Traditionally, merchant expansion into international markets has been fraught with challenges from the payments side. The multitude of contracting needs and technical integrations required, combined with wide variations in payment habits and local market expectations often combined to prevent ISOs, Acquirers and merchants from expanding their CNP payments offering beyond international cards, and perhaps one or two of the "mainstream alternative” payment types. The result has been lost customers, lower conversion rates, and foregone opportunities. This, however, is changing. As North American merchants are pushing their payment providers to “follow them” into European, Latin American and Asian markets, the payments industry has responded with new technology, new services and new solutions that go a long way toward reducing the complexity, time-to-market and effort required for payment providers to “go international.” This presentation will look at the ways these international payment challenges are being overcome by globally-focused industry players, and will spark discussion regarding the right strategy for following merchants to new markets quickly, cost-effectively, and successfully.

1. Keys to Frictionless International Payments
Acceptance
May 19, 2014 | CNP Expo, Orlando
Adam Bowman, VP, Sales and Business Development
PAY.ON America Inc.

2. WHO IS PAY.ON?
enables your payment business
Global, white-label, payments infrastructure
provider
a neutral partner
No direct contractual agreements with
merchants

3. Subsidiaries
New York
Hongkong,
Salzburg,
Sales Offices & Partners
Umea, Moscow,
Sydney, Paris
Data Centres
London, Munich
Headquarters
Munich
LOCATIONS

4. Why aren‘t all payment providers already
international?
The friction points inhibiting „going international“...
• Which currencies?
• Which countries?
• Which payment types?
• Which channels/POI?
• Which languages?
• What commercials?
• What technical architecture is needed?
• What local support?
• What level of service?
• What go-to-market strategy?

5. offering the suitable payment setup
in every region and market
offering a customizable payment
infrastructure reflecting the merchant’s
or PSP’s business model
payment processing through
all channels and devices
Significant progress is being made toward
„frictionless“ international payments
Payment solutions in 3 dimensions

6. offering the suitable payment setup
in every region and market
offering a customizable payment
infrastructure reflecting the merchant’s
business model
payment processing through
all channels and devices
Frictionless payments provided to merchants
by 3-dimensional solutions

7. Source: CyberSource
Frictionless payments:
1st Dimension: Suitable payment setup
Choose the right set of local and industry
specific payment methods
Choose the right set of local and industry
specific fraud prevention tools
14% lift Up to
25% lift14% lift
Up to
25% lift

8. Prevalence of payment methods vary country to country.
Data are not complete, sample data only.
Frictionless payments:
1st Dimension: Suitable payment setup

9. Data are not complete, sample data only.
Suitable fraud prevention tools vary by country, segment and payment method
Frictionless payments:
1st Dimension: Suitable payment setup

10. Data are not complete, sample data only.
Suitable fraud prevention tools vary by country, segment and payment method
Frictionless payments:
1st Dimension: Suitable payment setup

11. Alternative payment methods
• providing local payment
methods to
international merchants
selling to Brazilian
consumers
• one solution across the
region
Brazil
Mexico
Colombia
Peru
Chile
Venezuela
Argentina
and other
banks
national
national
Frictionless Payments case study:
allpago payment methods in Brazil
Credit and debit cards
Source: allpago

12. 20%
+ 49%
+ 31%
80%
Increase in
market
penetration with
allpago bringing
local payment
methods
Payment penetration
without allpago providing
local payment types
Frictionless Payments: allpago growing merchant
revenues through increased market penetration
boleto bancário and others
international credit cards
international international
international
international
national credit cards
national national
Source: allpago

13. Credit Cards Boleto Bancario
100,00 USD
-17,88 USD
-6,99 USD
75,13 USD
100,00 USD
-17,88 USD
-4,30 USD
77,82 USD
15,00 USD
90,13 USD
15,00 USD
92,82 USD
Revenue
Taxes
Cost & Fees*
Remitted Revenues
Taxes Recovered via allpago
Net Revenue
Total Net Revenue 90% 93%
*Excluding technical transaction fees of 0.25 USD per transaction
Frictionless Payments: allpago growing merchant
revenues by ~20% through local tax recovery models
Source: allpago

14. offering the suitable payment setup
in every region and market
offering a customizable payment
infrastructure reflecting the merchant’s
business model
payment processing through
all channels and devices
Frictionless payments provided to
merchants by 3-dimensional solutions

15. Merchant dashboard
Frictionless payments:
2nd Dimension: All channels and devices

16. Today
Consumer behavior changes due to the increasing use
of smartphones and tablets
In 2013, more people used
mobile devices than
desktop PCs or laptops for
online retail (55% vs. 45%) .
By 2018, mobile commerce is
expected to grow globally to
nearly 5 times its current size.
In the US, by 2018 mCommerce will
generate 32% of all eCommerce
business, with a value of $131
billion (3X current levels).
32
o 76% of US smartphone users use
their devices while shopping
o In 2013, US holiday shopping on
mobile devices increased by 40% vs.
2012 to 29% of total on-line sales
o Over 80% of US mobile commerce
sales over the 2013 holiday period
were placed by iOS users.
Frictionless payments:
2nd Dimension: All channels and devices
Sources: Goldman Sachs; PRS; IBM; ComScore

17. The blurring lines (and understanding) of
“mobile payments” and “mobile commerce”
Source: Payworks
Description
Processing Type Card Not Present Card Present
Merchant Type Offline Merchant
Mobile at POS
Shopper uses mobile wallet to
purchase goods at POS
Mobile
Wallet
Mobile as POS
Merchant uses mobile app to accept
card payments
Mobile
Chip & PIN
POS
Merchant uses POS terminal to
accept card payments
Traditional
POS terminal
Example

18. Frictionless payments case study:
Opentabs

19. offering the suitable payment setup
in every region and market
offering a customizable payment
infrastructure reflecting the merchant’s
business model
payment processing through
all channels and devices
Frictionless payments provided to
merchants by 3-dimensional solutions

20. Every currencyEvery language
Individual dashboards
Every channelEvery peak
Recurring payments
Managed services
Consultancy
24/7 support
Local data
protection
jurisdiction
Every country
eCommece
platform plugins
One choice – no restrictions
Always PCI compliant
Local expertise
One reporting
Every ERP
integration
100%
reconciled
Frictionless payments:3rd Dimension:
Customizable payment infrastructure

21. Frictionless payments
Benefits for merchants
More revenues
• Increasing conversion rate
o up to 40% using local card acquiring
o up to 30% suitable local payment methods
o up to 15% One-page checkout process, Dynamic 3D secure, Recurring billing, ...
• All channels, from eCommerce to mCommerce, mPOS to POS
• A customizable payment platform to cater for individual needs
Source: PAY.ON Research

22. Reduced costs
• Lowering the total cost of acquiring
• Using advantages of local collecting PSP models
• Using local and industry-specific fraud prevention tools
• Saving server maintenance and PCI costs
Frictionless payments
Benefits for merchants

23. offering the suitable payment setup
in every region and market
offering a customizable payment
infrastructure reflecting the merchant’s
business model
payment processing through
all channels and devices
Frictionless payments: 3-dimensional solutions
Main take-aways
International coverage, deeper channels, flexible
architecture…more easily achieved than ever before.

24. Thank you!
E-mail: adam.bowman@payon.com