Global Payment Method Guide: Localize Your eCommerce

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Anta Pattabiraman

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April 19, 2022

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Expanding your payment options allows you to do business in more markets around the world. In an economy where digital e-commerce is growing rapidly, this represents a golden opportunity to increase your customer base and multiply your revenue. Read on to learn what you need to know about global payment method options.

We’ll start by covering what global payment methods are and why they’re important in today’s economy. Then we’ll provide an overview of the major types of global payment methods in use today and some of the top global payment method providers you should be familiar with. Finally, we’ll discuss what type of technology you need in order to process global payment methods efficiently.

What Is a Global Payment Method?

A global payment method is a way of paying for international transactions where the financial institution issuing the credit or debit card to the customer and the institution processing the payment for the merchant are located in different countries. For example, if a customer in the United States uses a MasterCard credit card to make a purchase from Amazon’s Mexican website, this constitutes a global payment, and the global payment method used in this case is the credit card. Other digital global payment methods include debit cards, digital wallets and digital installment arrangements where the customer buys now and pays later. Global payments also may involve payment methods where customers visit a physical location to pay in cash for digital payment services.

The global payments market has grown significantly in recent years due to a number of factors. These include the growth of e-commerce, the increasing use of mobile phones and the trend away from cash toward digital payment methods, among other factors. While the COVID-19 pandemic temporarily slowed down global payment growth, it gave long-term impetus to global payments by accelerating the shift to digital e-commerce.

According to long-term tracking and projections by global consulting firm McKinsey, global payments reached record growth in 2019 before falling in 2020 for the first time in 11 years due to the pandemic. However, trends in 2021 point toward a rebound to 2019 levels and resumed growth over the next five years. McKinsey projects that between 2020 and 2025, the market will grow from $1.9 trillion to $2.5 trillion globally.

How Do Businesses Benefit by Offering Global Payment Methods?

Offering customers global payment method options helps businesses in several ways. Advantages include:

  • Expanding market reach: Allowing global payment methods allows companies to reach customers located in other countries, multiplying potential sales.
  • Increasing checkout conversion rates: Over half of customers have abandoned shopping carts because they didn’t see their preferred payment method, according to a study by Internet retail research firm ECC Köln.
  • Cutting costs: Alternate payment methods can be cheaper for merchants than paying standard credit card transaction fees.

These diverse and valuable benefits add up to a compelling case for accepting global payment method alternatives.

Types of Global Payment Methods

Global payment methods fall into a number of categories. These include:

  • Credit and debit cards
  • Digital wallets
  • Bank transfers
  • Buy now, pay later installments
  • Offline payment methods

Let’s look at a brief breakdown of each of these types of payment methods and some major examples illustrating each category.

Credit and Debit Cards

Credit and debit cards are among the most familiar forms of payment methods. Credit cards enable the cardholder to borrow from a line of credit issued by a bank or other financial institution, while debit cards draw from an account at a financial institution. Certain credit and debit options are popular in specific geographical regions. For example, UnionPay is widely used in China, while RuPay is popular in India.

Digital Wallets

Digital wallets are digital apps or devices which enable buyers to draw from a credit line or bank account. Popular global digital wallet solutions include Vodafone, Amazon, Samsung, American Express, PayPal, Apple Pay, MasterCard and Alipay.

Bank Transfers

Global bank transfers involve wiring money from a bank or financial institution in one country to one in another. In the United States, the most familiar method is the Automated Clearing House (ACH) system run by the National Automated Clearing House Association (NACHA). Examples in other countries include the Single Euro Payments Area (SEPA) and Open Banking Europe (OBE) in Europe, Unified Payments Interface (UPI) in India and PayNow in Singapore.

Buy Now, Pay Later

Buy now, pay later (BNPL) is a digital version of traditional layaway plans. Buyers can purchase a product or service and receive it immediately in return for a commitment to pay off in installments. In some cases, a down payment is due at the time of checkout. Leading global BNPL providers include Affirm, Afterpay, Klarna, Laybuy, PayPal, PayL8r, Perpay, Zip (previously Quadpay), Sezzle and Splitit.

