With global ecommerce growth continuing unabated, and expected to reach a whopping $7.9 trillion in value by the end of the decade, opportunities abound for your business. But with top-line growth numbers like that grabbing all the attention, it can be easy to overlook the fundamentals that make growth possible.
Take global payments, for instance—those (seemingly) routine transactions that power worldwide ecommerce revenues. Global ecommerce may be headed in one direction—up!—but the ways people pay around the world are quickly multiplying.
In this environment, flexibility is an essential aspect of any business model. And the ability to accept global payment methods in all their various forms is a foundational element of global ecommerce growth.
Learn what seamlessly accepting global payments can do for your business, and how to approach doing so, in this guide to global payment acceptance.
The importance of international payments
The increasingly global nature of ecommerce opens a world of opportunities for your business. And whether you choose to sell and ship in-market or adopt a cross-border approach, the online payment process is always going to be critical in any customer experience.
If a customer attempts to checkout only to find their preferred method of payment isn’t an option, they’ll think twice about doing business with you. What’s more, you also risk losing their business to failed ecommerce payments—with data showing that online merchants lose over 60% of customers who experience a failed transaction.
The alternative—effective global payment acceptance—can drive essential revenue for your brand and offers a range of other benefits:
- Competitive advantage: It’s a simple fact—if customers can’t pay how they want, they’ll look elsewhere. So, providing a multitude of payment options can serve as a significant competitive advantage, differentiating your ecommerce platform from others that do not offer as much flexibility.
- Expanded customer base: By catering to broader demographics and various local preferences, your business can increase its potential market reach. It can even help unbanked and underbanked populations without access to traditional banking systems in many regions access your products.
- Enhanced customer satisfaction: Even if a customer goes through with a transaction using a less preferable method, they’re likely less satisfied with their experience. Improve on this and inject your shopping experience with maximum flexibility and convenience to not only gain but retain more customers.
Types of global payment methods
What do we mean when we say global payments? Well, this refers to an ever-evolving—and lately, increasingly diverse—list of possible payment methods used around the world. The types of global payment methods that businesses should strive to accept globally include:
- Credit and debit cards: For many businesses, accepting credit and debit cards is already a no-brainer. And credit and debit-based purchases still dominate in much of the world.
- Digital wallets: It’s actually digital wallets, though, that are now the most popular method of payment globally. Offering a quick and convenient way to pay online, digital wallets are particularly popular in regions with high smartphone penetrations, with options like Apple Pay, Google Pay, and PayPal dominating in the West and China’s digital payments revolution, largely driven by Alipay and WeChat Pay.
- Account-to-account (A2A) payments: Direct electronic fund transfers are also popular worldwide, with regional systems driving many payments in places like Australia, Mexico, and the Netherlands and cannibalizing the use of cash and check-based payments. For instance, the bank transfer system iDEAL in the Netherlands reached 70% of the online payment share in the Netherlands in 2021.
- Buy now, pay later (BNPL): Options like Klarna, Afterpay, and others enable consumers to spread purchase costs out over time, typically without interest charges. Having surged in popularity in the US and Western Europe, BNPL options are continuing to rise in emerging markets like India. The number of global BNPL users is expected to reach over 900 million by 2027, up from 360 million in 2022.
- Mobile money: Mobile money systems, such as M-Pesa in Kenya, have revolutionized payments in regions with limited access to traditional banking infrastructure. They allow users to store and transfer money using their mobile phones, opening up ecommerce opportunities to previously untapped markets.
- Cryptocurrencies: Decentralized digital cryptocurrencies are growing more common around the globe. And data released in 2022 showed that nearly 80% of crypto consumers had previously used Bitcoin for payment.
- Cash-based vouchers: Using cash-based vouchers, customers receive a scannable voucher with a reference number that they can then bring to an ATM, bank, convenience store, or supermarket to complete the payment in cash. Accepting cash-based payments remains critical to serving markets with large unbanked populations, like Mexico and Indonesia.
Accepting global payment methods: accommodate customers & drive growth
Successfully accepting a diverse range of global payment methods requires strategic planning, technological integration, and ongoing management. Here’s how your ecommerce business make it happen.
Understand the Market
Every country has a preferred payment method, but it varies drastically from country to country. It’s crucial that you’re able to offer the right mix of payment options in a given geography. So, to boost global payment acceptance, start by researching and understanding payment behaviors and preferred methods in your target markets. Set priorities with a data-backed approach and the right international ecommerce expansion strategy.
Consider the Entire Payment System and Experience
Accepting global payments is about much more than simply offering customers the right options. To optimize for global ecommerce payments, you need to deliver localized experiences and payment localization, offering the sort of content and localized currencies that shoppers prefer to see.
Additionally, you need to think about the system that supports your shopping experience. That means having the right systems and processes in place behind the scenes, delivering frictionless shopping, payment, and shipping experiences no matter how they pay.
An essential part of this holistic approach is having local entities in place that can not only support preferred payment options but simplify tax and compliance, as well as shipping and customs concerns. This way, even if you’re selling globally, you can deliver a complete local experience.
Your partner for payments—and rapid global growth
Delivering a successful end-to-end experience and accepting an increasingly diverse array of global payments can be a complex process—and an expensive one. However, working with the right global payments partner can change all that.
Digital River offers a global online payments platform as part of its merchant of record solution that’s engineered to maximize conversions and grow revenue. Don’t just accept locally preferred payment methods in your new target markets; lower your processing fees and save time by tapping into an expansive network of local entities and acquiring partners. With a single, simple, drop-in integration, you can quickly accept payments globally. With Digital River as your global ecommerce partner, it’s easier than ever to go to market in new places around the world—and take your business to the next level.