When customers pay for online purchases, businesses should always be mindful of the co-existence of two competing forces at work. On the one hand, e-commerce is becoming increasingly globalized – with credit cards at least somewhat prevalent in most markets around the world. At the same time, we see an exponential growth of local payment preferences, which are often geography-specific and unique to specific target markets.
It is therefore important to build an online payment methods strategy that offers the best of both worlds – encompassing a mix of common and popular global payment method options, while also offering the most important local payment methods in key target markets around the world.
The importance of local payment methods
The ability to offer local forms of payment is important for increasing customer satisfaction, reducing cart abandonments, and maximizing transaction approval rates. When expanding into new markets, a willingness to offer local payment method options is an important way that companies can localize their brand and product. In many countries, traditional credit cards and digital wallets are secondary to more popular local payment methods, which are often unique to each market.
In addition to facilitating a higher rate of checkout conversations, transactions using local payment methods often have a higher rate of acceptance since local acquirers and banks are more likely to approve payments from local customers.