The success of your business hinges on catering to what people want. Otherwise, you risk losing customers (pera na naging bato pa).
Aside from offering unique products and the best customer service, your virtual store must meet the payment preferences of your shoppers, especially if your business is serving customers outside the Philippines.
So what are customers using to pay for their purchases online? Why is this a big deal to your bottom line? And which local payment methods should your business offer?
Also read: Beyond COD: Shifting to E-wallets and Payment Gateways
From add to cart to checkout
Cash is no longer king but convenience is with today’s shoppers. According to Visa’s report “Rise of the Digitally Engaged Consumer,” four in 10 (43%) of consumers in Southeast Asia expect their country to be totally cashless in the next seven years. About 68% of shoppers go cashless in 24 hours and 45% go for three days without using cash.
With many in the Southeast Asia region prioritizing “ease of checkout” as one of the factors in a good online experience, your ecommerce business must provide more than payment gateways accepted in the Philippines.
Although consumers now have more options, this is not to say that credit cards and cash are dead. Buhay pa sila, but shoppers prefer online stores that use local payment methods.
What are local payment methods?
Local payment methods refer to the payment options that are specific to a particular region or country. Although credit cards and global payment gateways like PayPal are widely accepted, localized payment methods cater to the unique preferences and behaviors of consumers in specific markets.
These methods could include digital wallets, electronic bank transfers and even cash-on-delivery (COD) options.
Why are local payment methods important?
1. Improved customer trust
Local payment methods are often familiar and trusted by consumers in a particular region. They expand your ecommerce business because these methods instill confidence in customers; they feel more comfortable using familiar payment options.
Trust is a cornerstone of successful ecommerce transactions, and local payment methods contribute significantly to building that trust.
you offer payments option local to their region or country.
2. Increased conversion rates
By offering familiar payment choices, ecommerce businesses can significantly increase their conversion rates. Consumers are more likely to complete a purchase when they see payment options they trust and regularly use.
A seamless checkout experience, facilitated by local payment methods, ensures that potential customers don’t abandon their carts due to unfamiliar or inconvenient payment options.
3. Reduced cart abandonment
Cart abandonment is one of the most common online shopping problems. Offering local payment methods helps reduce this phenomenon by providing a seamless and convenient checkout experience, minimizing any friction that may lead to customers abandoning their carts.
Cart abandonment reduction translates to a higher percentage of completed transactions and increased revenue.
4. Market expansion
Embracing local payment methods facilitates market expansion. You can tap into new regions where consumers have specific preferences regarding payment methods.
An ecommerce business that tailors its payment options to match the local preferences of different markets positions itself as more accessible and appealing to a broader audience.
#NinjaTip: Get customized cross-border solutions to the Philippines and the rest of Southeast Asia with Ninja Van. Our dedicated team will work with you for seamless international shipping. Consult with our team today!
5. Compliance with regulations
Different countries have varying regulations and compliance requirements for payment methods. Adhering to these regulations is essential for the legal operation of ecommerce businesses in specific regions.
Local payment methods ensure your business’s compliance with local laws and norms, preventing legal issues could affect your brand and interfere with revenue.
What are popular payment methods in Asia?
Alipay
Alipay is a dominant digital wallet in China with more than 1 billion users across the Asia Pacific and elsewhere, offering a secure and efficient way for users to make payments online.
With its wide user base, integrating Alipay can be instrumental for ecommerce businesses targeting the Chinese market. Alipay’s popularity stems from its integration into various aspects of daily life, including shopping, travel and entertainment.
WeChat Pay
WeChat Pay, embedded within the popular WeChat app, is another major player in the Chinese market. Its seamless integration with social and messaging features makes it a preferred choice for many Chinese consumers.
WeChat, with its vast user base, not only serves as a communication platform but also facilitates payments and financial transactions, making it an indispensable part of the Chinese digital landscape.
Asia and many other countries.
GrabPay
Widely used in Southeast Asia, GrabPay is a mobile wallet that originated from the Grab ride-hailing platform. It allows users to make payments not only for rides but also for various services, making it a versatile choice for ecommerce transactions.
GrabPay’s integration with the Grab app ensures a user-friendly experience, and its prevalence in the Southeast Asian market makes it a valuable addition for businesses targeting this region.
OVO Pay
OVO Pay is a popular digital wallet in Indonesia. With its user-friendly interface and various promotions, it has gained significant traction among Indonesian consumers, making it a valuable addition for ecommerce businesses targeting this market.
OVO Pay’s success lies in its strategic partnerships, cashback offers and the convenience it provides to users, positioning it as a preferred choice in the Indonesian digital payment landscape.
Bank Transfers
Bank transfers are a traditional yet widely used payment method in many Asian countries. Offering bank transfer options can cater to customers who prefer this method for its simplicity and familiarity.
But according to a global payment trends report, projections for its use in 2024 across the Asia Pacific will drop to 4.1% from 6.5% in 2020.
COD
Particularly popular in countries with lower credit card penetration or concerns about online security, COD allows customers to pay for their orders in cash upon delivery.
It’s a payment method addressing trust issues and is prevalent in markets where online payment adoption is still growing. Although COD has its advantages, usage will drop to 2.0% in 2024 from 4.1% in 2020.
#NinjaTip: For COD deliveries anywhere in the Philippines, Ninja Van gives you fast COD remittances and COD fees for as low as 1.5%. Sign up for a VIP shipper account to claim this special rate.
Boost conversion and sales with local payment methods
Local payment methods are not just a convenience; they’re a necessity if you’re striving to make a mark beyond your borders. The benefits, ranging from increased customer trust to market expansion, highlight the critical role these methods play in driving conversions and sales.
So don’t limit your online payment gateways to the Philippines and avoid the pera na naging bato pa scenario.
shopping from your store.
As the ecommerce ecosystem continues to evolve, embracing the preferences of your local consumers through tailored payment options is a strategic move that can pave the way for sustainable growth and success on the international stage.
Yes, offer good quality products, but provide a seamless and localized experience that resonates with customers worldwide. Unlock more potential and thrive in the ever-evolving world of global commerce.
More helpful tips for your business:
How 3PLs Help Your Ecommerce Business Grow
Shipping from China to the Philippines: An Easy Guide
Best Selling Products on Taobao that You can Sell Locally
