Cross-border commerce is just about everyone’s strategic priority right now given the massive revenue opportunity that it represents. But, as everyone knows, supporting commerce in 220+ countries is expensive, and complicated. Best practices are beginning to emerge now that enable faster, better and safer cross border commerce than ever before. These best practices are laid out in detail in a new report from CyberSource that takes into consideration issues related to both sales conversions and the back office and operations.
Critical to in country sales conversions are both checkout localization and fraud management. And according to CyberSource’s, the following are best practices critical to efficient and frictionless checkout and payment localization:
1) Optimizing checkout pages: Instead of going through the complex process of creating and maintaining several checkout formats, companies can use “responsive forms” that detect the format of the device used. And since quite a lot of that volume is generated via mobile devices, digital wallets and 1-click checkout options should also be implemented.
2) Calculation of taxes and duties: Sales conversion is also greatly affected by taxes, shipping and customs duties around the world. When these fees are not clearly presented to the customer, they may abandon checkout. To avoid this, businesses can calculate taxes in real time and present them at checkout.
3) Currency presentation: There are three main ways to present pricing in the customer’s currency while processing payment in a company’s base currency. Local presentment or acceptance involves using the merchant’s payment processor or acquirer to process payments in a specific country’s currency. Dynamic currency conversion (DCC) detects the currency in which the customer’s card is issued and offers them a choice of paying in the merchant’s base currency or the billing currency of their card. Finally, multi-currency pricing (MCP) is a service that lets the merchant dynamically convert base prices into multiple currencies.
4) Payment methods: Merchants need to consider the cost of payment acceptance, the alignment with the product or service and the target audience, the local card markets and restrictions, cannibalization versus incremental sales, and implications for operational, back office and IT complexity. CyberSource recommends that businesses limit the number of payment methods they offer to about four.
5) Payment plans: In some countries, credit or purchase frequency limits on certain payment methods call for the merchant to offer installment payments in addition to single-time payments. Sometimes, a particular culture might also prefer installments.
In addition to domestic payment schemes, merchants looking to expand must, like anyone else, face the risk of fraud. To help manage fraud, being aware of the differences between anomalous and normal behavior is key – especially since purchasing behavior can vary depending on the country. A good strategy for merchants is to take advantage of as much data as possible, use analytics that can be localized, and supplement in-house resources with local experts.
While there are a variety of fraud management methods that may prove successful, the industry has had about 15 years to sort out fraud online. The question that remains is what more can be done to further protect online transactions across the globe?
For more on CyberSource’s framework for expanding cross-border sales and what can be done to manage fraud, download the white paper here.