Transactions without borders: Building a global payments infrastructure
Finance

Transactions without borders: Building a global payments infrastructure

This is a contributed piece by Peter Caparso, President North America, Checkout.com

 

International growth is a strategic ambition for many businesses. When seeking new opportunities and new revenue streams, it makes sense to look further afield than your home market. And even if you’re not one of the initial movers to the new market, there are often clear advantages to global expansion.

Global expansion isn’t easy, and when your business grows it’s crucial to make sure that your infrastructure grows with it - and payments is particularly important. Merchants who are expanding internationally must be able to facilitate cross-border purchases, offer global transaction options, and supply a truly localized experience that takes into account regional customer preferences and behaviors.

Creating an international payments infrastructure is a demanding task. But if you’re moving into new markets, it’s one that’s worth taking seriously.

 

Worldly success

Payment culture differences can be quite profound. And whether or not you understand them can determine the success of your international expansion.

The United Arab Emirates, for example, is a lucrative market for businesses in many industries, especially as e-commerce in the region is booming. But to operate effectively in this country, it’s essential to understand its idiosyncrasies. Certain regulations mean that the address verification process works differently than it does in other parts of the world, and banks also impose restrictions on newly-issued credit and debit cards. If your payment services provider (PSP) deploys the same methods in both Dubai and France, for example, the result will be a number of declined transactions. That’s not good for the customer, and it’s certainly not good for you.

Another important factor is preferred payment methods. For example, the UAE has the highest mobile spend per purchase of any nation on Earth. If your payments infrastructure isn’t set up to quickly and efficiently process smartphone transactions here, then you’re more likely to damage the user experience and make return visits less likely. Alongside this, you run the risk of failing to capitalize on an important market trend and are more likely to miss out on huge commercial opportunities.

And though for many Western businesses, Europe may represent more familiar territory, it’s easy to forget that ‘Europe’ is comprised of a number of distinct countries – each with distinct payment habits. In France, 50% of transactions are completed via credit card; in Ireland, this is 87.2%. Italians use pre-paid cards for 15% of all purchases, so regular recurring debits for subscription services are dependent on whether or not the customer has remembered to top up.  

Regardless of which markets you’re targeting, your infrastructure must account for the differences and be built to ensure that your customers receive a seamless, frictionless, high-quality experience. In China, Alibaba’s Alipay eWallet allows users to make credit and cash payments. In Indonesia, the most popular payment methods are bank transfers and cash on receipt. These differences aren’t trivial: they matter to customers.

 

International payments need international providers

Of course, merchants can only spend so much time researching the payments culture in their target nations. International growth is a battle fought on multiple fronts, and it’s necessary to coordinate marketing, sales, HR, and recruitment efforts – amongst many other things.

It’s not reasonable to expect a merchant to understand the nuances of tax law as it relates to payments: there are too many layers to peel back, and there is too much knowledge to accumulate. Infrastructure can easily fall by the wayside.

So it’s essential to find international partners who have your best interests at heart. They will help ensure that, when the time comes, your payments infrastructure is ready for international growth – and that revenues won’t be put at risk during a crucial transitional phase.

Payments aren’t just a function: they’re the lifeblood of global businesses. As your company scales, infrastructure must scale with it.

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