Taking Your Website Global: Choosing the Right Payment Options for International Customers
All around the world, the technology available to us has created a wide variety of payment method options for those looking to make purchases online.
Depending on where your customers are located, their preferred payment methods are likely to vary and may not be the same as what your website accepts for your users here in the United States.
If you have expanded to international markets and allow purchases through your website, it is important to make sure the payment options you provide customers reflect what they prefer to use when making online purchases.
While credit cards are a popular option in the U.S., many markets prefer alternative payment methods.
This occurs for a variety of reasons, including potential usage fees or wanting to utilize a service that is considered more secure in a given market.
Once you take your website global, including the best payment options for each market is a crucial step in making sure your customers feel safe and secure when making purchases.
Here are a few options and tips for choosing the best payment options for your global website.
The importance of expanding international payment options beyond credit cards
In the U.S. we are accustomed to using credit and debit cards as the primary method of payment on websites.
We see alternate payment options on certain websites, such as PayPal or, less frequently, bank transfer or cryptocurrency such as Bitcoin.
It is easy to assume that users in other countries make online payments the same way.
However, James Booth, Vice-president of PPRO, a global firm that focuses specifically on local payment methods, mentioned that while credit cards remain the most popular option for online transactions in the U.S., with 76% of completed eCommerce transactions involving them, the rest of the world typically uses other methods.
In fact, around 50% of shoppers in global markets have abandoned a purchase because an online retailer did not offer sufficient payment methods.
That’s a lot of money left on the table that these retailers could have earned by investing in local payment platforms that customers in these areas would have preferred to use.
In addition, major credit card companies – Visa, Mastercard, American Express, Discover – charge different cross-border fees depending on where the merchant is located, as well as the location of the institution that has issued the card.
These fees ultimately trickle down to your business. So while they are important payment methods for your eCommerce customers, there are other options that may work better for both you and your international customers.
Popular international payment method options
Outside of credit and debit card payments, here are a few payment method options that are most popular across the globe.
eWallet payment methods are essentially digital wallets that store personal data and funds for your customers so they do not have to enter their payment or banking details directly on your website.
Instead, they are redirected to their eWallet site to log in and complete the transaction at checkout.
The most popular eWallet options are PayPal, Venmo, ApplePay, GooglePay, WeChat, and AliPay.
Bank Transfer & Electronic Checks
Another payment option is the use of bank transfer and electronic checks, or ACH (Automated Clearing House).
These payments are taken directly through the customer’s bank without having to use a debit card or eWallet company to process it.
Buy Now, Pay Later
While most transactions are still handled through instant pay options like credit/debit cards, eWallet, and bank transfers, payment options that offer a buy now, pay later method are increasingly popular, growing 162% between 2018 and 2019 alone. This trend is expected to continue to grow on a similar trajectory.
Buy now, pay later is increasingly popular with younger shoppers, with 64% of customers saying they are more likely to make a purchase with a retailer who offers an interest-free buy now, pay later option.
Local Payment Methods
Each country has their own eCommerce payment method preferences. While many customers are comfortable using the payment options listed above, still others prefer local eCommerce methods.
These choices vary from country to country, and so does their frequency of use. eCommerce customers choose local options anywhere from 10%-50%+ of the time, so local payment methods are critical when you’re looking to tap into international markets!
Some countries also have local credit card brands that you’ll want to support instead of solely offering payment options via major international credit card companies.
Determining preferred payment methods for international markets
Different countries have distinct norms that make an impact on their preferred online payment methods.
So how do you know which options to choose?
Working with localization experts who specialize in international payment methods is important, but here are a few ideas to help narrow things down depending on where you plan to expand your web presence.
Throughout the majority of Europe, credit card payments are still quite popular. However, depending on the country, other payment options are equally (if not more) important. Examples include:
– Germany, with 41% of online shoppers preferring to pay after delivery, and do not make a payment until the product is delivered and they receive an invoice. PayPal is the second most common online payment option.
– The Netherlands, where around half of all online shoppers utilize iDEAL, a local bank transfer program.
– France, where online shoppers primarily use credit and debit cards, but Cartes Bancaires is still a popular option, making up 12% of all online purchases.
If you are planning to make online sales in Asian countries, expanding to include local payment options is critical.
– Chinese online shoppers prefer to utilize AliPay and WeChat. In fact, almost half of all online payments in China are made utilizing AliPay.
– In Japan and South Korea, credit cards are the most popular payment method, with eWallet and buy now, pay later options increasing in popularity in recent years.
For Latin American shoppers, credit and debit card payments are most common. However, countries in this region have other local payment methods that are important, too.
– Many Latin American customers prefer to pay with local credit cards that offer payment installment options, as opposed to major international credit cards, so be sure to look for a local processor to partner with in order to accept these payments.
– If you plan to market your products or services in Brazil, know that many of their online shoppers prefer to utilize Boleto Bancario, a payment system that allows shoppers to pay in cash at an ATM or inside of a bank.
– Mexico offers similar payment systems, allowing customers to pay cash for online purchases, but inside of convenience stores instead of at an ATM. These payments account for about 1/3 of all purchases in Mexico.
No matter where you launch your international eCommerce business, make sure you are familiar with local tax codes and laws.
And if you offer subscription services, check to ensure you have payment options available that allow for automatic billing. Not every payment method works with automatic billing, so make sure you have at least one option that will.
What else should you consider before entering the international market?
Offering appropriate payment methods for your market is an important step in taking your eCommerce business global. However, there are other important steps to consider before fully launching your international eCommerce business.
Each piece of the customer experience on your website should not only be translated, but localized to meet the needs of these global customers.
If your site is optimized for these customers, it will be easier for them to find it. You’ll also be providing a positive shopping experience for them along the way, which can result in fewer abandoned shopping carts and higher revenue.