What you need to know about Country Coverage and going Global
Introduction
“We support 145+ countries”.
“We support customers in 160+ countries”
You might have read statements like that online and been impressed at the ‘global’ scale of a technology solution. While “we support customers in 160+ countries” is not untrue, the statement overstates the reach of a business and support for global customers.
I hope this deep dive helps business buyers, investors, or anyone, be discerning about what a provider promises when they state “we support XXX countries”, so you can assess and decide if a solution is “truly global”.
Dissecting “country support”
What “country support” really means
When some businesses write that they “support” 100 countries, it usually means they support payments from cardholders in those 100 countries.
- For example, it means the business accepts card payments (debit, credit or both) from customers based in those countries.
- I won’t dive in into all the specifics of how, but the short answer is that businesses are connected via acquirers to the global Visa/Mastercard/Amex network, and hence (with some limitations like sanctioned countries, risk approvals) process all Visa/Mastercard/Amex issued cards.
The underlying assumptions behind “country support”
The underlying assumptions behind “we support XXX+ countries” are
(1) Cards are commonly used and widely available
(2) Card are the preferred way to pay, in all of the XXX countries.
Assumption 1: Cards are common and widely available. This assumes that most of the population is banked, has credit scores, and has cards issued from the banks they deposit with. However, card penetration (the % of the population that owns 1 or more cards) can be <2% in markets like Indonesia, Vietnam. This applies to Latin America too (guide).
Assumption 2: Cards are the preferred way to pay. Even if the banked population was fairly high and many own a debit/credit card, consumers choose between payment methods, and lean towards local payment methods (bank transfers, digital wallets) because of habit, costs, and convenience.
The two assumptions above are untrue because the world and payments landscape are incredibly diverse. In many markets, cards do not dominate.
Countering the assumptions
Counter to Assumption 1: Non card payment method are common and more widely available in many markets. For example, Alipay and WeChat Pay in China, IDEAL in the Netherlands, or vouchers in Brazil (and now PIX). Even where card penetration is higher — cards used might not be Visa/Mastercard, but separate local low cost debit networks.
Counter to Assumption 2: Non card payment methods are the preferred way to pay in many markets. As mentioned above, even if people have cards, it’s not the preferred way to pay. For example, although the number of cards per capita in Germany is comparable with that of other European countries, domestic card usage is comparatively low (source).
There are so many assumptions behind the assertion that accepting cards from X countries is truly making payments available for X countries. See below for each assumption.
Therefore, accepting just card payments in 100 countries does not mean you are “supporting” customers in those 100 countries.
Evaluation tips
Here are recommendations for the payments buyer, investor, or anyone evaluating a business’s “global” reach.
- Dig into the details: Ask what “we support XXX countries” means. Does your payment or on&off ramp partner have the payment methods relevant to your target consumers? Or do they support cards issued in 160+ countries, of which more than half of the countries in the list has low card penetration and usage ?
- Prioritize ruthlessly: When you go global, narrow down the regions/markets you’re most interested in, to understand consumer preferences there. You don’t have to support “160” countries if you aim to crack 20 at first.
- Think local: If you are from a card dominated market (US, UK, AU, SG etc), it is easy to fall into the trap of thinking every other market is like yours. Think hyper local — go spend time in market, talk to in market experts, talk to people from that market, and challenge your assumptions. Monitor the card payments data from the markets you activate. There will be great learnings.
