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Global Means Local: How Local Payment Methods Can Grow Your Business

Boaz Gam

Boaz Gam

CEO

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20.12.2021
15 min
Regional Success Why Local Payment Methods Are Important Does Culture Really Impact Online Payments? Payment Kaleidoscope: Local Payments & Their Types
Payments with Benefits What is Popular in the Regions? How to Accept the Local Payment Methods? It’s Pay Time

Regional Success

Businesses are no longer limited by geography. Entering the global market has never been easier, all thanks to eCommerce.

You can easily set up a store, boutique or a service using a popular social media like Instagram, and attract customers from different countries — the whole operation may take just a few hours.

But there’s also a significant pitfall that will get in the way, impeding the sales growth, discouraging the customers and causing a lot of abandoned carts.

This pitfall is called local payment methods. In the western world, we are sure accustomed to see almost every single customer having a Visa, Mastercard or the likes of PayPal and Venmo.

However, when it comes to cross-border commerce, you will discover that the locally popular payment methods radically outshine those that we see “conventional” in our part of the world.

There are numerous factors responsible for that: culture, economic development, available technologies, living standards and even religious beliefs. (To an extent).

Luckily, you don’t need to dive into these complicated issues. All you need is the access to a modern system that can facilitate local payment methods that customers from Brazil, Norway or Belarus favor the most.

Why Local Payment Methods Are Important

Okay, take a look at the stats:

It is expected that the internation eCommerce will grow by $1 trillion by 2025.

That means, the buying activity will only grow in countries where alternative payment methods rule supreme. Naturally, you can’t afford to miss any of that action.

As we’ve mentioned, there are numerous reasons certain local payment methods have gained the monopoly. Let’s quickly review some of them to give you the full picture.

  • Lag in technology. Many of the foreign countries are still developing. The popular payment methods appeared there, because PayPal and the co. failed to arrive on time to fill the niche.
  • Politics. Customers from Russia or China have their preferred methods, because their national policies are rather protective when it comes to payment methods.
  • Economics. Did you know that in Latin America they have their own type of credit services? The local customers often prefer installment payments.
  • Cultural. The reason why Klarna is one of the top popular payment methods in Sweden is because the Swedish shoppers are pretty conservative when it comes to money management. They’d rather trust a payment system that’s originally from their own place and has already gained favorable reputation.

So, these are just the basic pillars of the popularity behind the local payment methods. For instance, in certain countries — particularly on the African continent — bank industry is in its infancy stages.

And operating a digital wallet is the preferred way to handle finances for both merchants and customers. Especially in economic conditions where the local currency has little value and all transactions are made in the USD or similar equivalents.

Does Culture Really Impact Online Payments?

Undeniably, national culture impacts the payment preferences a lot. For instance, invoices occupy the second place among the top popular payment methods in Germany.

Historically, German shoppers favored buying various kinds of stuff from the product catalogs. That means you get an item — like a frying pan. You can test it and then either buy or return it.

This cultural heritage echoes today through their payment habits, making PayPal with its invoices the leading alternative payment platform in the entire country.

In the Netherlands, the most popular online payment method is iDeal — the request-to-pay service. Obviously, there is a historic premise, which explains why Dutch customers prefer bank transfers to everything else.

In Indonesia, the Ulama Council — a group of religious scholars — put Bitcoin under a fatwa, making all cryptocurrency transactions and payments forbidden. But a number of enthusiasts found a few loopholes to avoid the ban.

Payment Kaleidoscope: Local Payments & Their Types

For starters, let’s define what an alternative payment method — also known as APM — actually is.

Basically, an alternative payment method is anything that doesn’t involve either cash or the traditional bank cards. Among them, we can name digital wallets, cryptocurrency wallets, cash vouchers, debit/credit networks of local popularity, and so on.

Frankly speaking. PayPal could be considered as an APM too. But its exceptional presence on the market makes it a metaphorical “whale” of the payment industry.

Now, let’s take a closer look at the most widespread and popular payment methods.

  • Digital wallets. According to the FIS global payments report, digital wallets were already the most popular payment method in the world back in 2020.
    They are accessible and don’t need a bank account to function. Plus, they offer security and customers can top up a digital wallet in a store or from an ATM or terminal.
  • Invoicing. The purchased products are shipped to a customer, while a digital invoice remains open. The customer has to make a payment during a given amount of time or the item returns to the merchant. A major pitfall is that there’s no upfront payment at all, which makes the whole deal risky to the merchant.
  • Vouchers. Another payment method, it involves cash vouchers. After ordering an item online, a customer receives a coupon. Later, at a pick point they need to have it scanned and make a cash/card payment.
  • Installments. This payment type becomes more popular in the eCommerce these days. It allows the customers to buy goods now and pay for them later. For example, a payment worth of $300 can be broken up into three installments of $100.
    Basically, it’s a credit program. And it’s gaining so much popularity that PayPal offers a “4 installment payment plan”.

