International e-commerce sales are expected to be worth $1.9 trillion within the next three years. According to a recent study, a large and growing proportion of these sales will be paid for by methods other than a credit card. In the US, most online payment is currently made by credit card, but digital wallets like PayPal and Google Wallet are becoming more popular. In the rest of the world, and especially in rapidly growing markets like China, India, and Brazil, alternative methods of payment dominate.
Alternative payment methods encompass payment technologies including digital wallets, mobile payments, real-time bank transfers, and offline credit transfers. Retailers hosting their Magento stores with Nexcess are well placed to take advantage of this shift in payment preferences in domestic markets, as well as international markets, which are expanding more rapidly than domestic ones.
The WorldPay survey indicates that over 80 percent of international consumers say that having a choice of payment methods is important to them, and over 40 percent say that having a wider choice would encourage them to spend more money. In addition, 45 percent of the 19,000 international shoppers surveyed said that they make purchases from overseas. That’s a huge and rapidly growing market that e-commerce retailers can’t afford to ignore. China alone has an e-commerce growth rate of 58 percent, with 40 percent of sales using alternative payment methods, especially the Alipay digital wallet, which occupies a similar market position to PayPal in the US. In Germany, credit card use is much rarer for online purchases than alternative methods, with $40 billion of sales using mostly offline bank transfers.
A Nexcess-hosted Magento store can very easily tap into these markets through the addition of alternative payment options using extensions. Because of Magento’s enormous international popularity and open-source nature, developers have created extensions for most of the world’s popular payment methods, and they can be added with minimal hassle. Retailers who want to take advantage of the growing market among Chinese urbanites for status-enhancing American goods can use an Alipay extension, and those looking to sell to the closer-to-home Brazilian market will need to be able to accept payment through Boleto Bancário. Even if a retailer prefers to focus on the domestic market, consumers spend more money and abandon fewer transactions if they can choose a payment method convenient to them.
Are you thinking about how your business can be grown by selling to international consumers? Let us know in the comments section below!