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What Are the Best Local Payment Methods?

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Last editedMay 20223 min read

With the rise of ecommerce, businesses are no longer restrained by geographical borders. By utilising local payment methods, businesses can optimise the checkout experience for customers in different countries, and acquire more sales as a result.

In this post, we’ll take through what local payment methods are, and some of the more popular payment options in the UK and other countries.

What does local payment methods mean? 

Local payment methods are commonly used payment methods in different countries and geographical locations. They include both the most popular methods, as well as payment options which are uniquely available in that particular country or region.

For example, in Spain, like many places in the world, credit cards are a popular local payment method. However, Bizum is a popular mobile payment solution only available in Spain. These two payment methods are therefore regarded as local payment methods in Spain.

In the Netherlands, meanwhile, the online banking solution iDEAL direct is one of the most popular payment methods. Again, it is only available in the Netherlands, making it a local payment method.

As an e-commerce merchant with customers in different countries, it’s advisable that you acceptlocal payment options. This is because it will allow you to reach more customers and improve the payment experience — a combination which will likely lead to more conversions.

Types of local payment methods

There is a large range of online payment methods out there for e-commerce. Understanding which payment methods are popular in the countries where your customers reside will inform your decision as to which payment methods you should offer.

Below are some of the most common online local payment methods: 

Digital wallets

In 2020, digital and mobile wallets comprised 45% of global ecommerce payments. This makes them the most popular online payment method internationally.

And this is no surprise given how quick and convenient they make the checkout process. Once customers have paid on one occasion, their payment details are stored, making any follow-up purchases able to be completed in just a few clicks.

In France, PayPal is the most popular digital wallet with more than 10 million active users. In the UK, meanwhile, Apple Pay is the most popular choice.

Credit cards 

Credit card payments remain a popular local payment method around the world. Some countries have national credit card brands in collaboration with Visa or Mastercard. These cards can typically only be used domestically. If your commerce business wishes to accept payments from these local cards, you must ensure your credit card payment processor supports Visa and Mastercard.

In the US, Visa and Mastercard are hugely popular payment methods, closely followed by American Express.

Bank transfers

Bank transfers are direct transfers of funds from one bank account to another. This can be done domestically or internationally, and either online, in-branch or over the phone. Customers who don’t have a credit or debit card tend to prefer to use this payment method.

In Denmark, France and Germany, bank transfers remain a popular payment method. However, the main issue with bank transfers on the merchant’s end is that they have no control over the payment initiation and little visibility regarding the payment status. With GoCardless, businesses can collect payments directly from customer bank accounts via Direct Debit, putting merchants in greater control of incoming payments.

Buy Now, Pay Later (BNPL)

Buy Now, Pay Later options allow customers to make their payment in instalments rather than at once at the time of buying. This allows customers to make larger purchases without needing to take out additional credit. It’s also usually interest and fee-free. However, customers must stick to their repayment plan, or risk late fees, debt and a damaged credit score.

GoCardless integrates with BNPL providers enabling them to easily collect payment instalments. It does this by providing a recurring payment solution via Direct Debit. Leading global retail bank Klarna is an example of a business that uses GoCardless for its popular BNPL option “Pay in 4”.

Peer-to-peer (P2P) mobile payment apps

Peer-to-peer payments apps were initially used to transfer money to friends and family. However, P2P solutions are now utilised by the ecommerce sphere, and customers can use the apps to carry out online purchases.

As we already mentioned, Bizum is a popular P2P payment app in Spain. The PayPal owned Venmo and Cash App are other examples of popular P2P payment apps across the UK and Europe.

What are the best local payment methods?

The best local payment types for your ecommerce business type will depend on the countries your customers are making payments in. To optimise sales, it’s crucial that you do your research to determine the preferred local payment methods in relevant countries and ensure that you offer them on your ecommerce site. 

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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