Chinese Customers Prefer Local Payment Methods For Shopping Online
Due to eCommerce merchants’ need for local payment options, expansion into the Asia-Pacific (APAC) area is still challenging.
It was made very clear in the recent Citcon study “The Emerging APAC Opportunity: Local Payment Methods Edition,” which surveyed 500 executives and found that poor localization is increasing cart abandonment rates in 41% of companies that sell to APAC without offering localized payment options.
Contrast this with the 32% cart abandonment rates of retailers selling in the APAC area and accepting local payment methods.
Wei Jiang, president and chief operating officer of Citcon, claims that this is a problem from a market perspective since businesses from the West mistakenly believe that the leading card networks of North America and Europe operate as effectively in APAC.
According to Jiang that many companies make judgments based on their own experience. Visa, Mastercard, and international card networks are generally in charge of payments for persons who live in the United States, Canada, and the United Kingdom. Understanding why individuals in APAC and many other nations don’t truly utilize or have access to global card schemes can be challenging. It is more difficult to comprehend how massive the hurdle is from that vantage point.
The survey indicated that, in addition to the low (13%) adoption rate of local APAC payments, just 1.8% of eCommerce players even acknowledge that APAC consumers prefer local payments made in local currencies.
Noting that “payments are always the last thing to consider” for many merchants when they expand internationally, According to Jiang’s experience, your conversion rate will be significantly reduced if you don’t have the appropriate payment option available throughout the checkout process. Your whole international growth strategy or the company might be in jeopardy.
Every Country Has Challenges
In striking contrast to the West, APAC comprises dozens of countries, and most of them have a native digital wallet or payment software that their citizens prefer.
Jiang said that every nation brings a little bit of a different issue, underscoring the challenges of catering to such a diversified market.
Some nations are heavily influenced by their mobile wallet, he claimed. Let’s look at China as an example, where Alipay and WeChat Pay are quickly gaining market share. There are several local credit card or debit card schemes in other nations, such as Korea, if you travel there.
He added that even in markets like Singapore, which have a relatively high card adoption rate for Visa or Mastercard versus other APAC countries, “local payment methods can still help increase your conversion rate.”
This applies to payment plans like purchase now and pays later (BNPL). Jiang claimed that more extensive baskets that convert might occur since BNPL frequently carries more significant restrictions in APAC.
For instance, “Atome” and “GrabPay Later” are two options the merchant may consider.
Dynamic Display Contributes
Although the issue of local acceptability for offshore eCommerce sites may be resolved, doing so will need a lot of work. This is where gateways like Citcon come into play, providing more options for merchants.
According to Jiang, people understand that a solution is required to reach such nations. The difficulty is that it’s challenging to do. There would likely be over 100 distinct payment methods available in APAC if you visited every country and enabled the local payment option.
To reduce the high cart abandonment rates that are now typical, it’s not only a matter of offering more payment methods; it also involves delivering the right solutions to specific markets at checkout.
“Another challenge for eCommerce to think about as they add those payment methods is how they can display the right payment method in front of the consumers,” Jiang said. “They need to display the payment methods to the needed consumers dynamically. You don’t want to display a Korean payment method to a consumer from Japan.”
Once more, a local payment gateway like Citcon is the best option under these circumstances.
Jiang continued as they aim to show a solution that enables eCommerce to lower the setup costs on the platform, taking such payments from the whole APAC as a one-stop service. They may significantly enhance the advantages and value of retail and eCommerce.
