What are local payment methods?

Local payment methods are payment methods that are popular or dominant in specific regions or countries. Examples include iDEAL in the Netherlands, Bancontact in Belgium, SEPA Direct Debit in Europe, Alipay in China, and LINE Pay in Japan.

Accepting local payment methods is critical for merchants selling internationally because customers strongly prefer to pay with their local payment method rather than credit cards. Merchants who only accept credit cards miss 20% to 50% of potential sales in regions where local payment methods are dominant.

If you are selling internationally, accepting only credit cards is a significant competitive disadvantage.

This guide explains the most important local payment methods by region and how to implement them.

Table of Contents

  1. What are local payment methods?
  2. European Payment Methods
  3. Asian Payment Methods
  4. Latin American Payment Methods
  5. Implementing Local Payment Methods
  6. Best Practices for Local Payment Methods
  7. Frequently Asked Questions (FAQ)

1. European Payment Methods

Europe has diverse local payment methods that vary by country.

SEPA Direct Debit (Pan-European)

  • Countries: All SEPA countries (EU + Iceland, Liechtenstein, Norway, Switzerland, UK).
  • Description: Direct debit from customer’s bank account.
  • Use Case: Recurring billing, subscriptions.
  • Market Share: 40% to 60% of online payments in Europe.

iDEAL (Netherlands)

  • Market Share: 60% of online payments in Netherlands.
  • Description: Direct bank transfer.
  • Use Case: One-time purchases.

Bancontact (Belgium)

  • Market Share: 50% of online payments in Belgium.
  • Description: Direct bank transfer.
  • Use Case: One-time purchases.

Giropay (Germany)

  • Market Share: 20% of online payments in Germany.
  • Description: Direct bank transfer.
  • Use Case: One-time purchases.

Przelewy24 (Poland)

  • Market Share: 70% of online payments in Poland.
  • Description: Direct bank transfer.
  • Use Case: One-time purchases.

2. Asian Payment Methods

Asia has the most diverse and rapidly growing payment methods.

Alipay (China)

  • Market Share: 50% of online payments in China.
  • Description: Mobile wallet linked to bank account or credit card.
  • Use Case: All types of purchases.

WeChat Pay (China)

  • Market Share: 40% of online payments in China.
  • Description: Mobile wallet linked to bank account or credit card.
  • Use Case: All types of purchases.

LINE Pay (Japan)

  • Market Share: 30% of online payments in Japan.
  • Description: Mobile wallet linked to bank account or credit card.
  • Use Case: All types of purchases.

GCash (Philippines)

  • Market Share: 50% of online payments in Philippines.
  • Description: Mobile wallet.
  • Use Case: All types of purchases.

Paytm (India)

  • Market Share: 40% of online payments in India.
  • Description: Mobile wallet.
  • Use Case: All types of purchases.

3. Latin American Payment Methods

Latin America relies heavily on local payment methods.

Boleto (Brazil)

  • Market Share: 40% of online payments in Brazil.
  • Description: Bank transfer slip.
  • Use Case: One-time purchases.

OXXO (Mexico)

  • Market Share: 30% of online payments in Mexico.
  • Description: Cash payment at OXXO convenience stores.
  • Use Case: One-time purchases.

Pix (Brazil)

  • Market Share: 50% of online payments in Brazil (growing rapidly).
  • Description: Instant bank transfer.
  • Use Case: All types of purchases.

4. Implementing Local Payment Methods

To accept local payment methods, you have several options.

Option 1: Use a Global Payment Processor

Use a processor that supports multiple local payment methods (like Stripe, Adyen, or Numus Payments). The processor handles the integration with local payment networks.

Option 2: Integrate Multiple Processors

Integrate with multiple processors, each specializing in specific regions. This is more complex but may offer better rates.

Option 3: Use a Payment Aggregator

Use a payment aggregator that consolidates multiple local payment methods into a single integration.

5. Best Practices for Local Payment Methods

Best Practice 1: Offer Local Payment Methods in Your Target Regions

Research which payment methods are dominant in your target regions and prioritize those.

Best Practice 2: Display Local Payment Methods Prominently

In your checkout, display local payment methods prominently. Do not bury them.

Best Practice 3: Optimize for Mobile

Many local payment methods are mobile-first. Ensure your checkout is optimized for mobile.

Best Practice 4: Provide Clear Instructions

For unfamiliar payment methods, provide clear instructions on how to complete the payment.

Best Practice 5: Monitor Conversion Rates

Monitor conversion rates for each payment method. If a payment method has low conversion, investigate why.

6. Frequently Asked Questions (FAQ)

Should I accept local payment methods if I only sell domestically?

No. Focus on the payment methods your domestic customers prefer.

How much do local payment methods cost?

Fees vary by payment method and processor. Typically 1% to 3%.

Can I use a single processor for all local payment methods?

Some processors support many local payment methods. However, for best rates and service, you may need to work with multiple processors.