Payment localisation is a critical, however often overlooked aspect of business operations. It’s not just about having a convenient payment method for your customers — it’s about ensuring that you’re doing everything you can to support your global ambitions.

Payment localisation is the process of adapting your global payment options to the local payment environment of the countries where you’re doing business.
For example, an EU-based company would be in the best position to offer popular payment options in the EU, while a UK company will need to cater to popular options in the UK.

To do this effectively, you’ll need a clear strategy for adapting to local payment methods, as well as a suitable infrastructure to support it. Let’s explore this in more detail.

Why is payment localisation important

There are two main reasons why payment localisation is critical. Firstly, to protect & inform the customer – they will know exactly how much they’re spending. Secondly, to protect your business – if you are paying too much to offer products or services, this can certainly affect your profits.

A lot of businesses struggle with local currency adoption, and that’s why they may choose to localise costs within their business. They can adjust their prices depending on the exchange rate, or they could use local currencies.

The idea is not to alienate any customers and cover your bases regarding things like currency conversion. Businesses with international reach can use a dynamic currency converter to allow their global clients to pay in their local currency wherever they are buying. There is little to no foreign exchange risk with this service, either for your business or customers.

The cost of achieving payment localisation is typically relatively high, but there are ways around it. One of the most cost-effective solutions is to use a payment gateway that supports multi-currency payments. Payment gateways are a convenient solution for businesses that don’t have a lot of staff or excessive overhead. They can also help to diversify your offerings and lower costs efficiently.

How can you implement payment localisation?

The first step to localising your payments is to identify where your customers are located. Once the geographies that your business covers are understood, you can start thinking about ways to make existing payments even more convenient.

Secondly, pay close attention to local legislation. It’s common to see vastly different payment terms and taxes from country to country, and the terms related to currency conversion can be complex and far-reaching. So, if you’re planning to make changes to your product or service offering, it’s essential to look before you leap. Examine your competitors’ payment options. Identify which features may simplify things for your customers (less banking requirements, currency conversion, direct debiting). And, of course, do the essential market research.

Thirdly, to ensure that you can expand internationally as quickly as you can domestically, ensure that your infrastructure and supply chains are robust. Having the ability to offer the same product or service in multiple countries means you’ll be able to reach a larger audience which can only be beneficial for your business.

Beyond just extending support for simple payments, payment localisation can affect your customer engagement, as well as your marketing efforts. For example, companies may be able to focus on offering inclusive pricing and a more tailored experience to a specific group of customers without having to adapt their entire marketing efforts.


What to consider when localising your payment process

1) Local customer preferences

Your business needs to take local habits into account – customer payment preferences may differ quite drastically from one country or region to another. For example, in China, UnionPay, Alipay, and WeChat Pay are the three primary payment methods. At the other end of the spectrum, in Europe, Germany and The Netherlands rely heavily on direct debits; Malta prefers prepaid direct debit cards like Revolut, while France uses a local card payment network called Carte Bancaire, which works with Visa and Mastercard. North America is reliant on credit cards, while Latin America is primarily cash-based. Therefore, integrating a geography’s most popular payment systems into your checkout process will create a familiar and safe experience for your customers.

2) Payment options that fit your business model<

If your business sells a subscription-based service or product, it’s equally important to consider local preferences and adapt your payments strategy to your business needs. For example, handling recurring transactions with cards is easy. Still, many of the most popular payment methods don’t support recurring transactions, typically because they require users to authenticate every single transaction. In this case, choosing a pre-paid quarterly or annual subscription model would be more suitable and would minimise friction for yourself and your customers.

In Europe, one of the biggest challenges is a high transaction decline rate due to incorrectly entered account details or insufficient funds. Using a payment gateway that allows for real-time fraud detection and customer authentication would reduce the rates of declines, in turn also reducing chargeback volumes.

3) Targeted loyalty programmes

Customer and payment localisation allows you to focus on developing a convenient and comprehensive product or service. For example, using one payment method may allow you to offer your customers more loyalty discounts, rewards and tracking capabilities.

In Europe, SMEs are focused on speed to market via a quick and seamless integration across different countries, so using a payment gateway that provides analytics to help shape loyalty programs will help tap into local customers’ behaviour, identify patterns and trigger real-time offers at critical moments in the customer’s journey.

By following a global strategy of offering convenient and familiar payment methods in as many currencies as possible, companies can establish their brand presence abroad and not only cater to but also influence their customers’ payment behaviours.