there will be additional difficulties with the refund.

(c) Published in Finance