BY ANDREA ELLIOTT, Founder, r2 retail resources
THE geographical borders within which we used to shop have been virtually eliminated, and our ability to access products and brands worldwide continues to grow. As a result, it’s exciting to see so many Canadian companies going global with their online business. However, far too often it’s said that, “We can now ship to over 100 countries, but we just aren’t seeing the results we expected.”
A way to improve online results is by offering a blend of payment options that maximizes share and conversion for each country. Customers that are shopping globally need to have confidence in the site they’re on. Buying product from foreign suppliers requires trust, and friction caused by limited payment options needs to be reduced. Secure payments are essential for success.
One way that companies can reduce that friction in the customer’s shopping experience is to adapt to their payment preferences within each local market. Many consumers perceive local forms of payment as more secure. By providing this option, you can unlock international segments and increase revenue. Offering the right blend of payments significantly impacts conversion in the checkout and it is not uncommon to see revenue increases of 15-20 per cent.
To do this, it’s key to review countries that are important on your growth plan. Those countries where demand for your products is higher, and your brand has a strong following on social platforms, is the place to start. These countries will be the ones to get local with payment options.
Another critical point is to be aware of certain local cards (debit or credit) in some countries that are not allowed to process international transactions, like Maxima in Turkey. This means local acquiring is a key feature of successfully trading in those markets. Let’s take a look at a couple of countries that may be important for a number of Canadian brands internationally, to understand payment preferences of those consumers.
Currently, e-commerce accounts for more than 20 per cent of all retail in the country.
eWallet products dominate online payments, with Alipay at 48 per cent market share. Unionpay follows in terms of share at 18 per cent. It’s critical to note that Mastercard/Amex/JCB/Visa have only 1 per cent share in the country. If those are the options you are offering your Chinese customers, you have a significant disadvantage in growing your direct to consumer business there.
Germany was an early adopter of alternative payment methods. eWallet and Real Time Bank Transfer methods dominate at 22 per cent and 38 per cent respectively. Again, Mastercard/Amex/ Visa combined are less than 18 per cent.
- Know your key markets and develop localized payment options
- Ensure you have global eWallet capability
- Get direct payment relationships or;
- Work with a third-party vendor that has established global payment options
The world needs more Canadian retail. One way for us to ensure our presence is to open up the right payment options for our global customers!