In globalised world, localised payment options reign supreme
This article was first published by INMA on 02 June 2022
Thanks to growing digitalisation and increasing Internet use, cross-border content consumption is increasing every day.
According to a survey from multi-national professional services firm PricewaterhouseCoopers (PwC), an average of 66% of respondents said they consume cross-border news on a monthly basis, meaning they read or watch news that is produced outside of the country in which they currently live.
PwC’s findings are reflected in the audience data of a number of well-known digital publishers. The digital site of American business publication Forbes has as much as 44% of its core audience outside of the United States, in countries like the United Kingdom, Canada, India, and Australia. American entertainment media company BuzzFeed surprisingly has up to 11% of its core audience in Japan, its second-largest audience base outside of the United States.
For many of these publishers, having such a large global audience reach is cause enough for celebration. However, what many fail to realise is that they might not be doing enough to take advantage of their reach. For example, many publishers still ask international readers to subscribe in U.S. dollars, ignoring the fact that getting them to subscribe would be easier if payments were in a reader’s local currency.
Why local payments are an opportunity
Offering local payment methods is nothing new in cross-border businesses. Many global e-commerce stores use Shopify, which offers businesses the option to add multiple currencies as a payment option on its platform. This isn’t surprising considering the global e-commerce market was forecast to grow by US$100.63 billion between 2020 and 2024.
Publishers would do well to learn from the examples of e-commerce businesses. It’s wasteful for audiences to get to the checkout, only to leave because there is no easy way to make a payment. More than 50% of people say they had canceled a purchase due to a lack of an acceptable payment method. Eighty-two percent of subscribers said the ability to pay with preferred methods is a key feature.
Localised payments are crucial because every country has its own preferred payment methods. For example, although payment cards are a popular payment method in the United States and United Kingdom, this isn’t the case everywhere. In Germany, payment cards ranked behind digital wallets and direct debit as popular methods for transactions.
Offering localised, accessible payment methods becomes even more important when considering that around 1 billion adults around the world remain unbanked. This number doesn’t even count those younger than 18 years old, who don’t have a card or bank account — a key demographic for many publishers.
Success with local payments
Fewcents’ data shows the ability to transact in multiple currencies is crucial for publishers. Since its inception in 2020, Fewcents has had transactions from 42 different countries in 36 different currencies (with the euro covering many countries in Europe) and 34 payment methods.
The five most transacted currencies with Fewcents are the U.S. dollar, Singapore dollar, Indonesian rupiah, Indian rupee, and British pound sterling. While cards made up the top three payment types in the United States the United Kingdom, Apple Pay and PayPal scored equally as high.
Local payment methods reigned supreme in markets such as Singapore (Grabpay, Paynow), India (PayTM, UPI, and PhonePe), and Indonesia (QRIS, Ovo, and Dana). Furthermore, based on a survey conducted by Fewcents, 56% of respondents from the United States, United Kingdom, Germany, and Australia stated they prefer making online payments through digital wallets and local banks over cards.
The data above drives home the necessity of being able to accept payment through local channels. In fact, based on this data, if you are targeting markets like India and Indonesia, your conversions can increase ten-fold over credit cards once you offer local payment methods. Even international networks as extensive as PayPal and Visa still rank second to payment methods that locals prefer.
There’s more than enough evidence that local payments will lead to an uptick in conversions. One study found that 81% of merchants who enabled cross-border payment methods on their sales platforms saw a subsequent increase in consumer count.
E-mail marketing platform Litmus once found that incorporating a local payment method increased its conversion rate five-fold. The platform’s CEO attributed the increase to removing the discomfort and mistrust associated with having to pay in a foreign currency and giving consumers an option that is inherently familiar.
At the heart of it, working to integrate local payment options is all about making the audience comfortable enough to want to pay for what a publisher is offering. If a piece of content is especially interesting, they should not have to jump through hoops to pay for access.
All in all, there’s no reason why publishers and other businesses should fail to emulate the success e-commerce players and other businesses have found with local payments. Not only will adopting local payments help make the customer experience feel more personalised, but it removes an incessant barrier hindering conversion.
Abhishek is a seasoned business leader and technology product manager. He has worked in management consulting with PwC and Altman Solon in Boston, USA before moving to Singapore permanently. In Singapore he has held roles in market development with Ericsson and DHL before branching out to start his own venture, Shoffr, a digital marketing solution that provides online to offline attribution for digital marketers. In 2019, Abhishek sold Shoffr to Affle, a publicly listed ad-tech company in India.