Transacting in Europe? Avoid these common mistakes when choosing cross-border and international payment processors.
If you’re an ecommerce business looking to trade throughout Europe, there’s more to accepting international payments than simply finding the right payment processor. You need to not only be able to accept payments from customers in all the countries you’re aiming to do business with, but also to ensure that if payments fail your business isn’t at risk of losing both money and customers.
Making sure you choose the right cross-border and international payment processor for Europe is crucial. Getting it right will help you to avoid countless regulatory and logistical headaches, as well as costly cross-border and FX (foreign exchange) fees, and help to grow and scale your business internationally.
Pitfalls to avoid with cross-border payment processors
Don’t make the mistake of choosing the wrong partner or one with limited or costly functionality. There are a number of factors that can make or break global transacting success, so when choosing between cross-border and international payment processors, you need to look out for these potential challenges:
Costly currency conversion rates
Multi-currency support is something merchants need in a payment processor. Letting your global customers view prices and make payments in their local currencies will attract more sales, but it does come at a cost. You have to factor in the cost of currency conversion on top of other costs involved in accepting payments, which can vary between processors.
Making sure the international payment gateway you partner with can offer competitive conversion rates means you won’t be faced with higher than unexpected charges when it comes to reconciling payments!
Not understanding how fees and rates compare
International payments naturally come at a higher cost than domestic payments, so you must understand the fee and rate structures to reduce costs and drive business growth. Any payment you receive (or make to any suppliers or contractors you have in Europe) will likely be impacted by factors like FX fees, bank fees, transaction fees, or fees for paying by cross-border card in Europe.
When choosing your payment provider, it’s critical to understand exactly how your payment processors rates and fees compare relative to other merchants transacting in the same countries and with similar monthly transaction volumes. Looking for a cross-border and international payment processor with competitive rates and fees can help cut your costs, making the whole process faster, smoother, and more profitable for you.
Looking for an international payment processor that does it all?
Rapyd Collect offers Built-in Fraud Monitoring and Cards plus local and alternative payment methods
Using a processor that doesn’t offer customized fraud protection
Protecting your business from fraud is crucial, especially for ecommerce businesses. Online payments fraud attempts are on the rise, and, if successful, can be extremely damaging, even catastrophic, for businesses trying to trade internationally. Partnering with a payment processor that offers expert risk reduction in the form of things like fraud detection, KYC (Know Your Customer), and built-in AML (Anti-Money Laundering) monitoring, can make all the difference.
You also need to have control over fraud filters to ensure the lowest declines possible, thus making sure that legitimate transactions are able to be processed. Think about how your customers would feel if they were trying to make a genuine payment and it was flagged as fraud—it’s highly likely they’d shop elsewhere!
Not well optimized for mobile and POS payments
If you’re looking to work with a payment processor, it’s important you understand how well they manage payments from different processing methods, like mobile and point-of-sale (POS).
Not only should they have the capability to accept different types of cross-border payment methods, but they should also have the experience and know-how to provide customers with a great payment experience no matter how or where they’re paying.
Limited payment methods
Using a payment processor that accepts as many international payment methods as possible is essential for any merchant looking to trade globally. And in Europe this is particularly important, as there are such varied payment preferences across the different countries.
For example, some payment processors only accept credit card payments, but in many European countries, bank transfers or ewallets are more popular payment methods. By limiting the payment methods you’re able to offer, you’ll be limiting sales.
Non-compliance with international payment laws and regulations
If you’re trading internationally, you’re responsible for understanding and complying with whatever rules and regulations are related to each jurisdiction. Choosing the correct cross-border and international payment processor can help you do just that.
Make sure that your chosen partner ensures compliance with the international payment laws and regulations that are in place in Europe, for example, having Strong Customer Authentication (SCA) and being PSD2 compliant for cross-border payments made within the EU.
Finding the Right International Payment Processor
Knowing what separates the good cross-border and international payment processors in Europe from the not so good will make a huge difference to your global trading success. We’ve covered some of the most common mistakes merchants make when choosing, so you know what to avoid. Merchants and businesses looking to trade in Europe should be looking for a payment processor that does the following:
- Offers transparency in the fees and charges they apply to payment transactions.
- Accepts a wide range of payment methods, including local/alternative payment methods.
- Offers strong fraud and compliance measures that make accepting payments from Europe easier.
Choosing which cross-border and international payment processor to work with is an important decision for your business when you’re looking to successfully do business in Europe. Don’t be hasty in your selection process—make your decision which one to work with once you have fully investigated and assured yourself that they tick all of these boxes.