Convenient and local – the most important features in international e-commerce expansion.
From specific regional preferences for online payments, to different levels of smartphone saturation – no two markets are the same. Every country and region is different, certain payment providers are more popular than others, and customers have their own buying habits. Payment methods alone number in the hundreds worldwide. Businesses that do not try to understand local behaviours and needs will not be able to expand in foreign marketplaces.
One of the main success factors in cross-border commerce is offering convenient and familiar online payment methods to foreign customers. In addition to this, accepting payments in local currencies is equally important.
A key to success is harmony between local and global activity. E-businesses should be aware that by offering customers different payment options, they not only consolidate their position in that market, but also increase consumer trust.
Effective strategies for foreign expansion are focused on providing consumers with the best possible purchasing experience, and local online payments help create that experience.
Firms that do not follow the rule of offering local solutions may in some cases lose access to more than 80% of the consumer market (2).
This is particularly important in high-growth markets, where traditional payment methods such as credit or debit cards have not yet attained a significant position. For a customer in such a region, the absence of alternative payment methods may cause some frictions in the purchasing experience. On the other hand, for e-businesses that want to move into foreign markets, it may be a frustrating challenge to integrate their e-stores with payment options ideally matched to the expectations of local customers.
Brazil, for example, is the strongest economy and largest e-commerce market in South America. However, as many as one-third of its inhabitants have no bank account and no card. For such consumers, a special online-offline payment method has been created, known as Boleto (described in more detail later in this article). In Poland, on the other hand, the most popular payment method is fast, real-time bank transfers (pay-by-link), used by as many as 62% of Polish e-consumers.
Meeting customers’ needs for local payment options is a complicated process, which can sometimes prove to be a burden for e-store owners who try to operate at a global level. A convenient solution in such a case may be a global aggregator of payment providers, such as the PayU Hub platform.
Characteristics of payments in selected markets
Every region of the world where e-commerce is currently developing most strongly, and in particular every country classed as a high-growth economy, is characterised by a distinct approach to online payments among e-consumers. Below we consider several examples that illustrate customers’ payment preferences in selected parts of the world.