The shift to eCommerce, as accelerated by the Covid-19, has altered the way consumers around the world shop and pay. This continues to offer multinational online retailers the opportunity to attract new customers. Merchants who have optimised their payment strategies and provide a localised offering to what their target audience know and trust are better placed to enhance the customer experience while increasing their payments acceptance and revenue. Cross-border payments include different types of money transactions, like:

• Bank transfers
• Electronic funds transfers
• Card payments
• Digital currencies
• Digital wallets
• Buy now, pay later
• Voucher-based payments and many more…

Let’s see in details how the main types of cross-border payments work:  Bank transfers Also referred to as wire transfers, a simple cross border transaction using accounts held at each bank would involve a payment message sending an instruction to debit an account in Bank A and credit an account in Bank B.  Credit card payments Credit cards play a significant role in cross border payments, and are a preferred option for many consumers. From the consumer’s perspective, they simply enter their card details and wait for the transaction to be verified. Behind the scenes, cross border payments require more work from the involved credit card networks and acquiring banks as they need to convert between two different currencies. This additional workload results in extra fees that are passed down through the payment chain. eWallets Commonly available through apps for smart devices, eWallets like PayPal, Neteller, Alipay, Apple Pay and Google Pay allow users to safely store their payment cards of choice so they can pay for goods and services. Some eWallets support multiple currencies and the ability to place orders across borders. Although wallet to wallet transactions do not technically count as cross border transactions, they do help facilitate the transaction. Why use cross-border payments? Globalization, digitalization and the rise of eCommerce have changed the way consumers around the world shop, creating a truly global marketplace. In this environment, merchants have the opportunity to enter new markets and access new customer bases. There are numerous benefits to developing a cross-border payments strategy:

• Cross-border payments enable merchants to capitalize on the rapidly growing global cross-border B2C eCommerce market, which is projected to be worth $4,195.4 billion by 2027
• Cross-border payment options allow for a more personalized customer experience by enabling merchants to present consumers with their choice of popular regional payment methods.
• Most cross-border payment platforms are mobile-enabled, so merchants can pay invoices for suppliers from any device and any location; intelligent scheduling also makes it so that merchants can schedule invoice payments.
• Cross-border payment systems process domestic and international money transfers using a single platform, enhancing accounts payable efficiency and transparency.
• Cross-border payment platforms enable merchants to connect to multiple acquirers, including local acquirers, which results in higher bank approval rates, lower interchange costs and greater risk diversification.
• Cross-border payments increase merchants’ ability to customize authentication and fraud rules using configurable workflows and risk management options.

The benefits of using cross-border payments are undoubtedly more than the disadvantages, but it’s a lot of information to handle for SMEs. For this reason, during the EUCBEC Forum 2023 we will address this topic and connect you with industry-specific experts to better tackle this subject.