The Problem: Consumers and businesses prefer their own local payment methods, but most payment methods are not global.
Take a spin around the world, and you'll notice that local payment methods vary considerably.
- In the Netherlands, 59% of online purchases are via iDEAL, a local bank transfer method.
- In Belgium, Bancontact Company is everywhere with 15M cards in circulation (there are more Bancontact cards than Belgians).
- In China, Alipay and WeChat Pay dominate.
- In Singapore and Malaysia, Grab's payment app has over 100M users.
- In Brazil, PIX usage has exploded over the last few years as it links 800 financial institutions with 140M users.
- In India, UPI has reached similar mass adoption with almost 500M users across the country.
The stats tell us:
- Payment links priced in local currency convert better according to Geo Targetly
- Customers will abandon their carts if their preferred payment method isn't available according to Convertcart
If you want to sell globally, trying to integrate and offer all of these local payment methods is no easy feat. Not to mention, you have to figure out an approach to foreign exchange. You have 2 options:
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Let the payment provider convert to your local currency - This is costly as you don't control the FX fee and are charged an additional fee, but at least you settle in your local currency and limit FX exposure.
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Open a bank account that can hold foreign currency (multicurrency accounts or foreign currency accounts) - You assume the currency price risk, but you have more control over the swap rates, which are cheaper.
The excitement around stablecoins is that they are essentially the ultimate local currency, unlocking payments for consumers and businesses in almost any market.
- 500M+ users around the world have stables, making them essentially local currency methods.
- 99%+ of stables are backed in USD (eliminating volatility and local currency risk).
- Available to immediately off-ramp to almost any local currency (Loop Crypto can do 44+ currencies) with competitive rates.
Adding stablecoins as a payment method from day 1 is now essential for any business looking to go global.