Fee Comparison: Global Payment Aggregators vs. Local Payment Providers in Emerging Markets

In emerging markets, where cross-border payment fees are generally higher than in the rest of the world, the cost of payment processing can have a significant impact on a business’s bottom line. High transaction fees can erode profits, particularly for small to medium-sized enterprises (SMEs) that operate on tight margins. This article takes a closer look at the fee structures of global payment aggregators versus local payment providers, and why choosing the right provider can result in significant cost savings.

Fee Structures in Global Payment Aggregators

Global payment aggregators are widely recognized for their extensive networks and the convenience they offer, allowing businesses to process payments from customers around the world. However, this convenience often comes with a hefty price tag that may not be sustainable for businesses in emerging markets.

• Layered and High Fees: One of the primary challenges with global payment aggregators is their complex, multi-layered fee structures. Each transaction often involves multiple intermediaries, each of which adds a fee to the total cost of the transaction. This can result in businesses paying much more than anticipated, particularly when processing cross-border payments.
• Currency Conversion Charges: For businesses that operate across different countries, currency conversion fees can add a significant burden. Global payment aggregators typically charge a premium for converting funds into different currencies, which can be particularly costly for businesses in emerging markets that frequently deal with international transactions.
• Hidden and Additional Charges: Beyond standard transaction fees, global payment aggregators often impose additional charges for services such as refunds, chargebacks, or the use of specific payment methods. These hidden fees can quickly accumulate, further increasing the cost of doing business through these platforms.

Fee Structures in Local Payment Providers

Local payment providers like Cadana offer a more transparent and cost-effective alternative, particularly for businesses focused on maximizing their profits in emerging markets.

• Lower Transaction Fees: Local providers often offer lower transaction fees by eliminating unnecessary intermediaries and leveraging local banking relationships. This not only reduces the overall cost of transactions but also makes it easier for businesses to predict and manage their expenses.
• No Currency Conversion Fees for Local Transactions: Many local providers operate within the local currency framework, eliminating the need for costly currency conversions. This can be a significant advantage for businesses that primarily operate domestically or within the same currency zone, allowing them to keep more of their hard-earned revenue.
• Transparent Pricing: One of the standout features of local providers is their commitment to transparent pricing. They offer clear and straightforward fee structures, ensuring that businesses know exactly what they’re paying for without the fear of unexpected charges. This transparency helps businesses manage their budgets more effectively and avoid costly surprises.

Summary

While global payment aggregators may provide extensive services, the associated costs can be prohibitive, especially for smaller businesses. When comparing fees, it’s clear that local payment providers like Cadana offer a more cost-effective solution for businesses in emerging markets. By choosing a provider with a focus on local markets, businesses can benefit from lower fees, transparent pricing, and a cost structure that is better aligned with their financial goals, ultimately allowing them to retain more of their profits.