11 currencies, 28 ways to pay: localised messaging is the answer to conquering EU markets
31 May 2018
By Moritz Povel, Senior Account Manager, Withpr
As the EU and its member states are working hard to create a single payments market in terms of regulation, the real challenge for companies looking to expand to new EU countries is understanding different local attitudes towards payments – and communicate accordingly.
KYCC – Know Your Customer’s Culture
Ok, Mark Zuckerberg maybe went a step too far on this last week: “There are specific points about history in Europe. If you’re a German citizen and you grew up here you’re worried about the Stasi [former East German secret police]. That’s more recent in your memory than what we have in the US or other folks around the world.” However, what he was trying to express was the realisation that, no matter how strong EU policy makers may push towards a single regulatory regime, you have to take into account how your product resonates in the context of your audience’s different history, attitudes and behaviour – in short: culture. What Zuckerberg has done is something that at Withpr we have termed KYCC – Know Your Customer’s Culture.
We are all aware of the successful sale of Europe’s iZettle to Paypal a few days ago. How does such a modern payments business go about tackling “culture” in its messaging? iZettle bases its cross-market strategy on the “great market potential as there are 28 million small businesses in our markets, many of which are tired of being underserved by traditional financial players.” But it is only scratching the surface with these statements as each of those 28 million businesses from a variety of countries will feel ‘underserved’ in very different ways.
Localised global messaging is the answer for b2b, b2c and investor audiences
Since 2015, EU consumers and businesses have been left with only around 11 currencies (there are a few unofficial additional ones). At the same time, differing attitudes towards payments in the 28 different EU member states continue to persevere. It might be true that a slightly broad-brush approach towards being ‘underserved’ won’t put anyone’s back up. But it also risks not meaning anything particularly specific to anyone.
The unmissable fact for a payments business remains that seemingly similar EU countries and economies will have very different approaches to the way in which people handle their money – even if they are situated right next to each other: in 2016, Belgian consumers made almost 50% of their transactions using cards. Taking a look across the border to Germany, we see that the eternal saga of card celibacy continues. Here, cards accounted only for around 19% of all transactions.
But not only consumers will react different to payment messages across countries. From a b2b perspective, the fact of the matter is that a small business in Denmark, where there were around 23 card terminals per 1,000 inhabitants in 2016, will respond to very different messages than a small business in a country like Spain, where there were over 32 terminals per 1,000 inhabitants (calculations based on Statista.com). In Spain, messaging would probably indeed focus on the fact that alternative providers are a better solution than traditional payment companies to win over customers from competitors. When it comes to Danish businesses (especially retailers), a drive to expand the network of available card terminals by pointing to the benefits of digital payments will probably need to play a greater role – something that has indeed been vehemently pushed forward in the past years by a narrative to establish the first cashless society in Denmark.
Finally, payments companies should be very aware that also international investors will be listening to their messages with a set of very different cultural filters. A few years ago, a team of researchers conducted a very insightful study asking European VCs about their income expectations in order to explore the influence that different economic cultures can have on these seemingly similar investor businesses. While the study found that VCs across Europe are fighting a general “overconfidence bias within the venture capital community” (that’s no bad news for startups!), it found that French investors seem to be much more cautious in their forecasts, as they were not expecting as many outstanding high-risk/ high-reward deals compared to their UK counterparts at the time of the survey. Other popular theories such as The Varieties of Capitalism between liberal market economies such as the UK, highly coordinated market economies such as the Nordics or mixed market economies in Southern Europe play into that theory – and should play into your investor messaging if you are keen to attract a wide variety of capital.
What it all comes down to
It all comes down to this: The EU payments market is not a single market, and won’t be a single market for many years to come. This is true for regulation and government oversight, but it is especially true in terms of your audiences. To you, this means that you will need to account for this fact by localising your messaging when it comes to your b2b, b2c and investor comms.
A tip from experience: Localising messaging while keeping control of your overall narratives is done most efficiently by one international team, rather than many single national teams. Next to saving money, it also means that you will be able to gain locally tailored variations on a theme, while saving yourself many a headache.