Global commerce is heating up. There’s more competition for merchants than ever before, but also more opportunity – if you can handle its challenges.
In this blog, Igal Rotem, CEO of Credorax, discusses how merchants in the global payments market can overcome the three main ecommerce business challenges of cross-border payments and increased transaction rates.
Facing the trials and tribulations
COVID-19 has exacerbated the global payments challenge. Now more than ever, there is an urgent need for universal, real-time payments across global markets – especially when it comes to cross-border transactions.
International consumers purchasing across borders increasingly expect transactions online to happen in real time, but not all merchants have in place the payments system to provide this.
So, as you make responding to customers’ eCommerce demands a priority, so too must you look out for, and, solve the following three main payment ecommerce business challenges, to succeed:
Challenge #1: Payment acceptance
First and foremost, you will want to make sure the payment cycle is completed successfully and with a valid payment method. This might seem obvious, but the fact is,
some merchant approval rates
are as low as 50%!
This is because issuers and acquirers often struggle to identify when cross-border transactions are genuine, triggering all the warning signs for no good reason.
But think of that huge effort you’ve put into marketing. You’ve used a variety of means and valuable budget to bring traffic to your website, and put in an enormous amount of energy to ensure the traffic is of good quality. Yet, when the customer eventually gets to the checkout, instead of a successful transaction, they see a ‘your credit card company has not authorised the transaction’ notification.
This scenario is disastrous. Not only do you lose that transaction, but you will lose the lifetime value of the potential customer – and their connections to even more potential customers as well.
Whether it’s thousands of failed transactions or just one,
completing the payment is crucial to your business’ success.
Challenge #2: Foreign exchange
Let’s imagine you are a German merchant whose sales have boomed beyond Europe over the past few months. Now, customers across the world are searching for your products, so you’ve localised your services to allow them to buy in their native currency.
Suddenly, you have customers paying in Taiwanese dollars, Japanese yen and Russian roubles – but you’re based in Europe; your operational expenses are mostly Euro linked. Therefore, you want to be paid in Euros, without losing the FX conversion and associated expenses. What to do?
This is a big challenge. Especially as many companies operate at very thin and compressed margins. If you work at around 5% EBITDA margins, for instance, the fact is that you may sometimes lose that 5% on FX alone, and without even realising that you’re losing it!
The key is to work with a payments provider that will let you settle in your local currency, and one that keeps conversion rates low.
This will enable you to offer multiple currencies for cross-border transactions, without getting stung by unfair FX charges or administrative complications.
Challenge #3: Technology
Many eCommerce providers often run promotions, campaigns and activities to broaden their exposure. When these campaigns go live, the number of transactions per second can suddenly skyrocket – because everybody loves a good deal!
So, you need to make sure that your payments provider can withstand rapid transaction volume increases, and scale to process them on the fly.
your system could crash in the middle of a campaign, costing you both advertising money and future customers.
Ready, steady, grow
“With the majority of commerce now taking place online, I cannot underestimate how important it is that you work with a provider who can scale to suit your needs so that you are prepared for any situation.” “It’s the only way to minimise the risk of payments failing, protect your EBITDA margins, and ensure you continue functioning when operating globally.”
If you’d like to hear how Credorax can help you overcome these ecommerce business challenges, get in touch at: firstname.lastname@example.org.