Alternative payment methods in Asia and Latin America: your key to success in emerging markets
Despite the popular opinion in the CIS and EU that having a bank card is very convenient and beneficial, there is a completely opposite point of view in the other part of the world. Users from Asia and Latin America are unlikely to prefer payment by card when they can use favorite electronic wallet or even cash. And many of them do not have bank cards at all. Why these trends take place and what exactly are alternative payment methods? Talking in today’s article.
What is an alternative payment method?
An alternative payment method is a payment method whose algorithm is different from payment by a bank card. Basically, it’s anything that is not card acquiring.
Alternative methods include:
- Electronic wallets: examples of such wallets are Srkill, Astropay, Alipay, PayPal. The essence of a wallet is quite simple — you need to top up your balance in any available way, for example, by card, and as soon as it appears in the wallet, immediately make payments. Electronic wallet acts as an intermediary between payer and merchant, as a kind of buffer, processing payments. This payment method is interesting for players primarily due to privacy and security of personal data it provides. Since when paying with a wallet, player will not need to enter their card details directly on the casino website. It is enough to simply log into the wallet account and make payment to online casino's business wallet. A large number of users choose to make deposits and receive withdrawals in this way, so almost all popular wallets are present on gaming platforms.
- Mobile payments: payment from a mobile phone balance is extremely popular in Kazakhstan, as well as in Africa. Convenience and speed that this payment method provides attracts more and more audience. To pay, you need to enter your phone number, desired amount, and receive an SMS to confirm the charge. Just these few steps and all done, you are ready to enjoy the game. Simple, fast, and accessible to everyone.
- Bank transfers: direct transfers from account to account or automated online banking. Massive rise in bank transfers, as well as payment systems based on their technology, is the reality of emerging markets today. Thanks to strong ties between banks and advanced technical component, there is no need to worry about transaction security. At the same time, speed of the transfer sometimes can take several hours or even days — this negative factor not all countries have been able to overcome; therefore, fewer players choose to pay by bank transfer. However, where bank transfers are immediate — they are more popular.
- Cash payments: payment through terminals or payment acceptance points is very popular in southern countries. For years, many residents of Latin America did not even have a bank account, and the only available way to pay for an online purchase was cash payment at a payment acceptance point (for example, 7eleven). Today, many users continue to use this payment method, not because of unavailability of banking services, but because of their own convenience and habit.
Payment habits in Asia and Latin America
Asia is a large and promising region with dominating share of alternative payment methods. When talking about China, impossible not to mention electronic wallets WeChat Pay and Alipay. Chinese payment infrastructure is simply impossible without these giants. WeChat Pay, integrated into the messenger app WeChat, is a wallet that allows users paying for goods and services and making transfers to each other within WeChat. The number of wallet users exceeds one billion and this figure does not intend to stop increasing. Alipay also offers similar technology, offering payments through a QR code. This system is as well popular in China alongside WeChat Pay. Bank cards or accounts can be linked to wallets, being actual source of funds, but using the wallet infrastructure is more convenient for Chinese people and they are not choosing card payments in e-commerce for shortening the way.
India with UPI and PayTM wallet shares similar trends. The country has well-developed fintech and many startups in this area, which show higher and higher results every year. UPI is practically a monopolist in the Indian market, and you definitely need this payment method when targeting India. Southeast Asia is teeming with diversity: the most popular are cash payments through agents and wallets. Malaysia, Thailand, Indonesia, Vietnam, Philippines — each of these countries has its own unique payment infrastructure with interesting features. The only thing they have in common is almost complete absence of bank card payments and a preferential choice of wallets and other APMs.
Latin America has attracted attention of many online casinos in recent years, and there’s clear reason for that. Densely populated and promising countries with a playing approach to life are the best possible audience for gambling project. Nevertheless, before seriously considering to expand your business in the continent, study payment systems and methods that dominate the market.
