With more global browsers becoming digital buyers, cross-border eCommerce is here to stay. The international presence of eCommerce is rapidly growing, By 2022 cross-border eCommerce will span across at least 29 countries over the regions of North America, Latin America, Europe, Asia Pacific, Africa and the Middle East.
Today’s e-commerce world has a global reach. Payments, remittances, and purchases all often require money exchanged across borders. Cross border payments defined as funds paid to or taken in from different countries, so the location where the merchant is registered is different from the country where the customer’s card was issued.
There many different scenarios to think about when a merchant needs to deal with international payments because each country has its own rules. The demand for cross-border payments is so high that steps are being made to improve cross-border payments as a whole.
What are cross-border payments?
Cross-border payments are transactions where the payee and the transaction recipient are based in separate countries.The transactions can be between individuals, companies or banking institutions who are looking to transfer funds across territories. For merchants who are operating internationally, it is crucial that they are able to accept payments across all countries that they are targeting.
Receiving international payments
Merchants should work with a Payment Service Provider (PSP) that offers a secure, global payment gateway. A payment gateway acts as the switch between the various players in the payment network, allowing funds to be securely passed between the customer, merchant and the issuing and acquiring banks. It validates the payment and encrypts the sensitive financial data that is being transferred between the relevant parties.
It’s important that the gateway you chose to integrate facilitates a wide range of payment and settlement currencies to maximise your chance of reaching new markets. Using local currencies for card transactions has the potential to result in better acceptance rates. When consumers are shopping online they want to see the final price that they will be charged in their own currency customers.
There are several ways that companies who are handling cross-border commerce can provide a better user experience for their consumers. We will tell you about some of them:
- Offer popular regional payment options: it is definitely worth researching which payment methods are prevalen in every country.
- Work with a local partner: a local partner will be knowledgeable about the culture, social structure, business customs, consumer preferences, logistics, infrastructure and legislation.
- Adopt the local language: multilingual customer service enhances loyalty. Customers respond well to being addressed in their own language and will value your offering more when you put in the effort to do so.