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The rapid growth of e-commerce across the globe has spurred the development of thousands of online payment providers and methods, from regional banking apps to digital wallets to cash-based workarounds for online purchases. Much like currencies, the popularity and usage of these payment methods are highly regional, reflecting the local preferences and technological advancements of each specific region.
Online merchants that take the time to research and understand the unique payment preferences of different regions and countries across the world are able to broaden their customer base and tap into new markets.
Online payment methods by region
1. Europe
Credit/Debit cards
Across Europe, credit and debit cards continue to be a popular method of purchasing goods and services online. Although the rise of digital payment methods, particularly among younger consumers, has introduced Europeans to more payment options, cards still have a significant presence in the market.
BNPL services
Buy-Now-Pay-Later apps are an increasingly popular payment method for Europeans, as they allow shoppers to pay for items in instalments rather than requiring them to pay the full amount upfront. Three commonly used BNPL services in Europe are:
- Klarna - a Swedish BNPL service popular across Europe, with a large user base in Germany, Scandinavia, and the UK.
- Clearpay - an Australian BNPL service that’s gaining popularity in the UK.
- Scalapay - an Italian BNPL service that’s popular in Italy and gaining popularity across other European countries, including France, Germany, Spain, and Portugal.
Digital wallets
Digital wallets allow consumers to securely store their card details for quicker and easier online payments. Apple Pay and PayPal are among the most commonly used digital wallets across Europe, although there are also many regional wallets that cater to different local preferences and regulatory requirements.
Country-specific payment methods
Many countries in Europe have unique payment methods used almost exclusively within their borders. Notable examples include:
- BLIK - a mobile banking app popular across Poland.
- Bancontact - the primary card-based payment method used in Belgium.
- iDEAL - the main online payment method in the Netherlands.
- TWINT - Switzerland’s leading online payment app.
- Cartes Bancaires - the leading card payment network in France.
2. North America
Credit/Debit cards
Despite the rise of digital payment methods, the majority of consumers in North America still use credit and debit cards as their primary means of payment when shopping online. The most popular card brands in the region are Visa, Mastercard, American Express, and Discover.
Digital wallets
Digital wallets like PayPal, Google Pay and Apple Pay are commonplace in North America, allowing consumers to store their card details to make quick, secure payments via fingerprint or facial recognition. Other commonly used digital wallets popular in the North American market include:
- Cash App - a versatile mobile wallet that can be used to pay for items online, transfer money to friends, and invest in stocks or cryptocurrencies.
- Venmo - commonly used by Americans for peer-to-peer payments, but increasingly accepted by online retailers as a simple, secure digital payment method.
BNPL services
Like in Europe, BNPL apps are rising in popularity among North Americans, giving consumers the flexibility to spread out the cost of their purchases over time. Klarna continues to grow in popularity, as does the Australia-based BNPL provider Afterpay and the US-based Affirm (founded by one of the co-founders of PayPal).
3. Latin America
Credit/Debit Cards
Card payments remain popular for online transactions in Latin America, representing nearly half of all online payments made across the region. The widespread adoption of international card networks like Visa and Mastercard, along with the establishment of local card schemes, has made card payments a reliable and familiar option for many online shoppers. Local card schemes unique to Latin America include:
- Hipercard (Brazil)
- Elo (Brazil)
- Naranja (Argentina)
- Redcompra (Chile)
Digital bank transfers
Digital bank transfers are another popular payment option in Latin America, enabling direct account-to-account or transfers for all payment types, including online purchases. Many online shoppers prefer this option for its security and convenience, as they can pay directly from their bank accounts without the need for a physical debit card. Two of the most-used providers of this service are:
- Pix - a digital bank transfer platform used for all types of domestic payments in Brazil.
- SafetyPay - a digital bank transfer platform used across several Latin American countries.
Online cash payments (online-offline hybrid)
In many Latin American countries, it’s common for consumers to pay cash for items purchased online. After placing their order online, shoppers visit a local store to complete the payment in cash. Popular providers of this service include:
- OXXO
- 7Eleven
- Rapipago
- Pago Fácil
4. Asia-Pacific
Asian digital wallets
Unlike many other regions, cards are not the dominant payment method in much of Asia. Although Japan has high card usage, with JCB being the dominant card network, in many Asian countries, including China, digital wallets are the preferred online payment method. Popular wallets in Asia include:
- AliPay - one of two primary payment methods used in China (the other being WeChat Pay), this popular digital wallet enables both online and in-person payments. .
- WeChat Pay - an off-shoot of the social networking app WeChat, this mobile wallet enables all types of payments, as well as a range of other financial services via the WeChat platform.
- Doku and Ovo - two of the leading digital wallets in Indonesia.
- GrabPay - a Singapore-based digital payment “super-app” also used for ride shares and food delivery, popular across South Asia.
- GCash - a popular digital wallet used in the Philippines.
- Boost - a Malaysian-owned digital bank with an all-in-one fintech app used for both online and offline payments.
