Retailers know better than anyone that the past few years have seen exponential growth in international sales and payments. In 2020 alone, the UK saw a 57% year-on-year increase in cross-border ecommerce sales.Now, retailers’ likelihood of success depends on their ability to give their global customers a localized shopping experience.
Consumers now expect easy and quick access to the global market and the development of payments without borders is ever-growing and changing.As retailers continue to refine their processes, three best practices that they can use to help localise the global shopping experience have emerged.
Speak your Customers’ Language
At the most basic level, customers should have the ability to easily read the checkout page. As such, payment processors must be able to detect a URL’s native country and serve payment pages in the customer’s language when completing a transaction.
Then there’s the second, and too often forgotten translation to local currency. Without the ability to see an item’s price in their own currency, customers are left guessing what the total cost they’re spending will be. This uncertainty can lead to lost sales and repeat customers.
To avoid this, it’s imperative for a website’s checkout page to automatically convert the purchase price to the correct local currency. These localisations will go a long way to reassure the customer – helping to make the purchase process smooth and simple. With merchants that sell in local currencies seeing a 12% increase in sales, failure to localise the payment experience is an unnecessary roadblock to profits.
Understand Local Payment Options
Localising global payments extends far beyond language and currency adaption. Retailers must apply this same mindset to localise payment options and the payment processing methods to which customers may not even be privy.
Some global payment processors may be able to support sales through debit and credit cards internationally. However, some transactions are done using other payment methods. Depending on the region, it’s common to have transactions using bank transfers, cash vouchers and online banking methods.
When a customer pays by credit card, the information goes to an acquiring bank before the order is deemed complete. In cross-border payments, this can entail information from a card originating in one region being sent to an acquiring bank that is another. Most payment gateways, despite being global processors, will only partner with a single acquiring bank in their own country. This often sets international transactions up with a higher probability of being flagged as a fraudulent transaction as it’s part of a different routing system.
With local acquiring in place, you can also avoid cross-border fees, which can add up to 1% and reduce a business’s return on investing in cross-border sales. This is front of mind for many retailers at the moment as the time nears for some of the card brands to charge higher rates for transactions between the UK and EU post-Brexit. Smart businesses are already prepared to begin routing their transactions through local banks to avoid those higher fees. Otherwise, those are funds that eat into your profits or you have to pass them on to customers.
On average, international businesses use five different payment gateways to route cross-border transactions to local banks. However, the costs of developing and maintaining those connections along with integrating additional services, such as various payment types, like eWallets, and fraud prevention, can offset the savings of processing payments locally. Choosing a payments provider with connections to local banks and other powerful features like fraud, eWallets and more can save businesses time and money.
Working with a payment partner that understands the landscape globally, without sacrificing local knowledge will only help merchants in the long run as they hope to expand their businesses.
Tax and Compliance
Following the data privacy scandals of recent years, regulations around digital commerce are becoming increasingly complex and strict. The fees for not addressing them correctly can be extremely costly for companies operating across borders. While it may not seem like something to consider immediately, retailers acting in compliance with local data privacy (CCPA), consumer security (PSD2) and tax collection laws, will help customers to feel safer when shopping outside of their own region.
Payment compliance can seem complicated, but no one is exempt from their country’s regulations. Companies have a responsibility to closely monitor all regulations that are impacting payments at all levels and then update the technology infrastructure according to new laws. Getting this right will increase sales and boost customer trust.
Instead of working through regulatory nuances themselves, many retailers find that working with a payment partner that handles fraud and data privacy compliance allows them to focus on growing their business instead.