Expand with local payment methods

In this chapter you’ll learn:

  • How to evaluate which payment methods to support
  • How to integrate new methods
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It's an exciting time for cross-border ecommerce

The global ecommerce market is projected to double, climbing from $2 to $4 trillion by 2020. And a report by McKinsey predicts that the flows of goods and services across borders will triple by 2025.

Businesses of all sizes are expanding across borders to reach shoppers around the world. But, before you rush to launch localized websites and set up entities in new markets, it’s important to consider how these international shoppers want to pay.

Guide | Global payment methods around the world

Hundreds of millions of your potential customers don’t use international credit cards.

Instead, shoppers use an array of local payment methods, like online banking, open invoice, digital wallets, cash and local card schemes. So, to reach your full potential in new markets, it’s vital that you offer the payment options your local customers know and trust.

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In China Visa and Mastercard make up a tiny proportion of online payments.

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In Brazil most cards issued are not enabled for international use.

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In Germany three-quarters of shoppers prefer not to pay with credit cards.

Don't forget mobile

Many local payment methods offer a mobile-optimized integration. So don’t forget to integrate with mobile in mind.

Since iDEAL developed a mobile-friendly payment flow, 50% of iDEAL payments are made on mobile. And mobile apps that support iDEAL tend to have a higher conversion rate in the Netherlands.

Chinese mobile wallet Alipay, with a reported 520 million active users worldwide, accounts for almost half of the $500 billion ecommerce market in China. And WeChat Pay (part of the WeChat app) is China’s fastest-growing payment method. Both are supported online and in store.

So, if you want to expand into China or serve Chinese tourists, Alipay and WeChat Pay are must-have options.

Map of the world highlighting payment methods

One size doesn’t fit all

When evaluating which payment methods to support, it’s important to consider your own business model. If you’re a subscription business, for example, some payment methods won’t work for you as they don’t support recurring payments. So make sure you understand the functionalities and restrictions of each method you support.

Get the full guide

Download your copy of "Payments 101 for fast-growing businesses"

So how do you support local payment methods?

You have two options:

1) Go to the payment method directly and integrate each one separately

2) Integrate via your payments provider

Integrating each payment method separately is fine if you’re only selling in one market. But as you expand it becomes very time-consuming. Not only does it take a lot of development work to integrate each method, but you’ll have to maintain the integration as regulations change and updates occur. You’ll also have to manage separate contracts and reporting for each method.

It’s much easier if your payments provider can handle all this for you. But it’s important to ensure they provide a good, well-maintained integration with an optimized payment flow that works on mobile. It’s also worth checking if they’ll take care of reconciliation.

Another important factor is pricing. You may suppose that you’ll get a better price by going to each payment method directly. But payments providers that process for many large merchants have strong leverage to negotiate lower fees. So, while they will charge you a mark-up, you should offset this with the lower fee they’ll negotiate and the time you’ll save in terms of development hours and reconciliation.

Support local payment methods with Adyen

One contract and one integration with Adyen gives you access to all key local payment methods around the world, optimized for mobile and ready to go out-of-the-box. No need to set up a local entity in each new market; going live is as simple as flipping a switch.

You can even serve up a targeted list of payment methods based on your customers’ location, device, and basket value. So each customer only sees the payment methods relevant to them.
 

Talk | to a local payment methods expert

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