Hyperlocalization: Toward a Personalized Future for Payments

Hyperlocalization represents a growing and potentially transformative trend in the payments industry, marking what many consider the next frontier in how consumers and businesses interact and transact. This approach focuses on tailoring payment services and product offerings to users' specific needs, preferences and behaviors at the local or even neighborhood level, providing a more personalized and efficient experience.

As technology and evolving consumer preferences reshape the payments landscape, the need for businesses to stay ahead increases. Driven by consumer demand for convenience, efficiency, choice and security, e-commerce is witnessing a paradigm shift in payment dynamics. 

In 2024, shoppers are seeking a seamless customer experience, including more payment methods, seamless cross-border payment journeys, and streamlined omnichannel shopping experiences. In an era where payment technology is at the center of growth, understanding and embracing these trends will be critical for businesses looking to maximize revenue, optimize performance, and stay ahead of the changing payments landscape.

Many companies are now adopting hyperlocalization as a crucial strategy for global expansion. This approach allows them to closely align with each target market's varying payment habits and regulatory requirements, ensuring their offerings are tailored to local demands.

Projections suggest that by 2028, cross-border sales will account for 33% of all e-commerce transactions, up from US$1.6 trillion in 2023. In support of this trend, recent studies have found that 57% of online buyers make international purchases, and most look for payment methods they are familiar with.

So, how can businesses hyperlocalize their checkout processes to drive conversions and revenue in new markets? The key is choosing a payments partner equipped with deep local expertise and the ability to customize your payments mix on a market-by-market basis. Let's consider that hyperlocalization involves adapting products, services and content to a local audience's specific needs and preferences. It surpasses general localization by focusing on detailed geographic areas, individual cities or neighborhoods. This strategy leverages local data to understand consumer behavior and purchasing habits, providing a more personalized and relevant shopping experience.

In the payments sector, this means offering specialized solutions and complying with local legal requirements, which is particularly relevant for industries such as retail, travel, hospitality, and subscription services where understanding the local context significantly increases customer engagement.

Developing an effective hyperlocalized payment strategy requires recognizing the importance of regional payment systems. For example, the Netherlands' iDEAL system is popular due to its real-time transactions and is supported by central Dutch banks, which handle 70% of the country's e-commerce payments. Pix has spread rapidly in Brazil: more than 65% of the population uses it for its instant transactions and mobile-friendly design. Similarly, POLi offers secure internet banking transactions directly to merchants in New Zealand. Understanding these and other local payment systems is vital for businesses looking to succeed in these countries.

Access to significant payment methods in all markets worldwide allows you to scale internationally and offer a ubiquitous e-commerce experience to all customers, regardless of where they are located. Successfully navigating international markets means customizing payment processes, including digital wallets, Buy Now Pay Later (BNPL) options, instant bank transfers and cash vouchers, to meet the unique needs of each market.

A company’s ability to connect with diverse consumer bases through hyperlocalization is an important differentiator. A Segment study found that 44% of customers prefer to shop with brands offering personalized experiences, while 71% reported frustration with experiences that seem impersonal.

The drive toward localized and personalized experiences resonates across all merchant touchpoints, and payment technology plays a crucial role in delivering these experiences. With the proper payment technology partner, businesses are better equipped to meet the challenges of global expansion, improve their competitiveness, and forge meaningful connections with a worldwide customer base at the local level.

Hyperlocalization in the payments industry promises to improve the consumer experience through more personalized and relevant services, and represents a significant opportunity for companies to explore new market strategies and business models. However, success in this next frontier will require a delicate balance between personalization and privacy protection, and a deep understanding of local market dynamics. It will be essential to adopt a global but hyperlocalized approach when it comes to acquisitions. 

Without a doubt, a payment orchestration platform would allow businesses to connect with multiple acquirers in different regions and automatically route transactions to the most relevant and profitable acquirer. Increasing successful approval rates by implementing a Payment Orchestration Platform (POP) could give your business valuable revenue-generating opportunities.

It is important to note that the benefits of payment orchestration go far beyond the points described here. We recommend reading our study on Payment Orchestration to understand more about why so many companies are looking to implement a POP, and valuable information about the implementation process.