Cloud Storage Subscription Providers Seek To Match Payments To Markets

Demand is rising for online services such as those providing cloud-based backups and storage. The cloud storage subscription market is expected to increase at a compound annual growth rate (CAGR) of 24.8 percent from 2016 to 2022, and uptake is rising even faster in the Asia-Pacific, which is expected to see a CAGR of 27.2 percent from 2016 to 2022. North America and Europe also have presented strong user bases, while demand has been slower for countries with less-developed internet and communication technology sectors, such as those in Latin America, the Middle East and Africa.

Cloud storage subscription providers are required to offer payment experiences that would-be consumers in both developed and underdeveloped nations find convenient and compelling. This can be a tall order, though, as they not only have to cater to the currency and payment demands of their customers, but also must ensure that accepting these methods does not expose either party to fraud.

PYMNTS recently caught up with CEO Tunio Zafer of cloud storage provider pCloud to examine this delicate balancing act and discuss how the company tackles such challenges to serve its 8 million users.

Cryptocurrency And Credit Cards

Switzerland-based pCloud has explored enabling various payments types as it caters to a global user base. The company has found that it can reach most of its desired markets by enabling the acceptance of euro, GBP and USD currencies, and partners with various payment providers to handle international payment needs. The firm also found it necessary to accept cryptocurrency.

“Our target audience is young people, who are open to new technologies and solutions and acquire them easily,” Zafer explained. “Blockchain is very familiar to them.”

Many customers are more traditional, however, and he noted that credit card payments are likely to stick around.

“Credit card payments are currently in high demand, and likely this will grow and grow as new FinTechs provide new services based on credit cards,” he said. “I think credit cards will be on the market for a long time.”

Serving Emerging Markets

Credit cards fall short when subscription providers aim to enter emerging markets. Myanmar and other Southeast Asian countries have demonstrated strong demand for cloud-based services but little appetite for credit cards, Zafer said. Major payment processors such as PayPal or Stripe are not available in many emerging markets, making it critical to explore local options. This means subscription providers must seek out and partner with reliable local payment service providers to ensure customers can pay.

“[It is difficult serving] emergent markets where customers don’t use credit cards or known payment processors at the moment,” he said. “All merchants on the market have to find a new way to get to those clients — to find new local payment methods to collect the money.”

PCloud focuses on payment processors’ supports for currencies when selecting those it needs to serve its global customer base, alongside their ability to handle chargebacks in desired markets and anti-fraud capabilities. The company has thus far been unable to find one processor that can serve all markets and therefore relies on three or four that offer expertise in specific ones.

“We use multiple payment processors because some are really good for some local markets but others are not as good,” Zafer said. “We are trying to find out what payment processor is good in the U.S., which is in Europe [and so on]. There is not one payment processor that is good in all markets, with all requirements, with all currencies.”

Acceptable Merchant Pains

Determining which payment experiences customers most desire is only half the battle. The other is seamlessly and reliably supporting these sometimes difficult experiences. PCloud integrates each new payment processor it selects with the company’s customer relationship management (CRM) system, which Zafer said can be complicated. Systems designed or equipped with supports for easy integrations can reduce such headaches, however.

Subscription merchants may find that the payment offerings that customers want are not always the easiest for businesses to handle. Zafer said his philosophy is that when these two groups’ desires clash, merchants must always bow to customers’ preferences.

“[It should be] very easy for the customers to start paying … no matter how hard it is for the vendors for merchants to support,” he said. “When there is a complicated payment process, it means losing customers.”

Providers must find compelling ways to enable consumers in new markets to pay for cloud storage B2C subscriptions as demand for them increases worldwide. That means catering to popular consumer payment methods in each locale and finding partners that can help extend these transaction methods in safe, easily managed ways to make customers’ experiences more pain-free.