When businesses consider their international payment strategy, it is important that they begin by visualising the end result. They must decide what channels they want to support, what banks they will deal with, what payment methods they will accept, how to manage currencies, as well as the importance of fraud protection at every stage of the payment process.
In short, they must remember that in order to have the widest possible reach of customers – and therefore the biggest opportunity to improve sales – they have to plan for a payment strategy that offers customers payment flexibility in a safe and trustworthy environment.
Selling in a situation where the buyer is not present can be risky for the customer and for the vendor. Businesses can never be sure that the consumer is the card owner and customers have to trust the vendor if they are to purchase from them. In order to manage this, the seller needs to establish a payment strategy that allows customers to pay in a way that is secure and convenient for them – through multiple channels and from multiple locations.
When deciding on which channels the payment process will support, it is essential that retailers consider the individual attributes and requirements of each channel. For customer-not-present sales, businesses need to consider whether they want to sell via mail order, online sales, recurring payments, call centres, interactive voice response etc. It may be the case that some products or services will sell better via certain channels, depending on the target demographic.
The product and sales method will also determine how customers can be given the opportunity to purchase other relevant products at key stages of the payment process. In this way, both the customer and the vendor can benefit from a well structured and thought out payment strategy.
Online sales have changed the way that retailers reach their target markets and have also opened borders for international selling. For example, a British business could be trading in Sterling but selling to a customer in the U.S. This introduces an additional consideration for a company’s payment strategy – multi-currency pricing and currency conversion.
If businesses have outgoing costs in foreign currencies, settling in these currencies may be convenient so that suppliers can be paid in their local currency.
However, for more remote currencies in which a business has no outgoings, it may be more convenient to operate and settle in a base currency. In this circumstance, if the currency of the customer and the currency of the transaction are not the same, the vendor has the opportunity to control the exchange rate.
Fraud risks and control measures
Telephone and online sales can leave customers exposed to a high risk of fraud. In order to develop a trustworthy and secure payment process, fraud controls need to be put into place. A combination of fraud scoring, payer authentication, address checking and security code checking can be implemented to ensure the safety of customers.
By gathering as much information as possible, without compromising the sales process, customers can feel safe that their information and money is secure and vendors can be reassured that their customer is who they claim to be.
It is, however, important to consider that in some countries there are very strict laws regarding data privacy and so when businesses start to sell in other regions, they must know their responsibilities – as customers have rights to ensure that transaction information will be protected.
Clearly there are many challenges involved in defining and introducing an international payment strategy, but there are tangible business benefits in doing so. With the ability to reach a broader range of customers and cross sell products, a well defined payment strategy – often gained by partnering with a suitable solutions provider – can boost sales and encourage customer satisfaction and retention.