For many businesses today, ecommerce is no longer a domestic affair. Ecommerce has gone international, spreading to virtually all corners of the globe as more and more brands reach new customer bases and uncover new revenue streams.
Even as the cross-border ecommerce market has grown, the best customer experiences remain those that cater to local shoppers’ preferences, including local payment methods.
In this guide, we’ll take a look at the diversity of local payment methods, the importance of offering the right mix of these methods, and how brands can boost payment localization.
What do we mean by local payment methods?
Preferred online payment methods differ from region to region, country to country. Local payment methods are the payment options that are widely accepted and preferred by customers in a specific geographic location.
However, when we say, “local payment methods,” we don’t mean only different categories of payments—credit cards, cash-based payments, BNPL. While these international payment methods are popular in many regions, what we’re referring to also includes specific, individual, locally available payment methods. These local payment methods are both popular within a region and may be exclusive to that region.
Take the Netherlands, for example. To cater to popular local payment methods in this growing ecommerce market, brands don’t just need to offer seamless acceptance of debit cards, which, led by Maestro, account for about 60% of retail transactions., They also need to account for local payment methods such as iDEAL, a method unique to the country that’s also the most popular way to pay online.
The importance of local payment acceptance
Many businesses recognize the importance of marketing their goods to provide a localized ecommerce shopping experience. Less common, however, is their awareness of the need to localize payment options.
By accepting and implementing local payment methods, businesses can meet the expectations of their customers and provide a seamless payment experience. Indeed, providing this local experience isn’t just a nice-to-have capability, it’s entirely necessary: 77% of global ecommerce purchases are made using local payment methods.
The results of a UK survey show the danger of not offering locally preferred methods, as 44% of UK consumers said they would abandon a purchase if their favorite payment method was not an option.
Furthermore, understanding local payment methods can also help businesses navigate the regulatory landscape of different countries. Some countries have specific regulations and restrictions on certain payment methods, and by being aware of these nuances, businesses can ensure compliance and avoid any legal issues.
Types of Local Payment Methods
There is a wide range of local payment methods used across different countries and regions.
Some common types of payment include bank transfers, cash on delivery (COD), digital wallets, buy now pay later, and peer-to-peer (P2P) payment apps. These types of payment methods often have unique providers or features tailored to the local market, offering a combo of convenience and familiarity for customers.
In a country like China, where credit card usage is not as prevalent as in Western countries, alternative payment methods such as Alipay have become the go-to options for online transactions. By integrating these local payment methods into their platforms, businesses can tap into the vast Chinese ecommerce market and cater to the payment preferences of Chinese consumers.
While no single market compares with the Chinese ecommerce space, opportunities abound across the burgeoning world of global ecommerce—so long as you’re able to offer the local payment methods that shoppers prefer. Learn more about the specifics of selling into ecommerce markets around the globe, including which payment methods are especially popular, with our library of country guides.
Discover how Digital River can help you maximize conversions by offering your customers the payment options they’re looking for, wherever your products are sold. Connect with us today to see how one simple integration makes it all possible.