According to the FIS global payments report, digital wallets were already the most popular payment method in the world back in 2020.

  • COD. COD or Cash on Delivery isn’t a global trend — it’s responsible for just 5% of the world’s eCommerce. At the same time, it’s a popular payment option in the Eastern Europe, as well as in India. The customer receives the parcel with goods at a pick point.
    There they can check the items and then pay with cash or a credit card. COD has a potential for growth in the CIS countries, as well as in countries where bank infrastructure is yet poorly developed.
  • Bank transfers. This method is quite old. To make a payment, the customer should use an individual reference number, plus the details of a bank account, which will receive their payments.
    Then, a payment can be done by mailing a check, making an online transaction with a digital wallet, and so on. This method is popular among those shoppers, who don’t want to use a credit/debit card at the checkout or just don’t have one.

As you can see, it’s a colorful kaleidoscope. Every continent has a constellation of popular payment methods, that affect the local and global eCommerce alike.

And how do businesses benefit from employing these payment types? How will the local methods and options reward your venue for making them a part of your brand’s family?

Payments with Benefits

Adapting your venue to the regionally specific preferences looks like a hassle. So, is it even worth the trouble? Maybe you can just leave a few global online payment options popular in the US and call it a day?

Not exactly. When you offer the popular local methods, you win much more for your business than you can imagine. Let’s review some of the rewards that you can claim.

When you offer the popular local methods, you win much more for your business than you can imagine. Let’s review some of the rewards that you can claim.

  • Customer experience. If you want to enter the global market painlessly, establish a steady client base and make your sales grow, then offering a smooth checkout process is an absolute must.
    If the shoppers from Bangkok, Kraków or Amsterdam won’t see their favorite payment method, they’ll just leave the cart and go to a rival venue. They won’t reject their shopping habits or get a new Visa card just to shop at your place.
  • Reputation and image. You need to “disguise” your business as something aboriginal and native. It includes offering the local currency, a preferred payment system, language of the region, and so forth.
    When your customers see the familiar symbols — like roubles, pesos or their mothertongue — they fall under an impression that’it’s a local merchant they are dealing with. As a result, this can boost engagement and trust.

Customers expect to be understood and respected. This includes treating their traditions, habits and cultural preferences with regard.

  • Increased conversions. As practice shows, customers feel rather disappointed when they don’t get to use their favorite payment methods at the checkout.
    What’s even worse, they never come back. While looking for the products and services that you offer somewhere else.
    On the contrary, if the preferred methods are there, they’ll want to do business with you in the future, possibly advertising your brand among their friends and family.
  • Relevancy. A behemoth service like PayPal may be not that much popular in a country with the growing economy.
    The reason is its commission — a local payment network can charge a smaller fee, as well as offer bonuses that can be a game-changer for the customers from this region. So, you have a chance to make your brand relevant.

And of course, the local payment methods can make your venue look more appealing from the cultural point of view.

Customers expect to be understood and respected. This includes treating their traditions, habits and cultural preferences with regard.

In turn, this cross-border approach can guarantee more sales, bigger revenue and a steadily growing client base.

What is Popular in the Regions?

So, now you know how versatile eCommerce is. But which payment methods play the role of “khalifas” on the regional level? Let’s do a quick investigation from Africa to Australia.

1. Asia

Asia is an absolute heavyweight when it comes to digital commerce. For starters, we have here two countries with the biggest population on planet: India and China.

China alone is responsible for almost 60% of all digital shopping in the world, according to statistics. India can’t boast of that. But its share in business-to-customer eCommerce is expected to show a yearly growth of 26%.

At the same time, the “internet penetration” in both countries is far from reaching its apogee. For comparison, in China, only about half of the population have access to the online space. That means digital sales will only keep on growing in the future.

Japan, Korea, and Singapore are more developed in the context of bank services and technology. But e-wallets still play a significant role in these countries. And in South Korea the Buy Now Pay Later model is getting more popularity.

The most popular payment methods:

  • India: PayZap, PayUMoney, Pockets, Cheque, MobikWik. Cashfree.
  • China: WeChat Pay, AliPay, China UnionPay.
  • Singapore: Singtel Dash, Moblamo.
  • Japan: D-Barai, PayPay, Rakuten Pay.
  • South Korea: Naver Pay, Kakao Pay, Payco, Toss.

Other Asian countries have their own lesser-known payment methods as well, like ShurjaPay in Bangladesh.

2. Europe

Europe is, probably, the most culturally diverse region. In some countries credit or debit cards are in everyday use like in the UK or France.

In others, only a part of customers has credit cards with Russia, and almost the entire post-Soviet world, being one of the examples. (About 20%).

So, the cultural nuances greatly impact the preferred payment methods, which vary from digital and BTC wallets to cash-on-demand mode.

The most popular payment methods:

  • UK: MuchBetter, Neteller, Revoult.
  • Germany: PayPal, Novalnet, HiPay, Paymil, Klarna.
  • France: Carte Bancaires, Carte Bleue.
  • Netherlands: iDeal, Neteller, Masterpass, Sofort.
  • Russia: YooMoney, Qiwi, WebMoney, MIR.

