What are local payment methods and why your business should accept them

Local payment methods are region-specific options like digital wallets, eCash, bank transfers, and BNPL, which cater to local preferences and financial infrastructure, increasing trust and reducing friction for customers.

Offering local payment options can increase conversion rates and reduce cart abandonment by providing familiar, preferred ways to pay. These methods expand customer reach by enabling businesses to serve underbanked populations through cash-based solutions.

Accepting local payments provides a competitive advantage and helps businesses comply with local regulations, positioning them as legitimate and customer-centric in new markets. For example, a single integration with a provider like Paysafe can give access to over 260 payment methods across 120 countries, simplifying global expansion and local payment acceptance.

Let’s take a closer look at the different local payment methods available and why they’re so important.

Types of local payment options and providers

There are several local payment options available, allowing merchants to transact with an even larger customer base, including the unbanked:

eCash

Some consumers choose to pay in cash when buying goods and services online. They purchase a voucher card in-store (with cash) then activate the card online, instantly transferring the balance to their eCash account. The money can then be spent like any other regular online transaction.

The eCash brands that consumers know and trust change by region. For example, PaysafeCard and PayPal are widely used in Europe. Whereas in South America, PagoEfectivo is a popular choice.

Digital wallets

A digital wallet is an app that securely stores your payment information or money so you can easily access funds to pay online. Many consumers see this as a more private and secure way to pay, as you don’t need to share your personal information or card number to make a purchase.

While some digital wallets, like Skrill, have a global customer base, others dominate in specific countries. Alipay, for instance, is the most popular e-wallet in China, with 652.4 million monthly users.

Bank transfers

The option to pay by transferring funds directly to a business’s bank account is popular across some regions.

However, depending on where you’re attempting to grow your business, you may find that there’s a go-to provider for bank transfers. Generally, this provider will have an extensive network of relationships with the local banks that they can leverage to serve local customers.

Buy now, pay later (BNPL)

Short-term financing options that let consumers make an upfront payment and pay off the rest of the purchase in instalments have grown increasingly popular. By 2028, the global market is set to reach a compound annual growth rate (CAGR) of 44.6%.

While some ‘buy now pay later’ brands, such as Klarna and Afterpay (known as Clearpay in Europe) offer services across continents, there are others attempting to corner local markets. For example, Czech banking app Twisto focuses on the Czech Republic and Poland, where the BNPL market is in its early stages.

Cash on delivery

Rather than paying upfront, Cash on Delivery (CoD) allows a customer to pay at the point they physically receive goods. Payment is made in cash, by card, or by local bank transfer, but only after the customer has inspected their goods.

COD is particularly popular in regions where cash usage remains high. It is also a useful local payment option for markets where confidence in digital payments is low.

Invoice

Invoice as a local payment method refers to a “buy now, pay later” model where customers receive an electronic invoice or billing statement after making a deposit or purchase. This invoice can be paid later through various channels such as online banking, mobile payment, or physical payment locations.

Historically, invoicing has been reserved for B2B transactions. However, B2C versions are becoming more common, such as integrating invoices with mobile billing services, where the deposit appears on the customer’s phone bill.

Which types of businesses should accept local payment methods?

Every business should accept local payment methods to expand its customer base. However, localized options are vital for some industries:

eCommerce businesses

Local payment methods directly increase conversion rates by reducing cart abandonment and building trust in the transaction process. Localization enhances the customer experience, supports faster transaction processing, and improves approval rates by aligning with regional banking infrastructures.

Perhaps most importantly, local payment options allow eCommerce businesses to reach underbanked marketplaces.

Online marketplaces

Local payment options help marketplaces to reduce checkout friction, expand market reach, and improve customer satisfaction. Local payment options are also extremely useful for facilitating customer-to-customer transactions.

B2B businesses

Local payments simplify transactions for international customers, reduce processing delays, and lower cross-border fees. Local payment options are a powerful tool for ensuring regulatory compliance in local markets and for reducing operating bureaucracy and overheads.

Trade services

Trade service customers often prefer to pay by cash, so local payment options provide a digital alternative that is fast, secure, and trustworthy. Choosing local payment methods helps trade services businesses to improve cash flow, reduce payment delays, and diversify their customer base.

Professional services

By offering convenient local payment options, professional services providers can reduce friction and accelerate invoice settlement. This is an important tool for improving cash flow and strengthening customer relationships.

Why accept local payment methods?

There are several important reasons your business should accept local payment methods:

Raise customer confidence

When launching in a new country, it takes time to grow brand awareness and earn people’s trust. Offering the payment options that people are accustomed to seeing helps position your brand as legitimate and in tune with local needs.

Gain a competitive advantage

If your competitors have yet to provide local payment methods, adding them to your checkout can incentivize customers to buy from you instead. Tailoring the payment experience by country can also encourage repeat purchases, as customers are drawn back to brands that offer their preferred payment methods.

Increase transaction rate success

Local payment providers will often work closely with the banks in their region to improve payment acceptance rates. As a result, they can deliver a reliable service.

Higher conversion rates

Local payment options increase customer trust, reduce friction, and provide access to preferred payment methods. Allowing customers to transact in their preferred way will reduce the risk of cart abandonment.

Improve customer reach

By providing eCash and other local payment options, businesses can reach a larger customer base, including those without bank accounts.

Start accepting local payment methods today

Taking advantage of local payment methods doesn’t need to be hard work.

With Paysafe, you have access to more than 260 payment methods across 120 countries, including a range of local options and all through a single integration.

So, wherever you take your business next, you can accept local payment methods with Paysafe.

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