Local payment methods vs. card schemes: Key differences

More than 77% of online transactions in Asia are made using local payment methods—not credit cards. In Latin America, bank transfers and installment payments dominate. And in Europe, methods like iDEAL and Bancontact often outperform Visa or Mastercard in both speed and trust.

Yet many businesses expanding globally still rely almost entirely on international card schemes. The result? Lower conversion rates, higher decline volumes, and frustrated customers who simply don’t see their preferred payment option at checkout.

For merchants, the difference between local payment methods and international card schemes isn’t just technical—it’s strategic. It affects customer trust, cart completion, processing costs, and even how quickly funds settle.

What are local payment methods?

Local payment methods (LPMs) are payment types tailored to a specific country or region. They include direct bank transfers, mobile-based systems, and digital wallets that are closely tied to domestic financial infrastructure. These methods are often more trusted and widely used than international credit cards—especially in markets where card penetration is limited.

Examples by region:

• Netherlands – iDEAL
• Brazil – Pix
• Poland – BLIK
• Belgium – Bancontact
• India – UPI
• Germany – SEPA direct debit, Sofort
• China – Alipay, WeChat Pay
• Singapore – PayNow
  

Each of these systems offers a familiar, convenient experience for local shoppers. Some are government-backed (like Pix or UPI), while others are private but dominate their market. In many regions, these methods account for more than half of all ecommerce transactions.

For businesses expanding across borders, understanding and integrating these systems is critical to increasing checkout success. They not only reduce friction at the point of sale but also lower processing costs and improve settlement times compared to global card schemes.

If you’re planning to grow in these markets, this guide on card acquiring for international markets explores how to support both local and cross-border strategies effectively.

What are international card schemes?

International card schemes are the globally established payment networks that enable consumers to make purchases with credit, debit, or prepaid cards across borders. The most recognized names—Visa, Mastercard, American Express, and Discover—operate on standardized infrastructure that allows millions of merchants to accept payments from billions of cardholders worldwide.

These networks are built for scale. They offer consistent settlement, global compliance frameworks, robust anti-fraud measures, and integrations with financial institutions in virtually every country. For years, they’ve powered the backbone of cross-border commerce and continue to play a vital role in both online and in-store transactions.

How international card schemes work

Every card transaction relies on a chain of connected players:

• The cardholder initiates the payment
• The merchant routes the transaction through a payment gateway and acquirer
• The request is passed to the card network (e.g., Visa)
• It then reaches the issuing bank for approval
• Once approved, the funds are cleared and eventually settled with the merchant
  

This standardized process enables near-universal acceptance, particularly in countries with strong banking systems. For merchants, these networks offer a way to support customers from multiple regions without managing individual relationships with local banks or wallets.

The strengths of card schemes

• Ubiquity: Accepted by most merchants globally, especially in North America, Western Europe, and parts of Asia
• Security: EMV chip technology, 3D Secure protocols, and robust fraud tools are built into the network
• Customer benefits: Loyalty points, cashback, and travel protections often tied to usage
• Recurring billing: Ideal for subscription-based models, software services, and memberships
• Chargeback and refund systems: Standardized rules give consumers confidence when transacting online

The limitations in today’s market

Despite their global reach, card schemes are increasingly being outpaced by local-first payment methods in key regions. For example:

• In Germany, many consumers prefer SEPA direct debits to credit cards
• In Brazil, Pix transactions outnumber card payments in ecommerce
• In China, card use continues to decline in favor of mobile wallets like Alipay and WeChat Pay
  

Beyond user preference, cards often come with higher processing fees, foreign exchange costs, and lower authorization rates in markets where local acquirers dominate. For merchants, this can mean more failed transactions, longer settlement delays, and added friction at checkout.

Why cards still matter

That said, cards aren’t going away. They remain vital for:

• Cross-border transactions, especially when a local method isn’t supported
• Tourism-heavy businesses, where international visitors default to card payments
• Recurring revenue models, where continuity and built-in card updater services are critical
• Premium loyalty experiences, where co-branded cards and travel perks influence behavior

Ultimately, card schemes are one part of a broader, more fragmented payment landscape. Their strength lies in global consistency, but local relevance is what increasingly drives conversion.

Key differences between local payment methods and card schemes

For merchants operating across multiple markets, choosing between local payment methods and international card schemes isn’t about replacing one with the other—it’s about understanding their strengths and designing a checkout experience that fits customer expectations in each region.

Below is a comparison of key factors that influence performance, cost, and conversion rates:

Feature	Local Payment Methods	International Card Schemes
Speed of settlement	Often instant or same-day (e.g., Pix, UPI)	Typically 1–3 business days
Fees	Generally lower, especially for domestic transactions	Higher, with interchange + acquirer + scheme fees
User trust	High in local markets (bank familiarity, government-backed)	High globally, but varies by region
Fraud protection	Varies by method and region	Built-in fraud detection, chargebacks, and 3D Secure
Chargebacks	Rare or not available in many LPMs	Well-defined and enforced processes
Cross-border support	Usually domestic only	Built for global use
Recurring billing support	Limited; depends on the system	Strong; supports subscriptions and card updater tools
Checkout conversion	Often higher in local markets	Higher in regions where cards are the norm
Integration complexity	Varies widely; some require local acquiring relationships	Often easier with global PSPs or orchestration layers

If you’re selling in Brazil and only accept Visa and Mastercard, you’re likely missing out on customers who prefer Pix—an instant bank transfer method with near-zero fees and widespread adoption. On the other hand, if you’re targeting U.S.-based subscribers, cards remain the most frictionless option for recurring billing.

