The online payments solutions company BlueSnap has published its findings regarding the key challenges businesses face when completing cross-border payments.
BlueSnap’s ‘Cross-Border Digital Payments: Pitfalls and Priorities‘ survey highlights the drastic losses in sales and revenue and hefty expenses companies can incur if they do not optimise how they process payments on goods and services sold internationally.
Conducted in partnership with Pulse, the new study found that 68% of companies that sell to international customers are processing payments in the country or region where their business is headquartered rather than where they have a local entity and their customer is located.
This approach to processing payments often garners dramatically lower payment authorisations rates. According to the study, 41% of companies reported payment authorisation rates of 70% or less, meaning that businesses could ultimately be losing more than 30% of their international sales.
“Over the last year, we have seen a lot of businesses switch up their business models with a renewed focus on online sales as physical stores shut down due to lockdown,” comments Nikhita Hyett, Managing Director, Europe at BlueSnap. “So as their customer base opens up, due to cross-border trade, businesses must ensure they have the right payment solutions in place to maximise sales and reduce costs. At BlueSnap, we are proud to be helping many businesses avoid this 30% loss in international sales, through our suite of cross-border products and services.”
Without the right payments partner, processing international payments can result in 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% 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 optimising wholesale and retail payments for an increasingly globalised eCommerce market has never been more apparent.
Less visible is the tremendous technical debt businesses are saddled with – nearly a third of companies are managing four or more payment providers to facilitate international sales. 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.