As global ecommerce continues to grow and international markets hit various stages of maturity, payments have become more important than ever.
How you accept, process, reconcile and manage payments — especially on a global scale — has a direct impact on conversions and revenue. That’s because customers expect currency and payments to be localized and tailored to their preferences. Unfortunately for brands, those preferences vary by country and are constantly changing.
In this guide to payment optimization for global ecommerce, offer steps you can take ensure you can keep up. Read on to understand how you can optimize ecommerce payments wherever your business takes you.
What is Payment Optimization?
In our digital world, consumers can complete transactions in an increasing variety of ways — as long as the places they shop support the right payment methods. Payment optimization, then, is all about how businesses implement and improve processes to accept and manage all these payment methods.
So, on the one hand, payment optimization is driven by the customer experience: by implementing the right technologies, processes, and content businesses can optimize the shopping experience to improve customer satisfaction. On the other hand, payment optimization is also guided by business goals: by ensuring seamless payment and checkout – and having more happy, paying customers – ecommerce businesses can ultimately reduce cart abandonment, increase customer satisfaction and retention, and ultimately drive greater revenue and growth.
Tips to Optimize Global Ecommerce Payments
But what exactly does payment optimization for global ecommerce entail? Follow these steps and tips to improve the way your business manages and accepts payments from around the globe.
Deliver localized experiences
While payment optimization in global ecommerce is no doubt concerned with improving technological and logistical capacities, the actual online experiences of customers must also be a key focus. Because while your products might ultimately be the same no matter where their sold, they won’t always be shopped for in the same way.
Website localization is crucial to boosting ecommerce revenue in global markets. As you look to expand into new markets, or optimize your performance in markets you’re already in, consider:
- Developing localized buyer personas
- Launching websites in buyers’ native languages, with special attention paid to local nuances and idioms
- Researching and adapting to local content norms, including updating relevant product imagery
- Creating a localized promotional and holiday calendar tailored to each unique geography
Payment localization is just as important as localizing content
All of these aspects of a local shopping experience are critical to boosting payments. But ultimately payment optimization needs to enable stores to facilitate all the actual ways that people pay, which is itself a locally dependent phenomenon.
Almost 80% of online shoppers prefer to make purchases on sites that show prices in their local currency, and 50% would cancel a purchase if their preferred payment method wasn’t offered. This is why it’s critical that you offer local currencies and payment methods if you want to be successful in new global markets.
Localizing payments is about more than just that, though. It’s about understanding how your payments system fits into the larger context of the market.
People in different countries want to use the payment methods they know and trust. They want the messaging and user experience of the checkout process to be easy and familiar. They don’t want to see their payment declined because it was erroneously flagged as fraud, simply because it’s a cross-border purchase.
This means that in order to drive conversions, companies need to deliver a payment experience that is localized and optimized from end-to-end. To do that, you need to step back and consider your payments system as a whole.
Think holistically: build the right payments system
To get ecommerce payments right, it’s important to understand the difference between a payment method and a payments system. Credit cards and digital wallets are common examples of payment methods. But a payments system is everything that pulls those payment methods together to create the user experience.
In other words, you need to do more than just offer popular local payment methods like Alipay in China or Clearpay in the UK to be successful in those markets. You also need to have the right back-office systems in place to handle all those different payment methods and the resulting complexity.
By taking a holistic approach to payments as part of a seamless customer experience, you can optimize your conversion rate and create a seamless payments system that ultimately helps drive sales and global ecommerce revenue.
After all, each new payment method you add to your ecommerce site will add even more complexity. That’s why it’s important to bring all relevant personnel to the table early in the process to determine what is needed to support additional payment methods in new markets and how to maintain an optimized payments system.
You should also consider how payments impact the buying experience as a whole. For example, with high-ticket items, you may want to include messaging about financing options before customers reach the checkout page. For smaller items, you may want to offer one-touch purchasing to reduce friction for customers.
Streamline tax, compliance and accounting
A big part of the added complexity that comes with going global is the new tax, compliance and accounting burdens that come with each new location you choose to sell into.
For instance, no matter which payment method a customer opts for, they’re likely to expect upfront transparency about the true costs of their order. Solutions that can deliver guaranteed landing costs in local currencies eliminate surprises for customers and help avoid cart abandonment.
And that’s just one facet of tax and compliance complexities. Beyond calculations, global ecommerce necessitates new exemptions, filings, remittances, invoicing, you name it. All of this requires hiring significant new staff with niche expertise – or simply relying on a global tax and compliance solution equipped to handle it.
Accommodate demand for alternative payment methods
Customer preferences are changing all the time, which means the future of payments is always in flux. That said, the demand for alternative payment methods is driving a number of widespread ecommerce trends.
For example, there is now an expectation in many markets that mobile and web experiences will be the same. That means brands need to have the back-end systems in place so that customers are offered seamless checkout experiences no matter which device they’re using. Social commerce through platforms like Instagram and Pinterest also continues to evolve, adding another challenge for brands who are working to align their marketing and sales strategies.
In trying to anticipate emerging ecommerce trends, perhaps the most important thing to keep in mind is that the more you can reduce friction in the buying process, the better off you’ll be. By creating a smooth purchase experience that meets customer expectations both technologically and culturally, you can optimize your payment processes and global ecommerce revenue in global markets.
Get More Expert Insights
To help brands stay on top of this critical aspect of global ecommerce, we brought together a panel of payments experts for an episode of our Commerce Passport series. Our live virtual event entitled “Deliver a Personalized Shopping Experience: Optimize Payments for Global Conversions” was sponsored by Coveo and speakers included:
- Dale Traxler, Senior Director, Alliances and Channels, Coveo
- Andy Peebler, Vice President Product GTM, Commerce Cloud, Salesforce
- Eric Christensen, Vice President Product and Chief Payments Officer, Digital River
- Mike French, Vice President Partnerships, Digital River
You can also watch an on-demand version of the event here.
Our panel of experts had a lot to say about this important aspect of global ecommerce. To hear more about optimizing payments and increasing conversions in new markets, listen below and subscribe to our Commerce Connect Podcast.
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To learn more about how Digital River can help your brand expand into new global markets, connect with us today.