“Konbini” payments (online-offline hybrid)
Across East Asia, although primarily in Japan, the popular e-commerce payment method known as “Konbini” allows consumers to pay in person for online purchases. When purchasing items online, shoppers receive a unique code that they hand deliver to a clerk at their local convenience store. The shop employee uses the code to process a cash payment for the online purchase. Konbini payments are designed for consumers who want to buy items online but don’t have access to cards or e-wallets, as well as those who simply prefer to pay in cash.
5. Oceania
Credit/Debit cards
Cards are the dominant online payment method in Oceania, particularly in Australia and New Zealand. Mastercard, Visa, and American Express are widely accepted by e-commerce merchants across the region, making them an easy and reliable choice for both local shoppers and tourists purchasing items online.
BNPL services
Buy Now Pay Later apps have seen a significant uptick across Oceania in recent years, and their market share continues to grow. In Australia, home to one of the first established BNPL apps, Afterpay, it’s estimated that there are 7 million active BNPL accounts across the country. Despite recent regulatory changes requiring more stringent credit checks for BNPL users, it’s expected that these instalment payment methods will remain a popular choice among online shoppers, particularly those in younger generations.
Digital wallets
As in many other regions, digital wallet usage is on the rise in Australia and New Zealand, with Apple Pay, Google Pay, PayPal, and Samsung Pay all popular options. As seen in other regions across the world, consumers in Oceania are consistently switching from cards to digital wallets due to the greater convenience and security they offer.
6. Middle East & North Africa (MENA)
Credit/Debit Cards
Card payments are the dominant payment method for online shoppers across the Middle East and North Africa. Visa and Mastercard are the primary card networks in the region, although there are also country-specific card companies, such as KNET, Kuwait's local payment scheme and card network.
Digital wallets
Like in Europe and North America, the MENA region has also experienced the progression from traditional card payments to digital wallet payments in recent years. Popular digital wallets in the region include:
- Payit - a digital wallet from First Abu Dhabi Bank (FAB) that’s popular in the United Arab Emirates.
- PayBy - another leading digital wallet used in the UAE.
- stc pay - an integrated digital wallet in Saudia Arabia.
- QNB Pay Wallet - a digital wallet for domestic payments within Qatar.
- BenefitPay - a digital wallet and money transfer app used in Bahrain.
7. Africa
“Mobile money” payments
Due to a more limited banking infrastructure, Africa was one of the first regions across the globe where mobile phone payments gained significant traction. Unlike digital wallets, which store and process bank card details, phone-based payments in Africa are typically linked directly to the user’s mobile phone account. These transactions are processed by the mobile phone network via SMS or USSD codes and can be made even on very basic mobile phones. Popular mobile money providers include:
- M-PESA
- Orange Money
- MTN Mobile Money
- Airtel Money
The future of online payments across the globe
Although this overview has made it clear that digital wallets are quickly rising to dominance in regions across the globe, it’s also shed light on the organic growth of regional payment methods built around local preferences and technological infrastructures.
For multinational companies that do business in regions across the world, it’s important to understand the role that local shopping habits, technology, and existing institutions play in each country’s payment landscape. In many cases, concepts that seem counterintuitive on paper, like cash-based payments for online purchases, end up being the exact solution consumers need. It’s essential to remain flexible and open to new ideas in order to adapt to evolving payment trends as they emerge. For online merchants hoping to tap into international markets, it’s essential to partner with a payment service provider that understands the nuances and idiosyncrasies of each region.
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FAQs
How can online retailers and hospitality businesses best accommodate the diverse payment preferences of different countries and regions?
E-commerce businesses that sell, or would like to sell, across several different countries can approach payments in the same way they approach other cross-border barriers, such as language and currency differences: by thoughtfully tailoring the shopping journey to each regional marketplace. This often means developing a separate website or mobile app for each country or region and integrating the preferred payment methods of each specific locality.
For hospitality businesses hoping to cater to tourists from around the world, making it easy for international guests to view prices in their local currency (Multi-Currency Pricing) and pay according to the prevailing exchange rate (Dynamic Currency Conversion) will boost sales and increase customer satisfaction.
What are the benefits of integrating regional and local payment methods?
Merchants that integrate regional and local payment methods into their online payment systems are able to tap into new markets, broaden their customer base, increase global awareness of their brand, and, ultimately, boost revenue. Adding more regional and local payment options to existing markets also has benefits, as it reduces cart abandoments and increases conversion rates.
Beyond the financial benefits, catering to local preferences also helps companies build customer loyalty within a region and demonstrate their commitment to customer service.
What are some challenges businesses might face when integrating regional payment methods?
Challenges businesses face when integrating regional payment methods include:
- Initial market research - Understanding the unique payment preferences and behaviours of consumers in each region requires extensive market research.
- Regulatory requirements - Complying with regional regulations and laws across multiple countries can be complex and time-consuming.
- Maintaining and updating multiple payment methods - As a business integrates more payment methods to its online gateways, often across multiple, regional websites, it can require significant resources to monitor and maintain each payment method.
These challenges can be easily overcome by partnering with a payment service provider that specialises in international payments. It’s vital to work with a payment provider that has the expertise and infrastructure to facilitate payments across multiple regions, while also providing ongoing support and maintenance to keep the systems running smoothly.
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