Are you trying to decide on the right payment service provider (PSP) for your business? At first glance, it might seem like a difficult decision to make – there are an overwhelming number of international PSPs available. However, as an African merchant, it’s worthwhile to choose a local PSP. A local PSP will understand you, your customers and the local market, and can provide a secure payment platform that is more geared towards your requirements.
Here are four fundamental advantages of working with a local payment service provider:
1. They enable you to accept local currencies
A local PSP is more likely to have connections with local acquiring banks, which is an important factor to note when it comes to the currencies you can accept on your website. The currencies your customers can pay you in depends on the currencies that your acquiring bank processes (and the currencies of your merchant account/s). Thus, it is highly beneficial to have a merchant account with a local acquiring bank, which can be arranged for you by a local PSP. This will enable you to accept payments in local currencies, making paying for your goods and/or services much more straightforward for your customers.
Not only does accepting local currencies make your customers happier, but it can also save you from paying conversion fees. Working with local PSP helps you avoid having to convert your customers’ payments from EUR into KES, for example, when it comes time to receive your settlement from the acquiring bank. This also exempts you from having to deal with fluctuating exchange rates, so you have a higher profit margin.
2. They speak your language
A local PSP will be able to converse with you in your local dialect, which is beneficial to both you and your customers. As a merchant, you’ll be able to more comfortably express your business requirements to the PSP in clear detail and in greater depth. You’ll also be able to communicate easily with the PSP’s customer support team when necessary, without any cultural, language, or time zone barriers.
Working with a local PSP can also have a great benefit for your end customers. By using the hosted payment page of the local PSP, you can improve your customer experience and boost sales, as your customers will be able to carry out transactions in their native language (as well as their preferred local payment method, but more on this, below). This will reduce customer frustration and speed up transaction time. A smooth, fast payment process will keep customers happy, increasing your conversion rates.
3. They know local preferred payment methods
A local PSP will be familiar with which local payment methods are the most preferred by your customers. These may include different brands of mobile money, mobile wallets, and prepaid cards. A local PSP will have all of these payment methods, and more, already integrated with their payment platform, so that you can always offer your customers the payment methods they want to use.
Accepting multiple preferred payment methods helps to increase customer satisfaction, and thus improves customer retention rates. According to Bain and Company, a 5% increase in customer retention increases profits by more than 25%. With such impressive statistics, doing whatever you can to increase retention rates, like accepting local payment methods, is worth investing in!
4. They understand local fraud risks
PSPs provide risk management services to protect your business from fraud and keep customer information secure. A good PSP will be PCI DSS Level 1 certified, with high-level measures ensuring your customers’ details are safe. A local PSP will be able to go one step further, as they are also aware of common local fraud schemes.
Thanks to this expertise, the PSP will be capable of differentiating between fraudulent and valid transactions with a high degree of accuracy. International PSPs, who are not equipped with this knowledge, may miss fraudulent transactions or flag and decline valid ones, due to unfamiliarity with local types of fraud.
For example, the greater prevalence of mobile payments in Africa, as opposed to in other parts of the world, has poised local PSPs in the region to be better at identifying and pinpointing mobile fraud attempts, which PSPs in Europe or the USA might miss.
A local PSP, like Direct Pay Online, uses their specialized knowledge of your market to keep your business secure and your customers satisfied, all at a lower cost than using an international PSP.
Connect with us today and reap the benefits.