How to accept payments internationally

Alison Morris | SVP of Strategic Expansion, Worldpay from FIS

October 04, 2021

Merchants know that expanding internationally requires customizing their products, services and marketing. Most merchants have a plan to address local customs, laws and languages, but building out a payments strategy requires additional thought and partnership with a payments expert.

Let’s address some of the most frequently asked questions about accepting international payments online:

How do merchants get started with accepting international payments?

Merchants can accept international payments online from virtually anywhere in the world with the right research, design and partnerships. Accepting payments is fairly easy. The challenges and considerations really start with determining the payment methods you must have in different regions, ensuring your business operations are set up for new markets and understanding fees and regulations in those different regions.

What are a merchants’ first steps to international payment acceptance?

One of your first steps to accept international payments online is learning how consumers pay in your target market. For example, an Australian merchant expanding to Singapore should be thinking about what payment methods look like in that market. NETS, Visa and Mastercard have strong market penetration, they’re known brands where most consumer payments are made by cards. By contrast, if you look at Malaysia, bank transfer is the leading e-commerce payment method, so your payment strategy and checkout experience would look very different.

How should merchants think about local payment methods when expanding?

Beyond the payment methods, merchants will want to determine what currencies to accept for payments and what currencies you’ll want to receive for final settlement. If you’re based in Australia and receive payment in Singapore dollars, you’ll need to determine the currency you’ll want those funds to settle. It’s best to discuss options with your payment processor to understand what is best for your business.

Another approach to expanding sales internationally is to understand if you’re payment provider has local entities where you want do business. Many local payment methods require merchants and the acquirer to use a local entity. Local entities allow a merchant to receive funds in local currencies via local licenses setup by your payment partner, and there’s typically a cost benefit vs conducting cross-border transactions.

What are the implementation considerations for incorporating new payment methods at checkout?

Assessing the most popular regional payment methods is an essential first step to optimize your checkout process and accept international payments online. You don’t need every payment out there but consumers will often abandon transactions at checkout when they don’t see the payment method that they’re accustomed to using. You still want the checkout experience to be fast, simple and have a streamlined look. Optimizing your payment around local payment preferences helps boost conversion rates by reducing cart abandonment. Different payment methods will have different implementation requirements, your payments provider will be best placed to run you through the development work associated with each.

How does your payment mix impact international authorization rates?

Another important consideration when expanding is understanding how authorization rates impact your bottom line. When an issuing bank is asked to authorize a transaction, the chances of approval are typically higher for domestic transactions. Cross-border transactions are usually assessed as carrying greater risk for fraud or other complications. This typically means we see authorization rates – and consequentially profitability – improve when merchants move from cross-border to local processing provided by your payment processor.

Comparing cross-border transactions to processing with a local entity involves a complex mix of considerations like taxation. Merchants can look to their payment partner for advice on how best to navigate these questions and determine the optimized mix for every expansion plan.

How do different payment gateways affect the expansion strategy?

The best payment gateway for international transactions is often a single, robust integration that will meet all your needs. You don’t need multiple gateways. Worldpay’s global coverage covers access to over 190 international markets via a single gateway. That’s attractive to many merchants because a single payment gateway means a single integration that’s scalable and cost-effective. A single gateway offers other benefits including consolidated reporting and back-office management.

There are still valid reasons to pursue multiple gateway strategies such as having intelligent gateway redundancies, but those should be discussed with an experienced payment provider. Most global merchants can comfortably rely on the support of a single global gateway while enjoying the measurable benefits a single integration offers.