Global Payments: Building Local Payments Strategies

Global Payments: Building Local Payments Strategies

Global Payments: Building Local Payments Strategies

August 31, 2021

Aug 31, 2021

The global digital payments market continues to grow. Estimates project the digital payments market value will reach $175.8 billion (USD) by 2026, assisted in no small part by the rapid increase in digital payment methods, mobile payments and the growing adoption of real-time payments.  

As payment processors diversify their payment services, customers will enjoy a wider range of payment options, enabling the world economy to thrive in the years following the pandemic. A significant proportion of this growth will happen internationally. Over a six month period in 2020, ecommerce sales across borders increased by 21%

However, growth for individual operators will depend on how reliably they can service international payment markets. Providing payment services that are tailored to local markets is an essential way for operators to secure preferential status in the minds of digital customers. 

Establishing a localised payments strategy can help forward-thinking operators set themselves apart in the minds of customers worldwide. So how can operators create a robust, future-focused payments strategy that reflects the needs of users on a regional basis? Why should modern e-commerce businesses create localised payment services strategies? 

Why localised payment methods are critical to ecommerce success

Accepting credit cards and PayPal is no longer enough. In this digital age, customers are highly attuned to businesses that prioritise their convenience, but the culture of each market dictates which features are considered most advantageous.  

For example, Sofort in Germany is highly popular, with 61% of payments in the country being made by eWallet or direct bank transfer. In the Netherlands, alternative payments company iDEAL enjoys a market penetration of 57% amongst Dutch customers, reportedly thanks to customers not requiring to open an account to use the system. 

It’s important to note that Sofort in particular does not only operate within the German market. Ecommerce businesses need to ensure that their payment strategies are localised to account for the regional preferences of the customers they are looking to attract. 

Direct bank transfers, digital wallets, local debit networks, open invoicing and all other forms of payment require ecommerce businesses to be more flexible than ever before. Today’s customers expect ecommerce businesses to provide popular and relevant payment methods based on the preferences of their geographical market. This is a significant challenge for ecommerce businesses hoping to scale across borders. 

The solution is to create a localised payment services strategy. 

How to choose the right payment services for each market 

Ecommerce businesses should consider each of the following when drawing together a localised payment services strategy: 

Location of the customer and market penetration

Entering a new geographic market requires an intimate understanding of the main local payment methods. Does the local business culture dictate a clear payment preference, or are there new, incoming fiscal regulations, such as digital sales taxes, that could impact the costs of customers transacting online? 

If your business is already established in a foreign market, experiment with accepting other payment options and analyse whether checkout conversions improve. 

Business model relevance and avoiding unnecessary fees

Depending on the type of business you represent, certain payment options may be more appropriate and profitable. For example, if you are working in a company that operates with a subscription-based business model, then it would make sense to use SEPA Direct Debit as a payment method. However, this wouldn’t be the right shop for a fashion ecommerce shop that doesn’t work with recurring payments. 

It isn’t necessary for every business to accept every form of payment currently available. An endless choice can add complexity to the checkout process for customers, potentially driving up cart abandonment. 

The goal is to assess which payment methods will add value to your business. As a result, partnering with a fintech that doesn’t penalise you for experimentation is critical. We’ll discuss what to look out for in an ideal PSP partner later in this article. 

 UX and speed of checkout

Ensuring checkout experiences are seamless and rapid is essential to maintaining an effective ecommerce business. Likewise, it’s critical to assess whether new regulations, such as PSD2 (Payment Services Directive 2) across the EU, legally require you to make changes to your checkout processes in your target markets. 

SCA (Strong Customer Authentication) is of particular concern in relation to the checkout user experience. The security legislation requires multi-factor authentication for all proximity and remote transactions performed on a channel. As a result, ecommerce businesses have another layer of complexity to consider when designing their checkout process, which could drive up cart abandonment

Anti-fraud and compliance 

When building a localised, or global, payments strategy, consider how anti-fraud legislation in each target market applies to different payment methods. Are there compliance considerations that apply to your business model or market vertical? 

Thankfully, ecommerce businesses don’t have to take on the daunting prospect of international payment localisation alone. Payment Service Providers (PSPs) like FinXP provide ecommerce businesses with a suite of flexible payment options and expert consultancy services, enabling ecommerce businesses to transact with a greater number of customers by using hyper-personalised payment services. 

Ecommerce businesses should be empowered to analyse the performance of individual payment methods, helping them to refine the selection of local payment services offered. Not all PSPs provide an equal level of service, and some fintechs are better placed than others to deal with highly regulated industries requiring thorough due diligence and stringent KYC (Know Your Customer) procedures. 

Let’s examine some of the key factors ecommerce businesses should consider when assessing which fintech company would make the best PSP partner. 

 How to Implement Local Payment Methods

The best PSPs for ecommerce businesses provide omni channel payment gateways, which feature built-in options helping operators to support payment methods with: 

  • Access to hundreds of payment methods that support a variety of consumer preferences across geographies 

  • Support for all major credit cards 

  • Integration with popular ecommerce and CRM systems 

  • Fraud prevention, robust KYC procedures and risk management 

  • One platform, enabled with one contract. 

If applied correctly, ecommerce businesses can take advantage of the opportunities presented by payments technology to develop their international presence and drive conversions. 

Making a success of global payments with a localised strategy

Crafting a localised payments strategy is essential for e-commerce businesses looking to capitalise on the growth opportunities of a rapidly evolving payment market. By balancing customer relevance with a streamlined, compliant checkout process, ecommerce businesses can enable cross border growth with their payments infrastructure. 

But success will depend on whether operators can take advantage of flexible platforms created by highly experienced PSPs. Platforms that are flexible and designed to help your company with its specific business requirements will play an important role in maximising their revenue for years to come. 

Rapidly execute a localised payment strategy to set yourself up for stable, international growth

Leverage a highly adaptable tool that’s ready to execute your international vision. FinXP provides dependable, flexible access to hundreds of payment methods, allowing your business to provide localised payments services throughout Europe that your customers will love.  

Contact the team at to begin your payments transformation. To stay updated, sign-up to our newsletter here