Cross-border retail is designed to give consumers the opportunity to purchase compelling and inexpensive products that cannot be found in their own countries. However, challenges like unclear exchange rates, hidden costs and declined credit cards drive many shoppers to abandon their carts and buy locally, instead. Until merchants cab smooth this rough cross-border retail road, both offline and online consumers will continue to pay the price, or simply avoid paying the price by purchasing only locally.
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Customer experience: trust is crucial
Large retailers actively nurture trust in their local markets. They understand the importance of customer experience in driving sales and facilitating conversions. But how is it possible to strengthen consumer confidence and create trust with an unfamiliar audience, in a new territory? Much of cross-border consumer trust has to do with familiarity and comfort zones.
For example, whether online or offline, cross-border customers should have the option to see prices in their own currencies. Online, this is quite feasible throughout the path to purchase. Offline, it’s at least feasible after card swipe at the POS. Currency conversion should be seamless, immediate and reflective of optimum and up-to-date conversion rates.
Card declines are an annoyance to online shoppers, and can prove awkward at the POS. Merchants need to ensure that their acquirers accept all locally-common forms of payment, without deterring cross-border consumers by passing on steep processing costs.
Statement surprises undermine trust. A customer who is surprised by hidden costs from cross-border transactions on his or her monthly card statement will not be a return customer. Merchants must act to eliminate these charges by intelligently routing payment processing and notifying customers, up front, of the surcharges they may encounter.
Lastly, consumer protection laws vary in different countries. Given the vast national differences in return policies and retail dispute resolution, merchants who make cross-border consumers aware of their rights regarding a specific purchase can proactively grow trust.
Promising tech solutions
The good news is that recently-introduced solutions like BorderFree, TradeGlobal, Global Shoppex and PayPal Passport are smoothing the road to cross-border retail. Today, retailers have the option of connecting to multiple acquirers, offering localised payment methods, outsourcing logistics management and intelligently routing transactions between selected acquirers to optimise processing fees and reduce decline rates.
This simplifies integration, increases flexibility, and enables retailers to provide a seamless payment experience across all channels, in any currency, with any payment method.
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Some things to look for
There is much to take into consideration when choosing a solution to facilitate cross-border retail.
An effective solution for managing cross-border logistics needs to make payment more comfortable for the consumer by automatically converting prices into local currencies, calculating taxes and duties, factoring them into the price and reducing cross-border fraud.
Additionally, an effective cross-border retail solution should minimise the hurdles surrounding international shipments and customs clearance, global order tracking, inventory transparency (enabling customers to see real-time, up-to-date information about what’s in stock and what has sold out), and international returns.
Cross-border retail solutions must integrate regionally preferred payment methods to make consumers more comfortable paying on their websites. Support for PayPal is a good start, considering it is used for cross-border transactions by consumers and retailers in 57 countries. However, a truly international solution will include support for the numerous region-specific e-wallets in daily use by millions of potential customers. These include Alipay for Chinese consumers, Klarna for the Scandinavian region, iDeal for consumers in the Netherlands and Germany, Qiwi and Yandex for Russia, and many more.
Solutions should optimise international marketing efforts but catering to consumer preferences is only half the battle. Many cross-border solutions enable merchants to optimise these efforts by educating them about local holidays, sales seasons and more.
An effective and forward-thinking cross-border retail solution will offer international marketing messaging services to help retailers optimise their international sites and improve localised marketing campaigns.
Currency differences pose costs but effective solutions focus on decreasing transaction costs. Merchants need to be able to dynamically route transactions between acquirers and e-wallets, calculating the optimal route for every transaction. The flexibility to strategically route payments between selected acquirers transforms international payments into local transactions, eliminating cross-border and currency-conversion fees and optimising costs and acceptance rates.
Finally, retailers must be able to effortlessly connect to a network of financial institutions, including additional acquirers and e-wallets. Today, many are deterred because switching between acquirers and payment service providers is considered complex and involves significant infrastructural challenges. Thus, an effective cross-border retail solution should enable retailers to effortlessly connect to multiple acquirers and e-wallets, while minimising the infrastructural efforts associated with doing so.
This article was originally posted here on Entrepreneur.com.