It’s been frequently sad for the last decade that the world has become a global village. Virtually everything is available 24/7 with just a few quick taps of our fingers no matter where you currently live. This also extends to commerce – goods are imported and exported, transferred and shipped across the globe in mere days.
Now, where there’s commerce, there’s a need for payment and since webshops are located all around the world they need to support international payment transactions enabling all shoppers to have easily accessible payment methods. For the payments to go smoothly the sellers employ payment processors.
What are Payment Processors?
Payment processors are key factors in successful payment transactions. Payment processors are third-party companies or services that facilitate secure transfer of funds between the customer and the merchant, more precisely the issuing bank (customer) and acquiring bank (merchant).
When talking about international payment transactions, it’s important to distinguish payment processors from payment gateways, since people often get them mixed up, or even think they’re the same. Without getting too complicated, payment gateways encrypt and send credit card, or payment service information (from the customer’s bank/service to the merchant’s bank); while payment processors handle the actual transaction (fund verification and money transfer).
Why Payment Processors are Important?
To put it simply, international payment transactions wouldn’t be possible without payment processors. They handle every aspect of a money transfer, and while looking from the outside that doesn’t seem like much, behind the scenes it’s a lengthy process. Let’s break it down:
- Transactions – the core function, and one most important to the customer and merchant, payment processors handle the transfer of money from one bank to another within the transaction process.
- Authentication – before the transfer can begin, a payment processor will first confirm there are sufficient funds to complete the transaction and verify the identity of the customer. Authentication is key in detecting fraud.
- Security and encryption – since payment transactions are digital, they fall under the same danger as any other sensitive data transfer, if not more so. Every payment processor must ensure the transaction is secured and encrypted. They also need to comply with the Payment Card Industry Data Security Standard for all cardholder information collected.
- Analytics – transaction data is stored and can be used by merchants and businesses to track trends and modify their strategies accordingly.
- Currency support – with most merchants using the web for worldwide sales, it’s crucial to accept all currencies and forms of payment. Good payment processors support a multitude of local payment methods and currencies enabling merchants to receive payments in their local currency.
Things to Look for When Choosing a Payment Processor
As with everything else in business, it’s important to know how to choose the right tool for the job. There are many payment processors out there, but not all of them provide the same level of service. These are just some of the main factors worth considering when choosing:
- International currencies – if you’re planning to sell on a global scale, it’s essential to have a payment processor that supports a wide range of currencies.
- Payment methods – customers will want to pay in different ways, so why not allow them? Find a payment processor that supports all types of payment methods which include digital wallets, credit and debit cards, payment services, cash on delivery, etc.
- User-friendly interface – the checkout page on your shop should be the easiest page to go through on your site. Make it so that even novices to web shopping will be able to easily finalize their orders.
- Support – sooner or later, things tend to go wrong. There’s simply no avoiding the fact. Find yourself a payment processor that has customer support available 24/7 and has a history (if not a guarantee) of handling issues quickly and efficiently.
- Pricing – don’t look only at the bottom line. A barebones plan that doesn’t cost much could end up hurting you more in the long run because it lacks important features. Analyze your business model, plan, and strategy to find the optimal solution that works for you.
Conclusion
Pretty much all markets today are globally accessible. All the merchants, and businesses in general for that matter, need to embrace this fact. Why would you want to limit yourself to only local or regional sales when you can just as easily tap into a much bigger pool?
Now, if you’re planning on selling in the US, Europe, China, Brazil, Japan, and everywhere else in between, you’ll need to have the appropriate infrastructure to handle it. International payment transactions require payment processors that can handle a multitude of local currencies, and payment methods, provide security and support, analytical data, etc. while, at the same time, being competitive when it comes to pricing, so it doesn’t eat too much into your profits.
Before you figure out the best solution that works in your specific case, run an internal in-depth analysis, do some external research (by consulting specialized sites like Yuupay) and make yourself a couple of viable projections. There’s bound to be the perfect solution for you out there.
