A Payments Q&A with Erik Hiddes
What are some of the challenges organizations face when expanding into new markets, specifically in terms of payment and currencies? Why do these challenges exist?
Consumers like to make payments in a way that is familiar and convenient to them, no matter where they are located. To meet this need, organizations expanding into new markets need to be aware of the differences in preference by country, age group and even per product or service. Local payment methods are important as they offer the advantage of comfort, convenience and security for the consumer, making it easier for people to complete a transaction and purchase goods without being faced with an unfamiliar process. It also increases in customer trust – if an organization is able to offer local payment methods, customers are more likely to see them as legitimate, and thus more likely to make a purchase.
On the business side, local payments are guaranteed payments, and decrease the risk of lost money for the organization. Further, most local payment methods charge a standard fee per transaction, which is cheaper than non-local methods that charge a percentage of the transaction amount.
Offering local payments also eases the process of tax compliance, which is perhaps the most crucial aspect to consider. Accounting can present a challenge to multinational businesses who may be liable for corporation tax abroad. Different tax systems, rates, and compliance requirements can make the accounting function of a multinational organization significantly challenging.
How can financial management services diffuse these difficulties? How does ModusLink’s offering do this specifically?
The ModusLink Payments Gateway, combines the most extensive global network of local payment options, with 350+ card acquirers and alternative payment methods, across more than 160 countries, with a feature-rich suite of payment processing, integral risk checks, mobile solutions, integration and onboarding, as well as advanced business intelligence tools. And we’re not done yet – we’re currently working with various acquirers worldwide to set up new offerings and expand existing offerings further. One single integration point combines our unified, RESTful open API architecture, responsive platform, bundled value-added services, and self-service developer portal to lower IT set-up costs.
Our proven expertise enables organizations to easily implement comprehensive end-to-end solutions. When a customer works with ModusLink to expand globally, we take over nearly every aspect – from the legal entity to tax compliance to banking infrastructure. We also manage risk and fraud, defending chargebacks, managing e-invoices and tax compliance and handling terms & conditions and privacy policies, all while customers maintain ownership of their products and goods.
What are your predictions for e-commerce in 2018? What were the top trends in 2017?
It may sound like old news, but mobile shopping has been growing for some time now and it’s not set to stop. In 2014, mobile commerce made up 11.6% of the US total e-commerce sales. By 2020, this is expected to progressively climb to 45%. If that isn’t enough, Google is now indexing mobile-friendly sites and pages first, and mobile traffic has overtaken desktop.
More important however, and particularly changing the landscape for 2018, is the rise of the smartphone. Smartphone sales are expected to account for 51.5% of the total mobile and tablet market in 2018. The rise of mobile is far from dead; it’s just the beginning.
How can small to mid-size businesses looking to break into the e-commerce industry compete with giants?
Small and mid-size businesses have always been intimidated by the prospect of moving into the global sphere due to tough competition from e-commerce giants like Amazon and eBay, but thanks to the rise of e-commerce and the popularity of third party vendors, it is now easier than ever for them to do so. Whether it’s specialized e-commerce website builders like Shopify, Wix and Magneto, payment solutions providers like PayPay, Paysimple or Stripe, or supply chain vendors that can do it all, there are now relatively few barriers to setting up an e-commerce site.
About Erik Hiddes
Erik Hiddes (Manager,Financial Management Services, E-Business) has been a part of the ModusLink team for more than fifteen years, and has been an integral part of the organization’s move into the e-business and financial management sectors. He has played a critical role in ModusLink’s global expansion, helping to set up an office in Singapore. In his current role as Manager of Financial Management Services and E-Business, Erik continues to be a key part of ModusLink’s expansion, working closely with the Latin American and Chinese supply chain communities.