The future of global payments is local
With the continuous adoption of technology and the role it plays in everyday life, digital spending has accelerated. This has created a significant change across the payments landscape, encouraging merchants to design and deliver a more convenient payment journey to capture the online audience, on both a local and global scale. As a result, merchants now have greater access to international audiences to sell their products and services.
With the Global E-commerce Market to expand by $1 Trillion by 2025, partially fuelled by the Covid-19 pandemic, the opportunity should continue to increase for merchants to grow into new markets. As you seek to expand into international markets, new challenges will emerge surrounding your need for alternative payment methods to suit your global audience, and intelligent routing for different currencies.
Regardless of where your business is based, having a compelling payment process on your digital channels is expected. Online merchants expanding overseas will receive pressure to adopt new payment methods that are local to your new customer base and will need the flexibility to work with providers and acquirers who offer competitive rates for new market currencies.
Is global expansion commercially viable for your business?
If you’re looking to expand your business across borders, one challenge will be how you enable customers to pay how they want to, which can vary between cultural, currencies and countries. To accommodate your new global audience, you need to cater for all in a commercially viable way.
The average integration time for a new digital payment method can take around 8 months. Only utilising a single provider due to the lengthily process of integrating new payment methods, can be a challenge where you are stuck with one single conversion rate for currencies. Therefore, reducing your commercial leverage and ability to manage margins during your expansion.
With payment orchestration, like BR-DGE, you can have a robust payment solution with a multi-acquirer strategy, ensuring you have the flexibility to work with providers and acquirers who offer competitive rates for new market currencies to be commercially relevant for your global audience.
The importance of loyal payment methods
The shift over the last few years to digital payments has unlocked the potential of building your global audience, but you need a payment process to match.
Delivering a frictionless payment experience for your customers is essential, wherever your customers are in the world. Customers want to pay with their local currency, using a payment method that they are familiar with, which changes on a country-by-country basis. This creates a positive user experience, increases conversions, and develops brand trust and loyalty.
Partnering with local acquirers and PSPs will allow merchants to plug into the local ecosystem, offering payment methods and currencies most appropriate for the market. This also utilises the experience of domestic partners to help enhance the customer payment journey.
Furthermore, recent studies highlight that the average cart abandonment rate is 69.2%. This is a serious challenge for merchants when putting global expansion plans into action. Anything that can deter or disrupt your conversion journey, including not offering the right payment methods, is to be taken seriously. To meet the needs of your global market, you need to offer local payment method that your new audience recognises. This will increase buyer trust, and purchase convenience, therefore reduces the likelihood of abandoned carts.
Utilising local payment methods give your global audience the impression that they are purchasing from a local merchant to them. This can provide a greater degree of trust in a transaction and help your customers to develop brand loyalty to you over time.
What payment methods do your customers want?
In 2020 the most popular online payment method worldwide was the digital / mobile wallet which accounted for 44.5% of global e-commerce transactions, which is set to increase to 51.7% by 2024. The 2nd most post popular online payment method worldwide, the credit card, accounts for 22.8% of global e-commerce transactions, but is set to decrease to 20.8% by 2024.
Around the world, the leading choice online overall is the digital / mobile wallets, but different countries have different preferred payment methods. For example, in the Asia Pacific Region, 60% of e-commerce transactions are completed with a digital or mobile wallet. In contrast, this method’s transaction share only amounted to 20% in Latin America. In China, the preferred payment method is Alipay digital wallet whereas in the UK it is Apple/Google. With different countries having different preferences for payment methods, it is vital that you understand your new market and seek to give your global audience the payment method that they prefer. This path of least resistance will ensure a reduction in cart abandonment and higher transaction success rate.
Shop global, pay local with payment orchestration
The opportunity for merchants to build their global audience has never been greater but prioritising the payments experience is essential to building long lasting relationships with customers in new markets. Utilising payment orchestration technology, like BR-DGE, you can quickly integrate with local payment methods to allow your customers to pay how they want.
Your customers want to pay how they want, in the currency of their choice, regardless of location. Building integrations to offer different payment methods yourself not only will cost you money, but will take you time. Payment orchestration gives merchants the freedom and flexibility to leverage commercial rates, innovate at speed, grow into new territories and maximise data-driven decision-making.
With BR-DGE, you can achieve an optimised payments flow at the lowest possible cost by routing transactions to the most appropriate provider, wherever they are in the world. Our single API integration connects merchants with over 100 payment providers and over 200 alternative payment methods, from e-wallets to card schemes and Buy Now Pay Later solutions, which enable international customers to pay locally.
To find out more about payment orchestration, our connections and intelligent routing to maximise commercial leverage, get in touch with the team today.