Payments processing is one of the most important functions in ecommerce. The wrong solution can cost money in fees, it can increase risk and it can also diminish your buyers purchasing experience.
When selling internationally, you need to partner with a payment provider who can support you in all of the markets you sell into, in a cost effective way.
Not only that, you have to consider the technical and logistical challenges that come with setting up a new payment gateway. You also have to take into consideration your customer’s convenience, as well as the gateway’s security.
We’ve picked out 5 things that you need to consider when selecting payment providers for your ecommerce business.
1. Choose a service that works best for your markets
In order to sell your products and services online, a payment gateway provider is required across all of your webstores. This allows customers to buy your products/services and enables you to receive payments without issue, as well as securely. As it’s a fundamental part of ecommerce, choosing the right service provider is imperative and merchants need to consider which service offers them the required adaptability, as well as security.
When selling into international markets, your buyers are expecting a localized experience. That means product information & checkout pages in their language, currencies, as well as tax and duty charges etc. Buyers also require the option to be able to pay with their own payment methods.
This leads merchants being required to accept not just all credit & debit cards, but as many local payment methods as possible to facilitate a transaction. This can include things like online banking options such as iDEAL from the Netherlands, or digital wallets like Alipay in Asia.
When expanding internationally into further markets, it’s important to integrate ecommerce solutions that provide a seamless process that enables entering new markets without any limitations. Merchants need to find a payment provider who offers a range of payment options that can be used in as many markets as possible, rather than just the standard large economies.
What to look out for:
- Does the service support international payments?
- Can it adapt to taking on new markets & currencies?
2. Do they support Multi-Currency Transactions?
When it comes to payment processing across borders, there are certainly some complexities. Merchants need to be able to process multiple currencies, as well as offering international payment options, while factoring in currency exchange and its fluctuations.
This may mean for some merchants; they will require various bank accounts, complying to regulations or in some cases, multiple business entities. If your business is planning on selling its products across numerous markets, it’s imperative to choose a payment service provider with the infrastructure to support international transactions which will make your payment processing more cost effective and those markets more profitable.
What to look out for:
- Does it support your business model if you sell into more than 1 international country?
- How many currencies do they support
- Can they help to reduce cross border risk
3. Easy Integration Process into the checkout
The process of integrating an online payment gateway into your checkout can be complex and difficult to manage. It’s important to find one that fits your needs whilst also reducing the complexity to integrate. Most of the larger, more popular ecommerce platforms like Shopify, Magento, Bigcommerce etc tend to have an easier integration process.
The customer's user experience is also a consideration. Selecting a payment gateway system that has a slow payment process can create an unwanted frustrating experience for your buyer. It’s ideal to choose a solution that also allows a wider choice of payment options. A payment provider that sends your customers to the 3rd party site to add their credit card information is an ideal solution. And once the transaction is completed, the provider sends your customer back to your online shop.
If the integration isn’t achieved as well as it should, it can lead to your customers being frustrated and abandoning their carts. As a critical step in the sales funnel, it should be a flawless experience.
What to look out for:
- Compatibility with your ecommerce platform
- Is it an international solution, or one solely aimed at a specific market?
4. Are the transaction fees too high?
Pricing for payment gateways is commonly based on the type of transactions a business conducts (online or in-person), and even business sales, revenue consistency, transaction frequency, and the markets served. It’s important to understand how the fee structure of the payment provider coincides with your business, and what the cost of business will be. It’s not uncommon for a provider to advertise relatively low fees, but there can be different layers which quickly becomes expensive.
With payment transactions come payment fees; however, the types of fees vary depending on the provider you use. The three typical types of fees you will come across are set up fees, transaction fees and monthly fees, some providers will charge you for a membership fee, others will only charge you based on your monthly usage.
When looking into service providers, it is essential to understand the breakdown of the fees provided, and determine if this is too costly for your business. Some larger, more recognisable payment providers also can be more expensive in their overall price, but spread across a more complex breakdown of small fees, which can be confusing to determine the overall cost, and actually end up being more expensive than other providers.
Payment fees are a part of commerce, but they do add up, spending the extra time researching and finding the right provider for you, will save you money in the long run.
What to look out for
- Registration fee
- Once-off fee to set up the gateway
- Monthly connection fee
- Transaction fees (including for declined transactions) – these could be fixed or variable
- Settlement fee to transfer money
- Fees for refunds or charge-backs
- Fee to reserve payment (“hold” funds) until stock levels are confirmed
5. Security for your customers
Security can be one of the biggest challenges in ecommerce. As technology innovates, as do cyber threats and digital fraud. Security breaches can negatively impact merchants financially as well as negatively impacting their reputation and is imperative for building buyer trust.
When buyers process a transaction, they fully expect their data to be safe, as well as the transfer of their money to the store to be secure and efficient. Being able to ensure that your payment processor is active in securing data and evolving their security measures can provide your customers satisfaction and security, driving trust for your brand in every market.
What to look out for
- Are they Payment Card Industry Data Security Standard (PCI DSS) compliant and at what level? This ensures payment information is stored independently and protected by third parties.
- Do they use 3D Secure? This requires a single-use code from the customer to authorise the transaction.
- What fraud prevention and detection measures do they offer?
What we recommend
Choose a payment partner that specialises in international ecommerce, that can support over 25 currencies across global markets. This will enable you to be able to sell into most international markets. It’s also important to ensure they provide a level of protection from high currency fluctuation, ultimately keeping cross-border costs as low as possible.
Whilst choosing your payment provider, make sure their solution offers unbeatable security features and also look for a PCI-DSS certificate payment gateway that offers anti-fraud protection. This will go a long way for you and your customers.
Want to learn more?
Why not join our Cross-border Academy?
Glopal’s Cross-border Academy is an eight-part series designed to help retailers understand the challenges and opportunities of global ecommerce, whilst offering insight into how you can improve each stage of the process to ultimately drive higher global sales.
What to expect from this academy:
- Over the course of 8 weeks you will be sent an in-depth exploration into a different aspect of cross-border trade each week
- We share best practices from our 14 years in business helping more than 33,000 merchants realize their international expansion goals.
Sign up for free today!