Offline Payment Methods

Some payment methods involve customers visiting a brick-and-mortar location to pay in cash for digital payment services. For example, in the United States, Walmart allows customers to wire money through a variety of methods, including Walmart2Walmart, Western Union and MoneyGram. In Mexico, a similar service is provided by OXXO.

Top Payment Method Providers Globally

Different global payment method providers are popular in different regions. If you’re an ecommerce merchant, it’s important to be familiar with the ones which are popular in your particular niche. Here’s a quick rundown of some of the most important global providers to be familiar with.

Visa

Headquartered in the United States in Foster City, Calif., Visa is the biggest global payment provider outside of China. Their most popular payment products are credit cards, debit cards and prepaid cards.

MasterCard

Based in the United States in O’Fallon, Mo., MasterCard is a longtime rival of Visa. They issue credit cards, debit cards and prepaid cards.

Maestro

Maestro is a brand of debit card and prepaid card issued by MasterCard. Debit card versions of Maestro draw from linked bank accounts, while prepaid cards do not require a bank account. Maestro cards can be used for in-store payments and for ATM withdrawals, and most also can be used for online purchases, depending on the policy of the issuing bank. Maestro is scheduled to be phased out in Europe in 2023.

UnionPay

UnionPay, also known as China UnionPay, is a Chinese financial services provider which ranks as the biggest provider of global payment methods in the world, although the vast majority of their customer base is within China. Their services include credit cards, debit cards, mobile payments, online payments, and electronic funds transfer at point-of-sale locations.

ApplePay

ApplePay is a mobile payment and digital wallet solution provided by Apple. It runs exclusively on Apple devices such as iPhones, Apple Watches, iPad tablets and Mac computers. It allows users to make payments at brick-and-mortar point-of-sale locations, in apps that use the iOS operating system and online through the Safari web browser.

Google Pay

Google Pay is Google’s online payment and digital wallet product. It supports online payments, in-app payments and payments on Android devices such as mobile phones, watches and tablets.

PayPal

PayPal provides online payment services which facilitate online money transfers. They support mobile, online and in-store purchases. They issue debit and prepaid cards, and they partner with MasterCard to issue branded credit cards.

Klarna

Klarna is a Swedish-based financial technology company that has emerged as a global leader in the buy now, pay later space. They launched in the United States in 2015. They support both online and in-store purchases.

How Inai Supports Global Payment Method Transactions

The inai global payment integration platform is designed to make it easy for digital businesses to connect with all the payment methods their customers use. It supports over 300 payment methods, localized by market. For example, for checkout carts geared toward customers in the United States, inai integrations currently include:

  • ApplePay
  • Google Pay
  • Alipay
  • PayPal
  • ACH
  • Samsung Pay
  • Venmo
  • Visa
  • MasterCard
  • Discover
  • American Express
  • JCB

Other integrations are available for other countries. Rich, prebuilt UI components make it easy for web development teams to set up customized checkout processes which support global payment method transactions in as little as 60 minutes. You can view and manage all transactions from a single dashboard interface.

Accept Global Payment Method Transactions to Increase Your Revenue

Global payment methods are ways of paying for transactions where the financial institution issuing a credit or debit card to a customer is located in a different country than that processing the transaction for the merchant. This allows merchants to reach an international customer base, increase checkout conversion rates and save costs on credit card transactions.

Types of global payment methods include credit cards, debit cards, digital wallets, bank transfers, BNPL installment plans and offline authorization of digital payments. Leaders in the global payment market space include MasterCard, Visa, UnionPay, ApplePay, Google Pay, PayPal and Klarna. Different payment methods are preferred by customers in different regional markets.

The inai global payment integration platform makes it easy for digital businesses to support the preferred payment methods of customers in their target markets. Book a demo to see how easy it can be to set up your global payment checkout cart.

About the author
Anta Pattabiraman is the co-founder and CEO of Inai, a global payment stack simplifying native payments within a single integration. Over the last 5 years, he has worked with 200+ businesses ranging from SMEs to Bigtechs.
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