Businesses that aim to operate internationally often tend to be so involved in setting up globally accepted payment methods that they overlook the local ones. However, it is crucial not to skip this step, as successful market entry is unimaginable without it.
In this overview, we explain why regional payment options are a must for profitable long-term operations, list the challenges that merchants may encounter when integrating them, and explain how to tackle these issues. Read ahead not to miss out on valuable insights!
Why Offer Local Payment Methods at Checkout?
Even though businesses nowadays are not limited by physical borders, it’s critical to think locally to grow globally. But why so?
By offering local payment methods (LPMs) to your clients, you take their payment preferences into account and create an optimal checkout experience, which will inevitably boost conversions. If, on the other hand, regional payment options are not available on your site, you’ll be missing out on a lot of sales opportunities.
While credit and debit cards are predominant in some Western markets, consumers in other parts of the world prefer digital wallets, bank transfer apps, BNPL services, and other payment options. Think about it: globally, shoppers use LPMs for
77% of all online purchases1.
Here are some examples of popular regional payment methods that illustrate their prominence:
- In the Netherlands, the real-time bank transfer service iDEAL that emerged in 2005 has a
71% of the local market share2.
- Boleto Bancário, a cash-based payment solution, has a 15% market share in Brazil3.
- Multibanco boasts having an over 30% share of the payments market in Portugal4.
The list goes on! As you can see, LPMs can comprise a significant share of a country’s or region’s payment market, creating plenty of potential for business revenues. However, the benefits of adding them to your web store don’t end there - find out more below.
Advantages of Integrating Local Payment Methods
Enriching your site’s list of payment methods with local options will result in the following benefits:
- Reduced cart abandonment rates. Approximately 70% of people abandon their online shopping carts,
9% of those being due to the lack of payment options available. Offering LPMs helps to minimize this issue.
- Bigger customer base. The more payment options you provide, the bigger the audience that will be able to purchase the products or services you offer.
- Boosted brand trust. Local payment methods are often trusted by consumers in regions where they are popular. Thus, offering them as an option at your store will automatically make your web store appear more credible.
- More loyal clients. Offering a variety of convenient payment methods paired with smooth and secure checkout helps merchants stand out from the competition and ensures better customer retention.
Given the multitude of advantages linked to accepting local payment methods, it is only natural to wonder why some merchants hesitate to do it. The answer lies in the potential challenges associated with integrating and processing LPMs.
Challenges Merchants Encounter With LPMs
When preparing your business to start accepting local payment methods, it’s helpful to know which challenges you might come across, such as:
- Plenty of research required. Different regions have hundreds of various LPMs. Each of these competing systems has its own transactional infrastructure and user base, so merchants need to conduct thorough research to identify which options match their target audience best.
- Costs and time involved. Ensuring the chosen LPMs are supported by the merchant’s payment platform and integrating them one by one can be a time-consuming and costly process.
- Differences in regulations. Expect to encounter different sets of regulations and licenses required for integrating LPMs across various jurisdictions.
As you are putting effort into growing your business internationally, encountering these challenges might seem overwhelming. However, do not let these obstacles discourage you - Payneteasy has a simple solution!
How Can Payneteasy Help?
Payneteasy is a leading payment platform provider with over 15 years of successful experience across countries. Our team of industry experts is here to provide you with all the necessary guidance on local payment methods.
We offer the following:
- Simple solution. Payneteasy has over 600 integrations with various payment systems worldwide, guaranteeing that the implementation process is as simple as it gets.
- Fast integration. We ensure the integration of LPMs goes fast and smoothly so that you can start reaping the benefits in no time.
- Compliance with regulations. With Payneteasy, you don’t have to worry about keeping all the nuances of different local regulations in mind - we got you covered.
- Convenience and flexibility. You can add, remove, and manage LPMs easily and securely whenever needed through a single dashboard.
- 24/7 support. You can reach out to us around the clock if you have any questions or require technical assistance.
Reach out to us today to ensure swift checkout with local payment methods and set a strong foundation for your international business growth!
1 - Edgar, Dunn & Company - Payments Report
2 - Finextra - IDeal annual payments surpass one billion
3 - SimilarTech - Boleto Market Share & Web Usage Statistics
4 - J.P.Morgan - 2020 E-commerce Payments Trends Report: Portugal