What Are Local Payment Methods? Why Are They Important in Ecommerce?

Accepting local payment methods can help your business succeed in global markets. Find out why you should take local payment methods and learn how to do it.

Expanding your ecommerce business to audiences in new parts of the world can drive impressive profit growth. Global online sales increase by about 24% every year according to Digital Commerce 360, with a worldwide spend of nearly $4.3 trillion in 2020 alone. 

If you're interested in an international audience, you’ve come to the right place. We’ll tell you everything you need to know about local payment methods, so you can prepare for success in new markets.


What Are Local Payment Methods?

Local payment methods are popular ways to pay in certain geographic regions. Common examples include the following area-specific options:

  • Debit networks
  • Digital wallets
  • Cash vouchers
  • Banks offering electronic transfers
  • Mobile payments
  • Invoicing systems

Accepting the local audience's preferred payment methods can expand your market and build strong customer relationships.

The Different Types of Local Payment Methods

Although specific local payment methods vary by country and region, most fall into a few common categories.

Bank Transfers

Customers can pay online with electronic bank transfers, even if they're in a different country. Your payment service provider will receive the person's account details along with a reference number to identify the transaction. 

For example, consumers in Belgium can use Bancontact to make payments from their bank accounts. They just need to enter a code in the network's dedicated app.

Buy Now, Pay Later

This flexible method lets customers make installment payments for purchases. Buy Now Pay Later (BNPL) plans will have a projected $20.4 billion market share by 2028 based on data from Grandview Research.

BNPL plans are especially popular in the United Kingdom and Australia. One local installment method, SOFORT, is available throughout Europe. It's widely used by consumers in Spain, the Netherlands, Germany, Italy, and the UK.

Credit Cards

Visa and Mastercard operate in most countries, but they aren't the only options. Some nations have their own credit cards for domestic use. 

Usually, you can accept a country's local cards as long as you already take credit cards. They're often co-branded with larger networks. For example, UnionPay is the most common credit card in China, and members can use it all over the world.

Digital Wallets

Customers use digital wallet apps like PayPal in almost half of global online sales. In addition to international options, many nations and regions have local digital wallets. Examples include Japan Credit Bureau's popular mobile app and UK digital wallet Skrill.

Open Invoicing

This local payment method requires you to send an invoice along with the customer's order. They must either pay by the deadline or return the products. 

Buyers don't make any type of payment before they get the item, so open invoicing carries a big risk for your business. However, it's very popular in Germany, where it ranks among the most common ways to pay for online purchases.

You may also want to accept payment at delivery in some markets. Cash-on-delivery transactions are common in Slovakia and other Eastern European nations.

Peer-to-Peer Payment Apps

These apps let people pay friends and family members for small expenses. In many countries, customers can also use peer-to-peer (P2P) payment methods for online purchases. 

For example, WeChat is one of China's most popular P2P apps. It also has a large market share for online transactions as merchants increasingly accept this widespread payment method.

What Types of Businesses Should Accept Local Payment Methods?

If you plan to sell products and services to customers outside your home country, your business needs to accept local payment methods. Otherwise, you may not reach a wide enough audience since people prefer to use trusted, familiar ways to pay. 

Accepting local payment methods offers advantages in most industries. More than three-quarters of global ecommerce transactions use local payment methods. Your business should consider adding local methods to your checkout process if:

  • You've invested in an engaging user experience but you aren't seeing sales to match in your global audiences.
  • You've entered an international market but have low conversion rates.
  • You're seeing low sales from abroad despite marketing in other regions.
  • You're in the B2B space.
  • You run or sell products on an online marketplace. This sector makes up an estimated half of global retail sales.
  • You have a freelance business

How Local Payment Methods Can Help You Grow Your Ecommerce Business

Accepting local payment methods can expand your ecommerce business by:

  • Reducing cart abandonment that occurs when someone can't use their preferred way to pay
  • Encouraging customers to trust your business, which can increase loyalty and retention
  • Making the checkout experience easy even if they haven't shopped with you before
  • Eliminating payment frustrations that reduce conversion in global markets
  • Exposing your brand to a wider audience, increasing available sales and profit
  • Removing friction that can interrupt the purchase process
  • Remaining competitive with other sellers serving your market

Accepting local payment methods may also shift liability for chargebacks from your business to the app or service. Often, these products have policies in place to cover loss for their customers.

What's the Best Way for an Ecommerce Business to Accept Payments? 

Pay.com provides everything your business needs to accept payments from customers all over the world. Our solutions let you offer multiple ways to pay at checkout, including both global and local payment methods. 

Catering to audiences in other areas can potentially expand your business far beyond your expectations. In addition to our global payment solutions, Pay.com can support your growth with:

  • Strong security measures your customers can trust, including Level 1 PCI DSS compliance
  • Advanced authentication through the 3D Secure 2.0 system, reducing the risk of fraudulent transactions by confirming customer identity
  • API integrations so your developers can create a customize checkout experience that fits seamlessly with your brand's existing ecommerce journey
  • Transparent flat-fee rates, making it affordable to invest in a powerful payment platform that scales with your business

Click here to create your Pay.com account now!

The Bottom Line 

As ecommerce expands across the globe, it's smart for your business to accept preferred payment methods in international markets. You can improve conversions and increase sales with this strategy, supporting long-term growth and impressive profits.

Pay.com makes it easy to accept payments from all over the world. You'll just select the ones you want to accept through your Pay Dashboard. We support every transaction with the highest industry-standard security measures, so even brand-new customers can trust that you'll protect their private information.

Click here to get started with Pay.com now!


How can my ecommerce business accept local payment methods?

Pay.com makes it easy to accept preferred local payment methods. You'll be able to meet the needs of your international customers, encouraging sales in new markets. You can easily add or remove payment methods through your Pay Dashboard.

Click here to get started now!

What does ‘local payment method’ mean?

Many regions and countries have exclusive ways to pay. These local payment methods aren't necessarily available worldwide. They may include digital wallets, peer-to-peer payment apps, credit cards, digital wallets, and buy now pay later services. It makes sense to accept local payment methods popular among your target markets to encourage sales among this audience.

What is the most common payment method?

Digital wallets are the most common worldwide payment method according to data from Statista. Credit cards were next with 21% of the market share, followed by debit cards (13%), bank transfers (7%), buy now pay later (3%), and cash on delivery (3%).

What are some examples of local payment methods?

Examples of local payment methods include peer-to-peer apps like WeChat, which is popular in China; digital wallets like the UK product Skrill; installment plans such as SOFORT, which is widely used in Europe; and electronic transfers from local banks such as Bancontact in Belgium.

Meet the author
Andrea Miller
Andrea Miller has been a writer and editor for more than two decades. Specializing in business and finance, she has written for some of the major websites in the financial sector. Outside of work, she spends most of her time with her family and enjoys hiking, yoga, and reading.
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