When growing your eCommerce or online business’s international footprint, there’s a lot to think about.
How will you get your brand noticed? Will you need to join forces with a new supplier? Are there any regulatory barriers to overcome?
With so much to consider, it’s hardly surprising that businesses often overlook the question of local payment methods i.e. how people in a particular country or region prefer to pay. Such an oversight, however, can lead to poor checkout conversion rates and fewer sales.
In this article, we explore the importance of taking a local view of different payment methods and the advantages for your business.
What are local payment methods?
Local payment methods are payment options used in a certain region or country. They differ from global payment methods, like universally accepted credit cards, by catering to the unique preferences of customers in that location.
Popular payment options and local providers
These different ways of paying are available around the world. However, in some countries, a local provider handles a large volume of the transactions.
eCash – In some parts of the world, consumers are opting to use cash to buy goods and services online. In fact, Paysafe’s 2023 payment trends report shows that eCash has grown in popularity since 2017.
The eCash brands that consumers know and trust change by region. For example, paysafecard and Paysafecash are widely used in Europe. Whereas in South America, PagoEfectivo is a popular choice.
Digital wallets – A digital wallet is an app that securely stores your payment information or money so you can easily access funds to pay online. Many consumers see this as a more private and secure way to pay, as you don’t need to share your personal information or card number to make a purchase.
While some digital wallets, like Skrill, have a global customer base, others dominate in specific countries. Alipay, for instance, is the most popular e-wallet in China, with 652.4 million monthly users.
Bank transfers – The option to pay by transferring funds directly to a business’s bank account is popular across regions.
However, depending on where you’re attempting to grow your business, you may find that there’s a go-to provider for bank transfers. Generally, this provider will have an extensive network of relationships with the local banks that they can leverage to serve local customers.
In Poland, there’s BLIK, a mobile payment system that’s been incredibly successful. Allowing customers to transfer funds easily and securely using their mobile banking app, BLIK facilitated 455 million transactions worth 63 billion PLN ($15.7 billion USD) between July and September 2023.
Buy now, pay later (BNPL) – Short-term financing options that let consumers make an upfront payment and pay off the rest of the purchase in instalments have grown exponentially in recent years. By 2028, the global market is set to reach a compound annual growth rate (CAGR) of 44.6%.
While some ‘buy now pay later’ brands, such as Klarna and Afterpay (known as Clearpay in Europe), offer services across continents, there are others attempting to corner local markets. For example, Czech banking app Twisto focuses on the Czech Republic and Poland, where the BNPL market is in its early stages.
Why accept local payment methods?
Adding local payment methods to your checkout will give your business a boost, especially in places where card payments are less popular. Here are three reasons to include them in your go-to-market plan.
1. Raise customer confidence: When launching in a new country, it takes time to grow brand awareness and earn people’s trust. Offering the payment options that people are accustomed to seeing helps position your brand as legitimate and in tune with local needs.
2. Gain a competitive edge: If your competitors are yet to provide local payment methods, adding them to your checkout will incentivize customers to buy from you instead. Tailoring the payment experience by country can also encourage repeat purchases, with customers drawn back to brands offering their preferred way to pay.
3. Increase transaction success rates: Local payment providers will often work closely with the banks in their region to improve payment acceptance rates. As a result, they can deliver a reliable service.
Harnessing the power of local payments
Taking advantage of local payment methods doesn’t need to be hard work.
With Paysafe, you have access to more than 250 payment methods across 120 countries, including a range of local options – all through a single integration.
So, wherever you take your business next, it starts with Paysafe.
