The Secret to High Global Conversion Rates? Understanding Local Payments

Consumers decide which payment methods are successful and drive market trends. Regardless of the market, the use case or their locations, their preferred payment methods are defined by the ease of the execution process at their merchant of choice. Merchants, of course, want to be able to finalize the sales and provide their customers with smooth experiences. As these merchants operate in a highly globalized and interconnected landscape, especially when offering payment options, any missteps can lead to confusion in the market and lost sales.

The execution risk is magnified when crossing borders, especially for new entrants to a market. As Corina Metternich, head of Local and Alternative Payments EMEA, Payment Acceptance, Merchant Solutions at Deutsche Bank, told Karen Webster, it is essential that global sellers know how to support the right payment methods at the right time in order to build their brands.

The overall trend may be toward digitization, said Metternich, but some markets (such as Germany) are still cash-centric. In other countries, mobile payments are widely embraced.

“What’s happening is that payments are fitting within people’s lives,” said Metternich, who added that we’re headed toward more interoperability in these markets so that a person from Spain can use their preferred payment methods in other countries.

The Most Important Factor

As for payments themselves, she told Webster, “The most important factor [are the payers], really. [Payers] decide what the payment methods and the trends are.” No one wakes up thinking avidly about which payment method they’ll want to use during the day’s activities — they just know they have bills to pay or need to buy some clothes or grab a coffee on the way to work.

As merchants set up shop in new international markets, said Metternich, they’ve got to follow local laws and regulations, while keeping abreast of — and anticipating — the payment methods they must offer to local consumers to keep conversion rates high. Technology is merely an enabler.

“The payment landscape is very broad,” said Metternich, “which makes it exciting on the one hand — but on the other hand, we need to differentiate and prioritize and make decisions on what to do and what not to do.” The desire to offer everything to everyone, she said, is an easy path to take, but understanding clients’ needs first is key.

Infrastructure and Boots on the Ground

“Looking into each individual market,” said Metternich, “you need to understand each one — and the predominance of local payment methods.” Partnerships are key, she said — and Deutsche Bank, with its “Hausbank” approach, offers a range of services for its clients as they enter new markets where trust is one of the most important aspects.

“We have local infrastructure and boots on the ground,” said Metternich. The bank has local teams in each of its current markets, she told PYMNTS, “and no one knows the local [payments] approach better than they do.” Deutsche Bank also builds local acquiring for local payment methods. “We’re not only [a PSP or] an acquirer,” said Metternich, “as a bank, our core strength is also to manage risk — which is one of the biggest assets that we can bring in providing payment services to our clients, particularly, when we are thinking about the global eCommerce environment.”

Deutsche Bank serves global enterprises with local needs, she said, with local partners that understand the markets and can be trusted by those merchants. “We listen to the payment providers in the markets,” she said, “and we always have in consideration the fact that the merchant wants to have a high conversion rate.” She pointed to the wide use of of MB Way and Bizum in Southern Europe as a key example, which have conversion rates north of 90%, and where Deutsche Bank’s partners had signaled to the bank that the service was going to be huge in the region (and thus needed to be offered to Deutsche’s client partners). As a result, Deutsche Bank recently became the first non-Iberian-based bank with acquirer Bizum in Spain.

“You need to be ahead of the trend,” said Metternich, who noted to Webster the importance of the market research and analysis driven by a strong onshore presence and local expertise required to enable the customers with an easy and secure payment experience.