Understanding these differences is crucial when building or expanding your payment strategy. A one-size-fits-all approach may work in your home market, but localization drives conversion elsewhere.

In the next section, we’ll look at when merchants should prioritize local payment methods and where international cards still make sense.

When to offer local payment methods

If you’re expanding into new regions or noticing high cart abandonment in specific countries, there’s a strong chance that your checkout isn’t aligned with local payment expectations. Local methods aren’t just a bonus—they’re often the deciding factor in whether a customer completes a purchase.

Situations where local methods make a clear impact:

• Entering new markets: LPMs help you integrate with local consumer behavior from day one. In countries like the Netherlands or Germany, cards are not the default.
• Competing with regional players: If your competitors offer iDEAL, SEPA, or BLIK and you don’t, you’re already at a disadvantage.
• Reducing checkout friction: Even loyal customers abandon carts when their preferred method isn’t visible.
• Improving authorization rates: Local methods can bypass international issuer friction that sometimes leads to card declines.
• Controlling costs: Lower transaction fees and faster settlement times can directly impact your margins.
  

More importantly, LPMs often increase trust in the checkout experience. When customers see familiar logos and payment flows, they’re more likely to complete the transaction—especially in mobile-first markets.

To support local methods effectively, many merchants turn to orchestration platforms that allow them to plug into regional PSPs without overhauling their backend. This approach is explored further in our guide to international acquiring and local market readiness.

When card schemes still matter

While local payment methods dominate in many regions, international card schemes still play a critical role for global merchants—especially in high-value, cross-border, and recurring transactions.

Scenarios where card schemes are essential:

• Tourism and international clientele: Businesses that serve global travelers (hotels, airlines, marketplaces) rely on cards as the most universally accepted form of payment.
• Subscription-based models: Visa and Mastercard are still the easiest path to recurring billing with built-in support for automatic renewals and card update services.
• Corporate or B2B payments: Many businesses rely on corporate cards for centralized spend management and expense reporting.
• Premium loyalty programs: Travel cards, cashback rewards, and co-branded partnerships can drive card usage even in markets where local methods are rising.
• Fallback for unsupported regions: In markets where local integrations are complex or unavailable, card schemes provide a reliable alternative.

Rather than viewing cards as outdated, think of them as part of a broader payment mix. When used strategically alongside LPMs, they ensure you’re not excluding key segments of your customer base.

The orchestration advantage

The real challenge isn’t choosing between local methods and cards—it’s managing both. That’s where payment orchestration platforms come in.

With orchestration, you can:

• Integrate multiple PSPs (local and global) through one connection
• Dynamically route transactions based on geography, method, or cost
• Failover between providers to recover failed payments
• Test and add payment methods without long dev cycles
• Support tokenization and portability for long-term flexibility
  

By adding an orchestration layer, merchants gain the freedom to optimize payments country by country, without compromising on control or security.

To see how orchestration helps with cost savings, market entry, and performance, explore the top 10 benefits of using payment orchestration in 2025.

Real-world examples

• A Polish fashion brand saw a 28% lift in mobile conversions after integrating BLIK alongside cards at checkout.
• A global SaaS platform used orchestration to test authorization rates between two card acquirers in Europe—resulting in a 4.5% uplift in approvals.
• A Brazilian marketplace reduced chargeback disputes by encouraging customers to pay via Pix for one-time purchases, while still offering card options for subscriptions.

These examples show that payment flexibility isn’t just about preference—it’s about performance.

Frequently asked questions

Why don’t card schemes work well in some countries?

In many regions, local payment infrastructure is more trusted, cheaper, and widely used than cards—especially where card penetration is low or banking systems are highly localized.

Can I use local methods for cross-border payments?

It depends. Some local methods (like SEPA) support cross-border within specific regions. Others (like Pix or BLIK) are domestic only, but can be paired with orchestration to bridge markets.

How do I know which payment methods to prioritize in each country?

Start with customer data—look at where they’re dropping off at checkout. Combine this with market research and regional benchmarks. Platforms like Gr4vy make it easier to test and iterate quickly.

The divide between local payment methods and international card schemes isn’t a conflict—it’s a call for balance. Merchants that win in 2025 and beyond will be the ones who offer both, seamlessly, in a way that fits the needs of each region and buyer.

Doing that well requires a payment infrastructure that doesn’t force trade-offs. It means having the flexibility to offer Pix in Brazil, cards in the U.S., BLIK in Poland, and SEPA in Europe—all without overloading your engineering team or fragmenting your reporting.

Gr4vy’s orchestration platform helps merchants do exactly that—centralizing payment management while keeping you flexible, scalable, and ready for what’s next.

Contact Gr4vy to build a payment strategy that blends global reach with local relevance—without the complexity.