Even though Europe has a variety of digital payment systems, cash payments still play a certain role in countries like Spain, where 19% of eCommerce payments involve cash-on-delivery. So, the COD scheme is still in demand there in a number of regions.

3. Latin America

The Latin America’s case is interesting, because the credit cards there are of little use outside the respective countries.

Therefore, cash-on-demand and vouchers, play a significant role in the region’s eCommerce.

As of the digital; wallets, they haven’t established a powerful presence yet, except for Brazil. And this is another example of the cultural impact.

The problem is: the customers from the Latin countries would rather trust a bank than an online payment system.

The most popular payment methods:

  • Brazil: PagBank, Boleto Bancario, RappiPay, MercadoPago.
  • Argentina: Pagofacil, Mobiamo, Rapipago.
  • Columbia: Daviplata, Nequi, RappiPay.
  • Chile: Mobiamo, Mint, Effectivo, Red Compra.

Probably one of the most popular payment options in the region is RappiPay. It has a network of 100,000 affiliates, where people can top up their wallets.

Transfers and payments in it are done with QR codes. And the service is cross-border, working in Brazil, Columbia, and other countries.

4. Africa

Even though in many African countries eCommerce or basic bank infrastructure aren’t accessible yet, mCommerce shows an impressive growth on the continent.

Mobile transfers are among the most secure payment methods in Africa. This is because more traditional tools like credit cards are simply unavailable or not trusted by the local population.

The most popular payment methods

  • South Africa: Fitbit Pay, Garmin Pay, Apple Pay.
  • Nigeria: Transferwise, Quickteller, Ecopayz.
  • Morocco: AlliedWallet, UnionPay, PaySera, Boku.
  • Kenya: M-Pesa, MobiKash, Orange Money.

M-Pesa is a bright example of an APM becoming the main payment network. About 58% of the Kenyan population have the app and use it instead of bank cards.

5. Australia & Oceania

A continent on its own, Australia is the biggest eCommerce market in Oceania. With a humble population of 25 million, Australia plays a noticeable role on the global digital market, occupying the 10th place.

It is expected that by 2025 Australian eCommerce will reach the 35 billion capitalization mark. And while bank cards are a #1 go-to among the local shoppers, alternative payment options are also in demand.

The most popular payment methods:

  • Australia: PayPal, V.me (by Visa), PayPass Wallet, Lemon Wallet, Poli
  • New Zealand: Skrill, PayPal, UPayCard, Dosh.

Interestingly, digital wallets saw a surge in popularity in Australia lately. They occupy the second place among the most popular payment methods in the Sunburnt Country, with 22%.

How to Accept the Local Payment Methods?

So, now you can see how important it is to accept local payments at the checkout. But there’s a myriad of systems and methods in different countries. How do you handle this all?

Obviously, you can’t contact all of them in person and ask for “cooperation”. Searching through the list of local payment options is also a fruitless task — this list can literally go for miles.

Luckily, there’s a ready-made solution that can take this headache from you.

Payneteasy knows everything about the local payment methods, their popularity and relevance. Here’s what we can do for you:

  • Quick solution. We’ll prepare a cavalcade of the popular payment options for each region/country. From Visa to AliPay — we’ve got your business covered anywhere.
  • Flexibility. You can add and remove the payment methods if necessary. If you need one to be added to your arsenal asap, you can request its addition.
  • Security. Our payment solutions are compliant with the world’s leading online security standards. From PCI DSS to Know Your Client — we’ll make sure that neither you nor your customers will fall a victim to the malicious actors.
  • Privacy. We employ specific methods — like tokenization and encryption — that make data leakages virtually impossible. Your clientele won’t have to worry about their credit card data or the shopping history being revealed.
  • Simplicity. Your customers can pay with a single tap. No drudgery, long loading screens or annoying bugs. Just simple, smooth and laconic checkout process.
  • Customer experience. We’ll do whatever we can to make online shopping at your venue a pleasant adventure. In turn, this can increase the number of sales and boost the customer loyalty.
  • Support. We stay in touch 24/7 to make sure that no problems will undermine the flow of your business.

Contact us right away, so we can make your brand international in the matter of minutes. Smooth and failproof checkout will be at your disposal in no time.

It’s Pay Time

As you can see, to launch an international business, you should think both globally and locally.

There is a caboodle of details to consider in the  eCommerce landscape. From multicurrency support to cultural differences that can be observed in absolutely every region of the world.

But all this hard work is totally worth it. When your customers see how much care and respect you have for them, they’ll choose to stick to your brand for good.

And this will bring more sales, bigger revenues, more exposure and a dynamic growth of your company. Don’t be afraid to enter the local markets: they are waiting for quality goods.

And we can help you with everything related to the payments. We’ll help you collect your money, protect your transactions and more. Read our guides and contacts us for further assistance.

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