eCommerce: Planning for Expansion

Towards the end of 2013, CyberSource conducted an independent survey to explore this year’s growth ambitions of senior executives from a range of organisations in France, Spain and the UK. We found that 86% of the executives plan to increase their focus on expanding eCommerce into new markets. Interestingly, no other plans, such as investing in mCommerce, harnessing big data, optimising business operations or improving the user experience, equalled expansion as an important growth policy.

Formulate success

Choosing the right markets is a key challenge of any expansion initiative and there's no easy formula for getting it right. For any targeted country, you must understand the maturity of the eCommerce market for your goods and services, taking into account: its delivery infrastructure; the competitive landscape; the political, legal and economic factors that affect the country's risk profile; and the likely impact of local norms on everything from marketing and sales to fulfilment and customer service.

Manage payments

There are many aspects to consider during expansion and it can be easy to overlook items such as payment management. But doing so can be costly; even those with experience in eCommerce expansion could find their plans derailed by an unforeseen payment-related issue in the next country they target.

While I'd never argue that adapting to the unique payment landscape of a new country is the only, or most important, success factor for eCommerce expansion, it is critical - with a direct influence on:

  • Customer reach and sales conversion
  • Time to revenue
  • Cost of expansion

Let's look at each in turn.


Imagine you've done everything right in targeting a new country and everything is in place; customers are flocking to your localised site and filling their carts.

However, at the checkout page a customer finds you only take credit cards and, although they have one, the card spending limit is low and the interest rate is high. In this instance they would usually buy online through interest-free instalments but this a payment option you don't offer.

Now the customer changes their mind. Or perhaps they don't change their mind, but transactions are routinely rejected by your fraud screening process because the card they're using has been used by someone else.

These are real examples: payment through instalments is common in Brazil and Mexico, while in India it's common for families to share a card.

Most of the businesses we talk to are aware that different countries have different payment preferences. But they’re often unaware that (as the sharing of cards in India illustrates) differences usually go deeper than preferred payment methods.

From a sales conversion perspective, behaviour that affects fraud management is at least as important as differences in payment method preferences and usually less obvious. Minimising chargebacks without blocking genuine orders in a new market calls for a fraud management strategy that combines specific local knowledge and fraud management expertise. Every business needs a plan for setting up an informed fraud management strategy from day one in any new market, or else run the risk of high fraud costs or lost sales at a time when it can least afford either.


Time to revenue in a new market is directly linked to how quickly you can establish payment processing capability there. Cross-border transactions attract higher fees, and sometimes higher rejection rates from issuing banks, so you might prefer to establish a relationship with a local acquirer or payment processor.

It can take time to establish local processing connectivity unless you have the ability to take advantage of an existing connection offered by a payment service provider. Companies have given us examples of having to wait six months or more; I know of one company that had to delay a launch into a new country because it didn't appreciate what was involved in organising payment processing.

Unanticipated delays can also be caused by being unaware of, or not planning accordingly, for local mandates. They aren’t always as obvious as data protection laws, tax calculation requirements, or direct debit regulations. For example, in some Asian countries merchants can’t host their own checkout forms - they must be hosted by a payment provider or the bank. In Brazil, some of the top banks automatically decline internationally originated transactions presented in the Brazilian real (through Dynamic Currency Conversion, for example).

One thing you just do not need when establishing yourself in a new market is being faced with last-minute changes to your checkout architecture or processes for lack of awareness of such requirements. Again, local knowledge is the key to avoiding these pitfalls.


Because there's a lot to get right and the details differ from one country to the next, the complexity and cost of payment management tends to increase as you expand into more countries.

This has knock-on effects; especially for IT with its central role in the eCommerce payment process. Checkout pages must cater to multiple languages and currencies, as well as multiple device formats and operating systems.

Effective fraud management calls for specialised application support. Every form of payment requires connectivity to the relevant acquiring and payment processing organisations, and must be integrated with financial, logistical, customer service and other applications. Clearly IT costs can spiral as the number of countries and methods of payment increase.

Exponential growth of complexity and cost can catch even experienced expanders unaware; especially if they've found country-specific workarounds to challenges instead of solutions that are adaptable and scalable as more countries are added. It's worth thinking about your medium- and long-term objectives even as you start expanding, or you risk finding that growing costs affect your ability to turn a profit in attractive new markets down the line. Consider starting with a payment management platform designed to cater to the realities of different countries, for scalability, and to avoid much of the IT complexity caused by expansion.


My intention here has been to forewarn and forearm businesses, so their eCommerce expansion doesn’t falter for lack of appreciation of the strategic importance of payment management. While I've drawn attention to the many ways in which things could go wrong, it's equally important to realise that every issue I have raised can be successfully managed to achieve even the most ambitious expansion objectives.

Payment management knowledge and tools exist to help you decrease time to market, improve customer reach and conversion, as well as reduce cost and risk. The crucial first step is to be aware of just how specialised an area it is, and of the many ways in which domestic competence is not a predictor of competence elsewhere, so you can seek the appropriate help.


Neil Caldwell is Regional Sales Director (EU) at CyberSource


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