Interviews, insight & analysis on Ecommerce

Retailers selling internationally must harness diverse payment systems

By Tony Preedy, Managing Director, Fruugo

Payments are a vital part of retail, and this is a sphere that has seen a lot of change, much like the retail landscape more generally. Integral to the user experience, payments need to be frictionless. So, to maintain the upper hand and appeal to customers’ needs, sellers must assess the different payment options that are preferred by their existing and prospective customers, and adapt accordingly.

With new payments methods launching, and existing ones advancing all the time, consumers are given increasingly more choice at the checkout, leading them to develop preferences. Retailers that can provide a number of payment options therefore stand a better chance of offering their customers’ favoured methods. In turn, this can boost chances of online shoppers completing their transactions. Furthermore, knowing which payment systems are preferred in different international markets is important to retailers wanting to succeed overseas.

A stalwart of the payments landscape is PayPal, which has grown in popularity given that it allows users to save their card details in a secure place, to then be used across a selection of sites. This eases the customer journey as users no longer need to fill out their details at every transaction and can reduce the risk of fraudulent activity. Simple and secure payment systems like this are on the rise, with the United States, Great Britain, Germany, Italy, Australia, Canada and Luxembourg all preferring PayPal on Fruugo.

In other regions, ‘buy now, pay later’ methods, such as Klarna, are the favourite payment options. This solution allows shoppers to buy an item but pay for it in instalments which allows them to spread out the costs of their purchases. Fruugo has seen Klarna become the prominent payment method in Scandinavia, with Switzerland and Austria also employing it more than other options.

Equally, the familiarity that comes from using a local, trusted brand also appeals to many consumers, as using a company or solution that is well known to the local community adds a sense of security, especially when making purchases from overseas. For example, iDEAL, a Netherlands-based payment method, is Fruugo’s most used in that market and, in Portugal, Portuguese interbank network, Multibanco is the top choice.

With these preferences in mind, and given the amount of payment systems available to consumers globally, retailers need to be mindful about which ones they offer to their customers. Providing consumers with enough choice can contribute to delivering a better user experience, which is integral to winning and retaining customers.

Redesigning payment methods doesn’t have to be complicated. For instance, Ayden, a Dutch third-party payment provider, works with sellers to update the payment methods that they offer customers.

With cross-border selling, however, retailers need to consider several other factors. Most significantly, sellers need to consider repricing to match local currencies, and translating the product information. Furthermore, for selling overseas, retailers must deal with foreign exchange risk, local sales tax compliance, SEO, localised marketing, and fraud screening in that country. For some small, independent businesses, this hurdle can be too great, and therefore restricts overseas growth.

To overcome this, online marketplaces allow sellers to gain quick and easy access to international markets. They can offer services like currency conversion, translation of content and digital marketing that is focused to that location, as well as region-specific customer service. Marketplaces that specialise in cross-border retail are also able to offer their sellers checkouts that are localised according to the preferences of that region, meaning their retailers don’t need to worry about converting their websites. Sellers should choose marketplaces that work on a no-sale, no-fee basis to allow them to conduct their cross-border selling with minimal risk and expenditure.

Current evidence points to the continued growth of ecommerce, and the 2022 Future of Marketplaces Report from Edge by Ascential predicts that third-party marketplace sales will account for 59% of all global ecommerce by 2027. This makes access to international markets crucial for sellers wishing to maximise growth, which in turn requires keeping pace with the fast-changing payment needs of customers in each international market. Sellers that use marketplaces specialising in cross-border trading can access a global audience for their products without having to invest in localised content, marketing, tax management or payment methods. They can simply concentrate on handling the rapid growth of their business that such marketplaces can provide.


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