Payment Options

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Payment Options

Offering international shoppers the option to pay in their local currency can help improve customer conversion rate and sales according to reports and case studies from Connox, PhotoBox, Moonglow Jewelry and Griffin Technology. Customers are more likely to buy from a site repeatedly when allowed to pay in their local currencies.

According to research by EDC, accepting domestic payment methods by online merchants can result in incremental sales and also unlock specific customer segments. It was also found that most customers prefer a local form of payments compared to international payment methods due to security considerations. Offering international customers payments method in their local currencies can help lead to an increase in market penetration, increase in customer conversion rates, sales and lower cart abandonment rates and 1 in every 6 international shoppers are more likely to abandon their carts when there's a mismatch between expectation and site content delivery, especially when it comes to payments. From PayPal’s Cross-Border Consumer Research, it was reported that 73% of shoppers prefer to pay in their local currencies and 45% of shoppers feel uncomfortable making a purchase in a foreign currency.

At eCommerce Worldwide Cross-border Summit in 2017, experts at the summit estimate that 93% of international shoppers prefer to pay in their local currencies and by offering international customers the option of paying in their local currencies, eCommerce businesses can boost their sales thereby, expanding their reach and access to a wider target market and also maintain a credible international presence. 33% of international shoppers are likely to abandon a purchase if pricing is in U.S. dollars only, 92% of shoppers prefer to make purchases on sites that price in their local currency according to a study by Shopify.

According to a study by Lengow, 62% of consumers refrain from buying products from international online shops cos of payment security reasons and this can be eliminated by offering the prices in local currency of the customer and research by multichannelmerchant.com shows that 25% of international shoppers are more likely to leave a website if payments are not available in their preferred local currencies.

effects of localizing payments for international shoppers

PhotoBox

  • The company accepts a local form of payments in 18 countries and this has been a key factor to the company's success in the countries.
  • PhotoBox saw an 8% increase in customer conversation across the countries in which it operates largely due to allowing customers process payments in their local currencies.

Moonglow Jewelry

  • Moonglow Jewelry on allowing their customers to purchase their products in their local currencies saw an increase in their conversation rates in the countries they operate.
  • The company saw an increase in conversation rate of 428% in Germany, 397% in Saudi Arabia, 581% in the UK and 124% in UAE after enabling customers to make payments in their local currencies.

Griffin Technology

  • Griffin saw an increase in their overall sales and customer satisfaction after localising their online offering by allowing customers to make payments in their local currencies.

Connox

  • Connox saw an average of 20% monthly increase in revenues in their French and Danish e-shops after the eCommerce company localized their products (offered customers the option of making payments in their local currencies).

Methodology

We began the research by reviewing industry reports by reputable sources such as Bain, Accenture, PWC, Deloitte, McKinsey, KPMG, Statista etc as well as credible web domains that offer news articles and trends about the industry. Using this strategy, we were able to understand the payment industry and trends surrounding the industry and impacts of payment methods and how it affects the overall shopping experience of international shoppers. A search was also conducted on articles, blog posts, independent research published by payment merchants, eCommerce companies.

To determine the impacts of offering international shoppers the option to pay in their local currency in relation to conversion rates and sales, we used case studies of eCommerce companies that moved to offer localized payment options for their customers in countries in which they operate in.

Sources
Sources