Global Merchants See Sales Boost With Modern Cross-Border Payments Infrastructure

The pandemic era ushered in many favorable trends for global eCommerce businesses, but times have changed, says Pranav Sood, EMEA executive GM at payments firm Airwallex, as international merchants grapple with outdated payments infrastructure and solutions that no longer meets their needs.

This situation has led to increased cost pressures on businesses, with transactional costs, such as foreign exchange (FX) conversion fees, interchange and cross-border transaction fees on one hand, and operational costs, encompassing expenses related to reconciliation, compliance and regulatory requirements on the other.

As Sood noted in a recent interview with PYMNTS, “The focus at that time was very much on top-line and how to drive growth and expansion. Fast forward to 2023 and we’re in a different environment where cost considerations are now top of the agenda.”

When like-for-like settlements are absent, forcing merchants to collect funds in a particular currency and convert it into a different settlement currency within their payment processing infrastructure, it further complicates the process, he said: “You end up losing somewhere between 2% and 4% often per transaction in FX conversion fees.”

Another challenge international merchants face is around online conversion rates, noted Sood, who pointed to the lack of preferred payment methods or currencies, a complex and confusing checkout process and a lack of trust in the checkout journey as some of the main factors driving cart abandonment today.

Then there’s the issue of unexpected fees popping up at the end of the checkout process which Sood said can lead to even higher rates of cart abandonment. “It can really throw a buyer off if they thought they were going to pay one thing and then they get to checkout and the amount that they’re being charged is much higher.”

Overall, this is where an expert payment service provider (PSP) can make a significant difference, Sood argued — one that not only has the global reach and coverage in terms of currencies and payment methods and can offer a personalized checkout process but has the right certifications and standardization “so that customers can feel like they’re transacting with someone that they can trust.”

Today’s Merchant Is Educated and Engaged

In today’s interconnected and borderless world, every second of uptime is critical for an eCommerce business. “You can’t afford a situation where your product is hamstrung by one of your infrastructure providers or your only infrastructure provider,” Sood said.

Against this backdrop, having a fallback plan is crucial, he pointed out, enabling merchants to leverage the strengths of different payment providers to optimize sales, distribute volumes efficiently, and ensure a seamless payment experience for customers.

“You’ve got to find a payment provider that meets you where you are and [gives] you the level of flexibility that you need from a technical perspective so that you can do things like customizing your checkout to reflect the amount of development resource and sophistication that you have,” he said.

It’s also making sure you’re working with providers that offer an end-to-end payment processing stack, he added. This goes beyond simply accepting payments and storing and converting funds to sending and spending money globally, all with the minimum amount of development and the maximum amount of customer support and engagement.

Ultimately, Sood said, businesses are waking up to the reality that the deals they currently have with their established payment processes need reviewing. At Airwallex, for example, he pointed to the increasing number of clients looking to switch payment processors in exchange for more favorable deals as they navigate an environment where tackling increasing cost pressures and optimizing for the local payment methods and currencies are becoming more and more significant.

“The trend that I’m seeing is an increasingly educated and increasingly engaged group of [online] merchants who are not just looking for the best deal in terms of price, but the right deal that optimizes for coverage, conversion, technical support and ease of integration,” Sood said, “and being really thoughtful in making sure they choose the right one.”

The post Global Merchants See Sales Boost With Modern Cross-Border Payments Infrastructure first appeared on PYMNTS.com.