International expansion is a key strategic priority for many growing businesses. The prospect of pursuing new customers and entering new geographies is often a no-brainer for companies looking for new opportunities and revenue streams.
But this inevitably comes with certain challenges, especially when it comes to payments infrastructure. When expanding into new markets, businesses can’t afford to sacrifice customer experience – and payment processing is no exception. It’s essential to allow consumers to pay quickly, smoothly, and via the method of their choice. And there’s often more variation in local preferences and behaviours than you might think.
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Accounting for this and creating a truly global payments infrastructure can be a highly complicated process with many moving parts. As technology becomes more sophisticated and purchase methods multiply, it’s more important than ever to get it right.
Multinational payment processing
A global business can’t adopt a one-size-fits-all approach to payments infrastructure. It simply doesn’t work; there’s too much variation between countries, legal systems, economic structures and speed of adoption, etc. For the best customer experience, payments infrastructure must be simple, specific and localised.
Bringing your business to Europe, for example, requires an understanding of each relevant nation’s payment preferences. Where card payments are ubiquitous in many countries, in Ireland they comprise 87.2% of all transactions – they are comparatively unpopular in others. In Germany they make up only 20% of all online transactions. Indeed, it’s only one method among many here: a combination of electronic direct debit (amounting to 25% of all payments), bank wire transfers, and ‘smart invoicing’ are used as well. An overall ‘Europe’ strategy won’t cut it.
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An ‘EMEA’ strategy won’t work either. If you’re looking to operate in the UAE you need to understand it. For one thing, it has the highest mobile spend per purchase of any nation on the planet; for another, certain regulations mean that something as seemingly trivial as the address verification process for debit card holders, if misunderstood, can result in a high number of declined transactions. You can’t use the same processes in Ireland and Dubai without running into problems that damage customer experience – and potentially, your bottom line.
So if you’re operating in the UAE, your payments infrastructure must be built to handle a large volume of high value smartphone transactions, and it must account for various regulatory stipulations. If you operate in Indonesia, it must be set up to process more bank transfers. In China, it should accommodate cash and card payments made via Alibaba’s Alipay e-wallet. These are important distinctions. To build a truly global company, it’s crucial to adjust for global payment cultures.
Payments, providers and priorities
It’s easy to think of payments as a mere function: an operational and logistical concern that has little influence on how customers think and feel about your business. But while customers have become accustomed to average service, they certainly don’t like it; this is one area where generalisations do apply across borders. Your target audience will appreciate a smooth, straightforward experience, and a frictionless payments infrastructure contributes to that.
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Naturally, it’s not the whole story, and it can’t command all of your attention. It’s hard to focus on payments when you also have to focus on promoting your brand, selling your product or service, and hiring the best people, amongst seemingly innumerable other concerns.
Accordingly, collaboration is important. Chances are you don’t have time to learn about the intricacies of international address verification laws – so pick a partner that already understands. When you work with a scrupulous, competent payments provider that charges fairly, knows the ins and outs of the international markets that interest you, and can create a solution that increases revenue and protects customer experience – then international growth becomes a simpler prospect. In any case, it’s good future-proofing.
Scaling up your payments infrastructure is a critical part of your strategy. If you’re going to branch into new markets, give it the care and attention it requires. If you do, you’ll maintain a solid, cohesive customer experience – no matter where you operate.
Sourced by Peter Caparso, President North America, Checkout.com