Keep your international customers happy by reducing foreign transaction fees.

Whether you’re just beginning to test the international marketplace or you already have a wide array of customers from different nations, cross-border transaction costs are a reality you will never be able to totally escape.

When you accept foreign transactions, these fees can add up to one percent of each credit card purchase, eating into your profit margins and irritating customers. Luckily there are mistakes you can avoid that can reduce the sting of these charges.

What are cross-border interchange fees?

As a business owner, you are already well aware that you pay a standard interchange fee whenever a customer makes an in-person or ecommerce purchase using a credit card. When you accept foreign transactions, you are often also slapped with a per-transaction cross-border charge of one percent.

It is the card companies that dictate when one of these fees will be levied. For instance, an Italian shopper who buys one of your products with a Mastercard will be charged an additional fee, whereas that same person buying an identical item from a French seller would see no markup.

How to make international ecommerce more economical for you and your customers.

Business owners are not the only ones feeling the pain of foreign transaction fees. When a shopper spends $1000 on products from your ecommerce shop, they will notice an extra $10 added onto their bill.

All too often, buyers who do not understand international ecommerce will think that you are responsible for the cost and may even initiate a chargeback. Because foreign transaction fees affect your bottom line and frequently cause buyers to become disenchanted with you in favor of local sellers, it is in everyone’s best interests to reduce or eliminate these charges whenever possible.

The importance of choosing the right payment gateway.

As we saw in the example above, foreign transaction fees are set by the card companies. Those sellers who have established relationships with banks that are local to their international customers are often not required to pay them.

That is because when these connections are in place, each card transaction can be routed to the nearby bank that is in the same region, thus eliminating the additional charge.

That might all sound well and good, but how does an ecommerce seller in the United States go about establishing ongoing legal relationships with financial institutions around the world?

Most business owners have neither the time nor the financial resources to travel the globe with this mission in mind. The answer lies in the payment platform you choose. Heed these tips for choosing a payment gateway and many of those pesky charges will disappear once and for all.

How to choose the gateway that’s right for your business.

Since each retailer has its own unique needs and customer base, it stands to reason that there are several payment gateway options to choose from. This web application is what your customers will interface with as they go through the checkout process, so you must pick one that will engender trust and meet all of your business requirements at the same time.

As you go through the selection process, keep these important suggestions in mind:

• Consider the price. Although what you pay for your gateway should not be the only factor, it is a crucial consideration all the same. What you pay will depend on several factors: the kind of business you have, your monthly or yearly sales volume, and the types of payments you want to accept, among others. Additionally, you may be required to pay setup fees and could even be penalized if you fail to sell a minimum amount each month.
• Understand your international customers’ devices and payment preferences. The ways people like to pay (as well as the devices they use) can differ widely from country to country. The international gateway you settle on should be compatible with these regional and cultural differences.
• Be sure your gateway integrates seamlessly with your website platform. This is true whether your site operates on a prefabricated space like Shopify or WordPress or on one that you have customized for yourself. Before you make the final decision, be certain that the gateway supports your chosen platform without glitches or all-out interruptions that could damage your business’s credibility and cause shopping cart abandonment.
• Consider multi-currency options. Accepting payments in the currencies your foreign customers are familiar with is more than just a courtesy. For many buyers, it is a deal-breaker. If you fail to allow them to pay in their native monetary denomination, many shoppers will simply click elsewhere. Therefore, be sure to choose an international gateway that is capable of securely, seamlessly, and affordably processing the currencies you want to accept while connecting to local merchant banks abroad.
• Choose a scalable gateway that can grow with your business. Consider, for example, the case of recurring or subscription payments that have become so common in the fashion, fitness, and software-as-a-service sectors. Your gateway should allow you to offer recurring billing to your international customers that automatically withdraws a predetermined sum of money from their credit card or bank account each week or month. Even if you don’t want to offer this payment option right now, it’s nice to have the capability should your business model change.
• Focus on customer service. The international payment gateway you choose should work as flawlessly as possible with your other systems. Even so, problems may arise. When they do, your provider should offer around-the-clock customer service and technical support that you can access in a number of ways: via user forums, chat, email, and phone. Since each minute of downtime represents a potential loss of income, your provider should make it a priority to help you get up and running again as quickly as possible.

When you integrate a high-quality international payment gateway into your business, it will bring many advantages. Because it will maintain a secure and flexible payment environment, your customers are more likely to be happy with their shopping experience, paving the way for repeat visits and higher profits.

Moreover, your gateway can even help to reduce those pesky cross-border transaction fees that can be so irritating to customers and such a drain on your bottom line.

Although the initial search for the best provider can seem daunting, the payoffs are numerous when you find the gateway that best fits the ecommerce needs of your business!