Understanding the best payment options for online enterprises targeting a global audience is critical, yet in order to sell in certain local areas, you must first understand how preferences differ from one region to the next. Some markets, for example, have a stronger preference for cards, whereas others prefer eWallets.
There are numerous methods of payment which are used globally, which aren’t necessarily similar to the “usual suspects”, which I’ve written an article about here.
In a country, local payment methods can vary from 10% to 50%, so keep that in mind when building an E-Commerce presence in a new market, especially if it’s an “exotic” territory compared to your home market.
In general, most European buyers prefer cards or eWallets for their online purchases, with different markets showing distinct preferences for certain online payment methods.
PayPal is popular in Germany, with 32% of online consumers using it. In comparison, just 16% of French customers use PayPal. Germans are also quite fond of SEPA Direct debit, which they utilize for one-time and recurring payments alike. SOFORT and Klarna is also very popular in the German market.
In the Netherlands, iDEAL is the most popular payment option, with 44% of consumers selecting it as 2Checkout’s 2019 digital benchmarks report shows. It comes as no surprise that online customers like iDEAL, a standard internet banking-based payment method with a high adoption rate on the internet.
By contrast, in countries with a lower banking penetration, such as Russia, eWallets are more widely embraced. In Russia, payment methods include Qiwi wallet, Yandex Money and WebMoney.
Shoppers in France, which has a high degree of banking penetration, may pick their cards. However, as a merchant, you must still be aware of their preferences. According to 2Checkout’s benchmark research, 14% of customers here prefer Cart Bancaire, a local payment option that is only available in this market.
In Turkey, 17% of consumers prefer local credit cards, but they do so because these local credit cards have installment capabilities. Here, 80% of card transactions are done using installment cards.
North America and Latin America
In the Americas, credit cards and debit cards continue to be the most popular online payment methods, with over 50% market share in each region. Beyond cards, however, preferences differ considerably.
Most North Americans use their PayPal or other preferred digital wallet, whereas most South Americans rely on a local credit card with installments. In Brazil, for example, almost a third of internet buyers opt for local credit cards with installments. If you’re selling on the Brazilian market but haven’t set up Boleto Bancario payments yet, it’s time to call it a day. Brazilian consumers use a variety of alternative payment options, with 13% paying with their Boleto Bancario and 28% utilizing local credit cards that include payments. Only 20% of the cards in use here support foreign currencies, so unless your payment provider accepts these payments, you’ll need a Brazilian business partner to have a strong positioning in the market.
In the Asia-Pacific region, mobile/digital wallets are preferred by more than half of all online transactions.
When it comes to digital wallets, and shopping through mobile, Chinese consumers are the most enthusiastic, with AliPay and WeChat Pay taking up the majority of the entire market. They have over 1 billion users, a penetration rate of over 90%, and a market share of well over 90% between them. Alipay has 520 million active users; WeChatPay has 300 million active users per month, meaning that if you are to operate in the Chinese digital space, it is a prerequisite to have one or both of these payment methods. Asia Pacific’s second-favorite method is bank transfers, which follow cards.
In Japan, more than 5% of people prefer Konbini, a cash-based payment method that allows customers to place orders online and then pay in a convenience store. This is in particular a payment option which is used by individuals who don’t hold a credit card, as they can pay with cash in their local convenience store. The convinence stores include – but are not limited to – 7/11, FamilyMart and Lawson. JCB payments are also very popular among the Japanese consumers, with the card’s large usage – more than 55 million JCB cards are in use in the country.
Due to the fact that a large part of African internet customers do not have access to conventional banking services, mobile payments and e-wallets as an alternative online payment approach are becoming more popular in these areas.
Mobile wallets are popular among buyers in Africa who purchase online, yet cash on delivery is preferred in countries like Egypt, while others still use prepaid cards.