These days, businesses need every advantage to gain an edge over their competitors. However, many ecommerce brands are shooting themselves in the foot by not offering local payments, which is an easy way to to win the loyalty of customers and create more conversions.
Local payment methodsSimply put, these are payment options that are popular locally or only available in certain regions or countries. Such solutions generally meet the specific needs of customers in a region and therefore may be somewhat different from the more generalized and interconnected payment methods used around the world.
Local payment methods may include:
- Electronic wallets, which can be used to surf currencies and cryptocurrencies. Examples include AliPay (China), M-Pesa (Kenya), Mobile Pay (Nordic countries).
- Payment Gateways like iDeal in the Netherlands or Interac in Canada, facilitating more secure bank transfers.
- BNPL agreementswhich allow customers to pay for an expensive purchase in multiple payments rather than all at once.
- Cash on deliveryillustrated by Splitit, which is enabled for AliExpress customers in Spain, France and Germany
- Invoiceswhich are of course used when a person buys a product or service and from a merchant from an invoice requesting payment within 14 to 30 days.
However, if you don’t use local payments, your brand could face several significant risks and disadvantages. Let’s take a closer look.
Missed business opportunities
For starters, if you don’t offer local payments to your customers, you’ll miss out on professional opportunities. Customers won’t be as able to spend money at your business, due to local limitations or personal preferences. It doesn’t matter what you offer or how good your marketing is if you don’t make it easy for your customers to spend their money on your THIScommerce site.
You don’t believe us? According to Statista, mobile wallets represented half of global e-commerce payment transactions in 2022 alone. This figure is expected to increase significantly over the next few years. Simply put, if you only offer generalized and global options, customers might simply go to a competitor to use other options. more accessible payment methods for them.
Customer Trust and Convenience
Additionally, not offering local payments can cost you in terms of customer trust and convenience. The easier you are to spend money, the more satisfied customers will feel about your overall business. services, brand and customer service.
In other words, if you offer your customers several local payment methods, in addition to more widespread or general options, they will find it extremely easy and convenient to use your e-commerce website. This can be a huge advantage when trying to cultivate customer satisfaction and loyaltyespecially in the first days of your the lifespan of the company.
The more you can cultivate customer trust early on, the easier it will be for you to maintain the trust of this customer in the long run, especially as your business becomes more sophisticated, offers more products and becomes more valuable. These first visitors to the site convert into paying customers for the coming years!
Currency conversion costs
World currencies all have different conversion rates. For example, the US dollar may be more or less compared to the Euro depending on the overall economy, time of year and other factors.
If you don’t offer local payments, your customers may have to pay additional fees when they convert their local currencies into global currencies, like the US dollar. In other words, your customers will pay more for your products and services, which can leave them with a negative impression. As a business owner, you want to make things easier for your customers, not harder.
Additionally, when you offer many alternative payment methods, not just PayPal or Visa, you can accept currencies from customers in niche or isolated markets while retaining the full value of their original currencies. Then you can hold these currencies until a favorable exchange rate appears.
Compliance and legal issues
Depending on your region or business niche, it may be legally required to offer local payments to your customers. It’s because process cross-border payments comes with a lot of red tape and possible hurdles for your brand to overcome.
For example, when doing business in the EU, you must comply with the GDPR legislation regarding customer transactions and online privacy. It will be easier for your brand to do this if you accept, for example, online wallet transactions from European customers. On the other hand, it will be more difficult to comply with GDPR regulations if you only accept PayPal transactions in US dollars.
In the long run, it’s worth the time and money to offer local payments to your customers around the world. It will just be easier for you to make sure your brand remains compliant and in the good graces of regulatory agencies.
Competitive disadvantage
More generally, not offering local payments to your customers could expose you to a significant competitive disadvantage compared to other companies in the same niche.
Roofing professionals who operate in a hyper-localized market are a perfect example. These days, home service contractors can only expect optimal performance if they integrate local payment methods into their digital dashboards. This is explained by better operational efficiency, higher revenuesand a more pleasant user experience.
Therefore, any contracting company or organization will sooner or later cease to exist if it does not meet the desires of its local customers. Chances are you’ll need to do the same, whether you’re dealing with a very localized customer base or an international customer base with buyers from all over the world.
Bottom line: You don’t want to not offer local payment options to your customers if your competitors already do. You’ll just look like a less-than-stellar alternative.
Reputation and brand image
Believe it or not, your brand’s reputation and overall image can be affected by whether or not you offer local payments to members of your target audience. If you offer a lot payment methodsand it’s usually easy for customers to spend money on your online store, you’ll grow a lot of them better and friendlier reputation.
In the long run, this can be a form of passive marketing. Your customers will spread the word about your brand and its virtues all over the world, and you could see more visitors to your e-commerce store in no time.
Steps to Implement Local Payment Options
To start offering local payment options, it’s a good idea to take a few smart steps up front:
- First, do a lot of market research so you can identify exactly which local payment method your customers use and prefer. This way, you offer what is most convenient and popular for members of your target audience.
- Then use effectively, user-friendly payment processors like 2Checkout to integrate many new payment options in your existing e-commerce site.
- Finally, make sure to do some testing different payments or purchases on your site before launching new payment options for everyone. This way, you can make sure the new payment options work wonderfully before announcing your new accessibility.
Conclusion
Ultimately, the importance of offering local payment options in the the ever-changing world of e-commerce cannot be overstated. Failure to do so can result in missed business opportunities as customers seek more accessible payment methods.
To successfully implement local payment options, market research, user-friendly payment processors and rigorous testing are essential steps. Adopting these strategies will not only improve your e-commerce business but also position it for lasting success in the global market.
This is doubly true when you use a holistic approach, Inintuitive tools like 2Checkout making it easier than ever for you to sell software and SaaS products online to a variety of customers. Find out today!