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Crossing borders: Best practice for global internet retailers

Global multichannel sales were projected to reach $22trn (£15.4trn) in 2014, according to eMarketer, with the research firm also predicting a 5.5% increase in overall international retail sales to $28.3trn (£19.8trn) by 2018.

There are no borders in internet retailing. Consequently, any retailer with a website has the opportunity (and the associated challenges) to sell to customers all over the world.

A UK-based business could be selling 100 per cent of its core product domestically and then suddenly realise that there is a huge untapped market for their goods in the Middle or Far East. They may find they are receiving thousands of hits online from prospects in Japan, for example – from people eager to buy their product. But how do they market, distribute, price their goods, and service this new customer base? How do they ensure that they have the right language capabilities in place? How do they deal with currencies of which they have previously known little? What about export regulations? There is a raft of new questions to answer.

Understand your market

As a newly-established international business, you need to understand the culture of the country you are selling to and relevant regulatory and compliance issues. And you must make sure your business is available 24/7 in order to ensure customers have continuous access to the services and expertise they need.

Yet, one of the most significant concerns that many retailers have in this situation is payment processing. You must offer local currency, local payment methods, and be conversant with local rules and regulations. Converting currency can be difficult or even impossible with some payment processors, while others charge conversion or maintenance fees.

There are myriad challenges to navigate but also a vast range of opportunities to capitalise upon. To do this effectively, however, retailers need to enlist the help of specialist solution providers that can provide the experience, expertise, consultancy and the secure payment processing services required to ensure the move to international operations is a success.

Here, we take a brief look at some of the key challenges retailers face and how payment processing technology and complementary expertise can be deployed to help resolve them.

Be prepared for becoming a global retailer

There are a whole host of ways in which payment processing providers can help from the outset, through their greater experience of the whole process of providing an international service, leaving the retailer free to focusing on producing marketing and selling its product.

For new start-ups branching out internationally from day one, this might include everything from ensuring that the website provides all the necessary information around terms and conditions, refund policies and customer service, for example, to providing advice on distribution and how to get the goods to the customer in a timely manner.

For example, some markets prefer picking up packages from their local convenience store to home delivery, whilst others prefer payment on delivery to pre-payment. Payment providers can also help deliver advice over the risks start-ups will inevitably face in minimising the dangers of dealing with customers in the online world where the dice are ever more heavily loaded in favour of the consumer, reducing risk of fraud and financial loss.

However, the real value-add that they can provide comes when we start to look in more detail at the payments process itself.

Making international payments work

One of the biggest challenges newly-international businesses face is being able to maximise their payment acceptance. Building on our previous analogy, a small local firm selling garden furniture may be able to accept payments in pound sterling, and perhaps even Euros and dollars, and will probably be able to deal with the standard credit cards like Visa, MasterCard, and American Express. But what happens when a new market opens up in Japan, for example, or in other countries around the world? How do you ensure that your (new) customers’ banks will not simply reject the payment request, because it comes from a different country (or continent)?

Payment processing providers can help here by offering local card solutions (did you know that you are five times more likely to successfully sell in the Netherlands if you offer iDeal as a payment option – over Visa/MasterCard?) or by dealing with the full range of currencies they need to engage with customers in every part of the world, thereby ensuring that the business is not limiting its potential customer base.

The key for retailers is to buy into an approach that drives efficiencies but that also frees them up to focus on their core business. Converting currency can be difficult or even impossible with some payment processors while others charge conversion or other fees, so businesses need to choose an approach that works for them and delivers value.

Any business that accepts credit card payments will also need to ensure that their approach is 100 per cent safe and secure. When selling products on a global market, threats are everywhere, so look for providers that are PCI-DSS Level 1 Compliant, have a securely-encrypted 128 bit Secure Sockets Level (SSL) that will keep customer’s sensitive data secure together with a customisable fraud scrub. It is equally important to select a partner with a proven track record, over many years, of providing safe, secure, and reliable services.

While larger enterprises may prefer to keep it in house, smaller businesses are likely to benefit from the ability to effectively outsource their whole customer service to a third party provider rather than having to be constantly dealing with customer queries about line items on statements, or goods delivery times. It’s also clear that the service will need to be multilingual, so wherever it is coming from, the provider will be able to handle it.

Getting there quickly

Of course, the old truism that time is money is especially relevant in the international marketplace. A great business opportunity is likely to emerge overnight and so every day spent setting up the organisation to accept international sales is likely to equate to thousands of pounds lost in sacrificed business. That’s why, not only is all the above important for businesses to consider before they go global, it’s also crucial that they are able to bring all of this functionality on board with lightning speed.

Doing this, however, is often a tough challenge. All of the elements on the website have to be integrated and coordinated. The integration between each stage, from the product details in the online catalogue, to the shopping page, effectively the domain of the shopping cart, right through to the payments page, has to happen seamlessly. The payment process itself has to be efficient, secure, and accurate.

If a retailer takes each of these steps in turn, acting in isolation, it may expend a huge amount of time and effort for little end result. It’s likely to be a painstaking and error-prone process. Payment processing providers can play a key role here, with the best able to cut the implementation time down significantly – reducing the critical procedure of handling all of the necessary integration from website to shopping cart through to the payment processes themselves from weeks or months to a matter of hours. And once again all of this is likely to be crucial in delivering the versatility and agility organisations really need to take advantage of the exciting new opportunities available to them as they roll out their international businesses.

In the end, the retailer needs to be able to focus on what they do well, providing exceptional goods or services, and leave the headaches of managing payment in an ever-changing world to a trusted professional partner – who is dedicated to enabling the retailer to grow and flourish.

Steve Wilson, Managing Director, Allied Wallet Europe