What every merchant should know about international payments

As your business grows and goes global, understanding international payments becomes a necessity. However, they come not only with the excitement of selling globally but also with a set of unique challenges. Here’s what you need to know to navigate the world of cross-border transactions confidently.

Understanding international payments

International or cross-border payments happen between the buyer and seller in different countries. These transactions often involve multiple currencies, varying banking systems, and various regulations. Here are the key things to keep in mind:

• Currency conversion: The exchange rate between two currencies can impact the cost of a transaction. Merchants must decide whether to price in local or foreign currencies and monitor fluctuations.
• Payment methods: International payments can be processed via credit cards, digital wallets, wire transfers, and various online payment platforms. The best option often depends on the region and customer preferences.
• Delays: Cross-border payments generally take longer to process than domestic ones. Depending on the payment method and the countries involved, it could take anywhere from a few hours to several business days. Factors like time zones, intermediary banks, and different payment systems can affect processing times.?

Fee structure and costs

Let’s face it: international payments aren’t always cheap. They often come with extra fees compared to local transactions. These include:

• Currency conversion fees: Payment processors usually charge a fee when you convert payments from one currency to another. The amount can vary, so keep an eye out for hidden costs.
• Cross-border transaction fees: Banks and payment providers typically charge additional fees for processing payments between different countries.
• Hidden costs: Watch out for surprise charges from intermediary banks involved in international transactions.

Evaluate the full cost of processing international payments to ensure you get a fair deal with minimal downsides.

Compliance and regulations

Different countries have their own rules when it comes to payments. Failing to follow these regulations can lead to headaches in the future. Here are a few things to consider:

• AML & KYC laws: Anti-Money Laundering (AML) and Know Your Customer (KYC) laws help prevent fraud and ensure your customers are legitimate. Your payment provider should adhere to these laws to keep both you and your customers safe.
• Data protection: Countries like the EU enforce strict data privacy regulations, such as the General Data Protection Regulation (GDPR). To avoid penalties, make sure your payment provider is up to speed on these regulations.
• Taxes: Selling internationally often means dealing with VAT or other local taxes. Keep track of these rules to stay on top of your tax obligations.

Learn about payment regulations in Europe and Asia.?

Local payment methods?

When expanding internationally, offering payment methods that are popular in the target market is essential. Some regions have their own preferred ways to pay:

• Asia: In China, mobile payments via Alipay and WeChat Pay are huge. Offering these options can help you tap into the Asian market.
• Europe: European customers often prefer digital wallets like PayDo or Pay by Bank payments, allowing them to pay directly from their banking apps.
• Latin America: Cash-based methods like Boleto Bancário in Brazil or OXXO in Mexico are standard payment options.

By offering local payment methods familiar to your customers, you’ll make their purchasing experience smoother and more reliable.

Security and fraud prevention?

Security should always be a top priority when processing international payments. Fraud risks can be higher across borders, so it’s crucial to take extra precautions:

• PCI-DSS compliance: Ensure your payment provider follows the Payment Card Industry Data Security Standard (PCI-DSS) to protect sensitive card information.
• Fraud prevention tools: To protect transactions, look for fraud detection tools like 3D Secure, address verification systems (AVS), and tokenization.
• Multi-factor authentication (MFA): Adding an extra layer of security with MFA can help safeguard your customers' payments – especially for high-value transactions.

Choosing the right payment gateway

Your payment gateway bridges you and your international customers, so picking the right one is key. Consider these factors:

• Global reach: Make sure your payment provider can handle transactions in multiple currencies and regions.
• Seamless integration: The payment gateway should easily integrate with your website or e-commerce platform without causing major headaches.
• Customer support: Cross-border payments can get complicated, so having reliable customer support is essential, especially when dealing with different time zones.

Final thoughts

Expanding your business internationally is an exciting opportunity, and Payop makes managing cross-border payments more manageable. With over 500 global payment options, 100 currencies, competitive fees, and secure, easy integration options, Payop helps you navigate the complexities of international transactions. Focus on growing your business while we handle the payments.