Brazil and Argentina, the main target countries of all, have their own distinctive features. Brazil with Pix breaks all records for the number of transactions per day and the number of users. Mechanism of QR code appealed to Brazilians and now covers almost 90% of all payments in the country. Popular in Mexico, electronic wallets Mercado Pago and Oxxo Pay, in addition to the usual card payments, also illustrate the audience's commitment to APMs and a preference for mobile and simple payment options. Argentines most often prefer cash payments and transfers through collection points, as well as mobile payments through Pago Fácil.
Along with Latin America, Central America is becoming an increasingly interesting direction for business and it also has its own payment habits. Guatemala, Panama, Paraguay, Uruguay, Bolivia and other countries in this region have similar patterns in the formation of local payment methods. Bank transfers, wallets, and mobile payment systems are widely spread in the region and account for a large share of all payments. Ignoring this when expanding into these regions, means losing a large portion of your audience.
Why alternative payment methods are so popular
Popularity of alternative payment methods (APMs) is explained by several factors and is a reflection of changing user needs and rapid technological development.
These methods offer a number of advantages over traditional bank cards, making them an attractive choice for an many people. It is important to note that development of alternative payment methods market creates new opportunities for business too. After all, this is a chance to better understand your audience and show approach to customer needs.
Among the main reasons why users choose APMs:
- Availability: many of these methods are available to those who do not own bank cards.
- Convenience: payment is fast and easy.
- Security: many payment methods offer a high level of protection.
- Local specifics: alternative payment methods take into account features and preferences of the local population.
- Wide choice: there are many alternative payment methods, which allows to choose the most suitable option and not opt for those not appealing.
- Control over expenses: users can easily track their expenses and manage finances. At the same time, in banking applications, often it’s too difficult to figure everything out and get a full-fledged statement of all costs. In many European banks, you will still have to visit bank branch for it, which is completely unfamiliar to an Asian APM user.
- Low entry cost: for using many alternative methods, no need to open a bank account or have a positive credit history. On the other hand, opening a bank account can become a difficult task in many countries, especially European ones. This clearly shows advantage of APMs over the traditional banking system and loyalty to the customer.
What to expect from alternative payments in 2024?
Undoubtedly, share of alternative payment methods will grow in the coming years. Primarily because of increase in internet penetration in developing countries, spread of smartphones and growth of online shopping.
Despite the fact that gambling portal has a number of fundamental differences from an online store or simply a business on the Internet, operators are obliged to monitor fintech innovations as well as other businesses. Why does every online business need to connect alternative payment methods?
First of all, this will help to expand the audience. You will be able to serve more of the population that does not use bank cards. And in Latin and Central America, for example, this is the main part. Planning marketing for these countries, pay special attention to the localization of payment systems according to needs of the market. In this case, you can be sure in achieving high approval ratio. Familiar and convenient payment methods increase the likelihood of making a deposit, while unfamiliar international wallets from the EU may turn out to be completely useless. After all, in Asia no one knows them. Offering a full set of relevant methods for the country, you can definitely increase the processing volumes on new markets. Since, visiting the website for the first time, every user pays attention to its content; and payment methods play important role. If a user from Brazil finds the local currency Brazilian real and familiar PIX on the website, he will immediately understand that this website is intended for Brazilians. And this means that he has come to the right place. Otherwise, he may not catch the focus of your product on this region and turn to looking for more obvious options.
Of course, localization for the right countries and availability of the right APMs will affect overall competitiveness of your product. You will be one step ahead of your competitors by offering convenient and modern payment methods that are needed to your players. In order to always know where the market is moving, you need to conduct constant analysis and keep abreast of industry news.
Often merchants do not have enough time and free hands for this in the flow of developing own startup or active operation of an established project. Therefore, Monoup offers market analysis services regarding payment systems and methods so can fully meet your needs. To get a detailed analysis of the desired country or region, contact us in any convenient way and instantly get the benefit of the result!
