Cash & Liquidity ManagementPaymentsWestern union and Amazon launch new cross-border payments option

Western union and Amazon launch new cross-border payments option

The new cross-border payments option will allow Amazon customers to shop global and pay local at Western Union centers by cash

Western Union has partnered with Amazon to set up a new cross-border payment option called PayCode, which lets people shop and pay for Amazon items using local currencies that would not have been accepted on the site before.

Western Union’s platform is powering Amazon’s PayCode by processing the complex foreign exchange, settlement and money movement requirements for international e-commerce transactions.

The partnership will provide greater access to online goods for customers who have largely been excluded from e-commerce shopping due to lack of accepted payment methods.

Convenient cross-border online purchases

After selecting PayCode on the Amazon.com checkout page, customers will be sent a code, along with instructions on how to pay in person at a participating Western Union agent location. Payments must be made at a Western Union office within 48 hours of receiving the code, or the order is canceled.

Customers must provide their code as well as a valid photo ID. The Western Union agent will take payment and provide a receipt. Amazon will also send a confirmation email, and purchases will then ship normally.

To qualify for Amazon PayCode, products must be export-eligible, purchased from a supported country, and not exceed a maximum value Amazon has not publicly specified.

Shop global, pay local: Western Union and Amazon launch PayCode

Ben Volk, Director, Payment Acceptance and Experience at Amazon said: “Amazon is committed to enabling customers anywhere in the world to shop on Amazon.com, and a big part of that is to allow customers to pay for their cross-border online purchases in a way that is most convenient for them. Amazon PayCode leverages the reach of Western Union to make cross-border online shopping a reliable and convenient experience for customers who do not have access to international credit cards, or prefer to pay in cash.”

Serving without setting up full-fledged operations

PayCode is a significant advance for Amazon as it seeks to step up to the next level of being a global e-commerce powerhouse to compete against the likes of Alibaba.

Amazon will be able to allow customers to shop without going through the steps of setting up full-fledged operations in those countries to serve those customers and sellers.

Alibaba has made a lot of inroads to work in a wider array of markets beyond its home base of China, specifically tapping into a long tail of supply from its home market and demand for those goods abroad. Alibaba is also taking care of business when it comes to making more seamless transactions related to those trades.

PayCode will enable customers who prefer to pay in cash to shop Amazon.com’s vast product selection. It will be servicing in 10 countries: Chile, Columbia, Hong Kong, Indonesia, Kenya, Malaysia, Peru, Philippines, Taiwan and Thailand.

The only countries where Amazon offers goods in local currencies are the U.S., U.K., Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Spain and Turkey. Amazon also has a Prime-only site in Singapore.

Amazon recently introduced a service called Amazon Cash in the U.S. that works similarly to PayCode, but in partnership with CVS, GameStop, and 7-Eleven store locations.

Potentially big partnership for Western Union

Under the current agreement, PayCode will allow Amazon customers to use Western Union to act as a physical pay station for their purchases and in return, Western Union will be receiving a small cut on the transaction.

Khalid Fellahi, SVP and General Manager of Western Union Digital stated: “We’re helping to unlock access to Amazon.com for customers who need and want items that can only be found online in many parts of the world.

“This is a great example of two global brands innovating and collaborating to bring customers more convenience and choice. In a world where cross-border buyers and sellers are often located on different continents and in completely different financial ecosystems, our platform is ideally suited to solving the complexity of collecting local currency and converting it into whatever currency merchants need on the other end.”

Western Union is working closely with MPesa, the African mobile wallet service that lets people essentially use their phone top-up account as a payment account. A similar deal could get incorporated into the PayCode experience to facilitate buying and paying on devices, without having to go into Western Union shops and use actual cash.

The company’s cross-border, cross-currency money movement platform – including a robust digital footprint, settlement, treasury and compliance infrastructure, a vast global retail network of over half a million locations, and the ability to send money to billions of accounts and mobile wallets – sets the standard for international money movement.

Rise in the need for cross-border payments

Forrester Research estimates that cross-border shopping will represent 20% of e-commerce by 2022, with sales reaching $630 billion.

Recently, SWIFT gpi and the European Central Bank (ECB) trialed instant gpi cross-border payments in Europe using the TARGET Instant Payments Settlement (TIPS) platform and the Monetary Authority of Singapore (MAS) and the Bank of Canada performed the first blockchain cross-border payment using central bank digital currencies and distributed ledger technology (DLT).

Christoph Tutsch, Founder and Managing Director of ONPEX opines: “The growth of eCommerce and mCommerce has resulted in a dramatic rise in the need for cross-border payments. Thanks to the evolution of mobile technology and online retail, consumers are purchasing products from all over the world. As a result, reliable and easy-to-use cross border payments are a key strategic pillar of many business models – without this facility, many businesses would be pushed out of the market by their competitors.”

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