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How Multiple Localised Payment Methods Make a Difference

Enhance freight procurement with localized payment methods.

In an increasingly digital world, the growth of online B2B transactions is undeniable, with a global market value surpassing 14.9 trillion USD in 2020¹, a figure exceeding that of the B2C market by over five times.  

Despite this phenomenal growth, the logistics industry is still behind the adoption curve when it comes to offering digital payment gateways. A missing piece of the puzzle lies with freight carriers overlooking a crucial aspect: localization, especially when it comes to dealing with freight forwarders in cross-border settings.  

Freight carriers or other vendors such as 3PL, ports, warehouses failing to address localization can adversely impact the procurement experience, where freight forwarders encounter unnecessary hurdles such as: 

  • Unfavourable Payment Methods: Freight forwarders may have to adopt payment methods that are less preferred due to high platform costs, affecting profit margins. 
  • FX Fluctuations: Converting currencies before making payments, especially for cross-border transactions, exposes freight forwarders to foreign exchange rate fluctuations. 
  • Bank Account Proliferation: In the absence of diverse payment methods, freight forwarders may be compelled to open accounts with different banks, causing inconvenience. 

Neglecting localization in this manner is not only a missed opportunity but also a risk. The Asia-Pacific region, which commands 60% of the global B2B eCommerce market share², offers immense potential.   

To effectively localize in a given market, offering multiple payment options and methods is highly recommended. But why does offering multiple payment methods matter? 

By offering a range of local payment methods, freight carriers underscore their certainty and seriousness about entering new markets, especially by aligning with the predominant ones in that market. For instance, including Paynow, card payments, and digital wallets for B2B transactions in a market like Singapore signals trustworthiness and an understanding of local market trends. 

Additionally, accepting local currency payments shields freight forwarders FX fluctuations. Forwarders gain greater certainty regarding their monthly cash flow and can better manage financial stability, especially for regular in-market payments. 

While offering multiple localized payment methods is a significant step, selecting the right methods depends on the target market. It's crucial to find a payment platform that integrates with the dominant local payment method.  

Some payment methods to consider include: 

  1. Cards: Card payments are a universal choice for online transactions. Developed markets like Canada, the United States, the European Union³, and Singapore have high card penetration. In Singapore, card payments constituted over 75% of electronic transactions in 2020⁴. 
  1. Digital Wallets: Popular in emerging markets in Southeast Asia and India, digital wallets such as GrabPay and QR code payments offer convenient payment options. 
  1. FAST Local Bank Transfer: Reliable and readily available, local bank transfers in the local currency are common in markets like Singapore, Thailand, and Malaysia. 
  1. Pay Later Arrangements: This is prevalent in markets where businesses are willing to defer the payment due date, such as the US, Canada, and most of the EU. 

By offering multiple payment methods that include preferred local payment methods when expanding your business into a new country, you can gain a competitive edge and improve user experience. It's a critical factor in establishing solid brand credibility towards the local community, which in turns ensures financial stability for freight forwarders in various markets. 

You don't have to set up a payment infrastructure from scratch; you can work with a specialized freight payment solution like CargoWALLET, which covers local payments in 45+ Currencies & 150+ Countries. 

To learn more about how CargoWALLET can help transform your payment processes, download our brochure.  

 

Sources: 

  1. In-depth Report: B2B e-Commerce 2021 | Statista 
  2. Global Business-to-Business E-commerce Market Size, Share & Trends Analysis Report by Deployment Model (Intermediary-oriented, Supplier-oriented), by Application, by Region, and Segment Forecasts, 2021-2028 (researchandmarkets.com) 
  3. Credit card usage by country | Statista
  4. E-Commerce Payment Trends in Southeast Asia | Fintech Singapore (fintechnews.sg)