Your Guide to International Payment Preferences by ZOOZ
Part 1 of 2
If you want to succeed in international retail, you need to be local. Although it may seem counterintuitive, data shows that successful cross-border e-commerce depends on your ability to provide a familiar payment experience for every location. The most crucial step in the process is ensuring that customers can use the payment methods with which they are most comfortable. While credit cards may be the preferred payment method in the US, this rule doesn’t necessarily apply in other areas worldwide. In fact, many countries prefer local alternative payment methods.
This two-part guide describes customers payment preferences based on countries. If your company is considering expanding into these markets, you should familiarize yourself with their payment method preferences. To optimize your end users experience, consider integrating these into your checkout offerings.
Latin America: Payments are always localized in Latin America, with each country featuring preferred methods for its population.
Argentina – The AcceptGiro invoice system is popular here, as is COD. Most buyers pay cash using payment service providers (PSPs) like PayU, PagoFacil and RapiPago.
Brazil – As a rule, Brazilians have fairly low credit card limits, so almost half of their online purchases are made via credit card purchases, which they pay off in installments. Boleto Bancário is another popular payment method, with a payment process comparable to wire transfer and cash payment methods. After receiving a prefilled Boleto Bancário bank slip, users can either pay online with cash at any bank branch or via authorized processors such as supermarkets or a regular banking point. A third method popular among Brazilians is the MercadoPago secure payment system, which features a mobile app with credit card reader to allow charges to be processed with a tablet or smartphone using a QR code.
Chile – The most popular payment methods are credit cards, debit cards and bank transfers, as well as offline payments performed through Servipag.
Mexico – PayPal is the top online payment method, followed by debit and credit cards. Another popular method is cash on delivery (COD), due to consumer skepticism regarding product quality and delivery.
Europe: Most European countries have alternative payment methods based on local preferences.
Belgium – Bancontact is a very popular payment method in Belgium, accepted by more than 80% of its e-commerce sites.
Finland – 40% of Finnish consumers pay by online banking payment. Four banks offer their own real-time banking solutions as payment methods. Additionally, Klarna, a Swedish e-commerce company, provides payment services for online businesses. In 2012, the company reached the milestone of one million customers in Finland.
France – Many consumers prefer a local credit card scheme called e-Carte Blue. This card accounts for half of all e-commerce transactions, with PayPal serving as an additional player. e-Cart Blue offers strong authentication from 3D-Secure, which adds an additional security layer for card transactions, allowing cardholders to authenticate themselves through an OTP (One-Time Pin) or password. Many customers in France will only complete their transactions if this security method is in place. However, depending on the country, 3D-Secure can actually have the opposite effect, with customers mistaking it for a phishing attempt and canceling the transaction.
Germany – Invoicing is very popular in Germany; nearly 60% of online consumers choose to pay an invoice upon receipt of their goods. Customers also use PayPal and three bank-to-bank payment methods: Sofort/Klarna, GiroPay and Überweisung.
Italy - Traditionally, Italians preferred to pay by cash. However, after cash transactions exceeding EUR 1,000 were outlawed in 2012, credit cards became extremely popular.
The Netherlands – iDEAL is a popular payment method in online stores. When checking out, the customer authorizes an on-file payment instruction. Once payment is approved, the amount due is debited from the customer’s account and transferred to the merchant’s bank account.
Poland – Sofort/Klarna is the leading payment method in Poland, but Dotpay is also popular. It incorporates all of the country’s favorite payment methods, including credit cards, e-transfers, online transfers, cash payments, mobile payments, e-wallets and vouchers, and online installments. Poland-based PayU is another popular payment service provider that has a leading position in the Central and Eastern European e-payments market. Up to 75% of Polish e-payments are made through the online banking process known as ‘Pay-by-links’. Companies that accommodate this solution are more likely to reach the Polish market.
Sweden – Real-time bank transactions are popular here, with ten banks offering their own solutions. Invoicing is also widely used. Stockholm-based Klarna, one of Europe's largest banks, provides payment solutions for 60 million consumers across 70,000 merchants in 18 countries.
UK – Almost half of all online transactions are paid by credit card, but debit cards account for some 35% of e-commerce transactions. PayPal is the country’s third most popular online payment method.