Supposedly, this new functionality enables Nigerian shoppers to pay for goods and services in their local currency, while merchants, such as US-based retailer Amazon, will receive settlements in USD.
Previously, businesses were required to establish a legal entity in each country where they wished to accept payments, a requirement that often limited their global reach and contributed to high rates of cart abandonment. Stripe’s latest rollout removes this barrier, allowing merchants to sell directly to Nigerian customers without needing to set up a local entity. However, this feature is currently available only to US retailers as part of its beta launch, with all settlements being made in USD.
Stripe has identified online payments as a critical factor in optimising conversion rates. The company has recognised that the option to pay in local currency is essential for reducing cart abandonment and increasing revenue. Data from the Baymard Institute, which has monitored global cart abandonment rates for over a decade, indicates that approximately 70% of online shopping carts are abandoned at checkout, often due to discrepancies between the merchant’s pricing and the shopper’s local currency.
By offering prices in the local currency, Stripe aims to improve conversion rates for its merchants, facilitating better sales and supporting their global expansion.
Stripe's introduction of a feature allowing payments in naira significantly strengthens the ability of US merchants to tap into the Nigerian market, one of Africa's largest and fastest-growing economies. By accepting naira payments, these businesses can engage directly with Nigerian consumers without the logistical and regulatory challenges of establishing local entities. This not only opens the door to a substantial new customer base but also simplifies the purchasing process, making it easier for Nigerian shoppers to transact with US retailers.
The ability to transact in local currency can lead to considerable revenue growth for US merchants. With Nigerian consumers no longer facing currency conversion issues or uncertainty regarding fluctuating exchange rates, the likelihood of completing a purchase increases. This reduction in friction at the checkout stage is crucial, as it addresses one of the primary reasons for cart abandonment in online shopping. As a result, merchants can expect higher conversion rates and increased sales, directly contributing to their bottom line.
This new feature aligns with Stripe's broader mission of expanding revenue opportunities for its clients by facilitating simple international transactions. By eliminating currency and regulatory barriers, Stripe helps US merchants to operate more effectively on a global scale. This approach not only improves the shopping experience for international customers but also helps businesses diversify their revenue streams and reduce reliance on domestic markets. In an increasingly interconnected world, such capabilities are essential for long-term growth and competitiveness.
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