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Playbook for Modern Expansion – Three Payment-Related Elements You Mustn’t Forget When Going Global

/ Article by Efi Dahan, VP, General Manager, Central and Eastern Europe and Israel at PayPal /

While online sales are almost as old as the internet, it has returned to the center of the startup world since the COVID-19 pandemic during which it found unprecedented growth. Today, four years after the pandemic’s outbreak, the global e-commerce market continues to gain strength, with the value of online sales increasing at a much faster pace than total sales [1]. 

With the ability to reach global markets, startups have unprecedented opportunities to expand their customer base and increase revenues. However, developing a business globally is no easy feat. From local legal requirements and logistical complexities to cultural differences and payment-related issues – startups looking to expand their operations internationally face a variety of challenges that can make or break their success. 

A few months ago at PayPal, we conducted research in which we asked early-stage startups what the biggest barriers they faced when developing their operations outside their home country [2]. One of the most common answers we heard was related to payment management and payment processing issues. Over 43% of companies declared that when it comes to international expansion, they find payment-related issues as challenging, and 26% of businesses indicated them as one of the biggest barriers when going global [3].

Indeed, developing secure and efficient cross-border payment solutions can be far more complicated than it may seem. Startups must cater to diverse payment preferences and ensure robust cybersecurity measures to gain international customer trust. But it’s worth taking the effort. Global expansion has the potential to raise a business to new heights by opening it up to international markets and new opportunities for growth.

So, when it comes to payment-related challenges, what should early-stage startups remember when preparing for international expansion

1️⃣. Local payment methods – a key to unlock new markets

Offering local payment options is critical because it helps build trust and credibility. All over the world, people like to pay with payment methods they know and trust. By enabling a variety of local payment options, companies can provide a seamless checkout process that helps to improve their customers’ shopping experience and reduces abandoned transactions. Research shows that 24% of shoppers say they’re more likely to abandon their cart when their preferred payment method is not available [4].

On top of that, offering local payment methods can help businesses effectively navigate the complex regulatory landscape of various markets. For instance, Strong Customer Authentication (SCA) that came into force in 2019 as a new PSD2 requirement can make it more challenging to process payments within the European Economic Area. However, by offering local payment options that are already compliant with the relevant regulations, companies can help facilitate the payment process and ensure their transactions are in line with local requirements.

2️⃣. The undiscussed value of optimised and localised checkout experience 

Businesses tend to invest a lot in launching in new markets and yet many of them don’t eliminate unnecessary friction in their checkout flows. The most common checkout mistakes include a long and messy checkout process, lack of localization and mobile optimization, or missing the autocomplete feature that simplifies and speeds up the transaction. A recent edition of PayPal’s e-Commerce Index shows that "long and complicated" checkout process is one of the biggest contributors to cart abandonment [5].

A seamless checkout experience is a key factor in converting an international browser into a buyer. Providing your international customers with a convenient and localized checkout, in a local language, currency, and with local payment and shipping options, plays a critical role in improving their experience, boosting loyalty, and driving conversion.

3️⃣. Credibility – the most valuable currency online

Last but not least, let’s take a look at credibility. Being an early-stage startup you’re most probably still in the process of developing your company’s recognition and earning customers’ trust and loyalty. The unknown brand and the lack of social proof can have a negative impact on your sales results, as customers may be hesitant to transact and share their data with lesser-known businesses. This is valid, especially in times of increasing online security concerns and imminent attacks. Building credibility and loyalty among buyers takes time and resources. This is certainly bad news for startups that want to scale fast. The good thing, however, is that there is a way for them to help mitigate these trust issues and strengthen their credibility. By working with a payments partner that has a strong reputation for security, startups can instill trust and confidence in their customers, and as a result, help boost their sales.

To give you an example, one of our recent researches showed that when customers see a PayPal checkout button on the shop’s website, they feel more secure and thus are more likely to successfully complete the purchase process. As a result, having PayPal as a payment option on their website can drive merchants approximately a 30% increase in sales [6].


Any information provided is general only and does not take into account your objectives, financial situation, or needs.

Sources: [1]  Boston Consulting Group, Winning Formulas for E-Commerce Growth report, October 2023

[2]  PayPal and Startup Hub Poland, Early-Stage Startup Index. Challenges in the Era of Cross-Border Commerce, survey conducted in October-November 2023 among 58 early-stage startups operating in Poland.

[3]  PayPal and Startup Hub Poland, Early-Stage Startup Index. Challenges in the Era of Cross-Border Commerce, survey conducted in October-November 2023 among 58 early-stage startups operating in Poland.

[4]  PayPal e-Commerce Index 2024. UK Edition. Fact or fiction: Busting e-commerce myths.

[5]  PayPal e-Commerce Index 2024, UK Edition, Fact or fiction: Busting e-commerce myths, February 2024

[6] PayPal Earnings - FY 2022, based on PayPal internal data and includes Australia, France, Germany, Italy, Spain, U.K., and U.S. and does not include Japan (Paidy).

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