The study pinpoints three avoidable findings for businesses selling internationally:
– 68 percent fail to take advantage of local acquiring – resulting in lower sales due to sub-par authorization rates and increased costs due to high cross-border fees
– Almost half estimate that they’ve lost up to 10% of their revenue by not offering the right payment options
– 80 percent are mired in technical debt trying to manage 2 or more payment providers
BlueSnap, a payment company helping businesses accept payments in over 200 geographies, today released findings on how businesses approach cross-border payments. The survey highlights the drastic losses in sales and revenue and hefty expenses companies can incur if they do not optimize how they process payments on goods and services sold internationally.
Read More: SalesTechStar Interview With Tim Norris-Wiles, Managing Director Of EMEA At Habu
The new study, conducted in conjunction with Pulse, found that 68 percent of companies that sell to international customers are processing payments “cross-border” – meaning that they are processing payments in the country or region where their business is located rather than where the customer is located. This can result in dramatically lower payment authorizations rates. According to the study, 41 percent of companies reported payment authorization rates of 70 percent or less, meaning businesses could be losing more than 30 percent of their international sales.
Another consequence of processing payments “cross-border” is incurring significant cross-border and foreign exchange fees applied to both businesses and potentially their customers for each transaction. Cross-border fees can add more than 1 percent to the payment processing cost for each transaction.
With the Bank of England reporting that cross-border payment volumes will reach $250 trillion by 2027, the importance of updating and optimizing wholesale and retail payments for an increasingly globalized ecommerce market has never been more apparent.
Read More: JotForm Data Finds Partisan Split On COVID Screening
Less visible is the tremendous technical debt businesses are saddled with – 80 percent of businesses are managing 2 or more payment providers to facilitate international sales, with more than 30 percent managing four or more payment providers. Business leaders report challenges with keeping all the payment integrations up to date, managing multiple vendor relationships and inconsistency of capabilities across payment integrations. In fact, almost half of businesses estimate that they’ve lost up to 10% of revenue by not offering the right payment options.
“We see businesses struggling every day with cross-border payments. They often don’t understand the dramatic impact their current payment choices are having on sales and costs,” said Ralph Dangelmaier, CEO at BlueSnap. “We help businesses every day with a better way to serve international customers while increasing sales, reducing costs and eliminating technical debt.”