Ways to Accept Payments
Cross-Border Payments
Payment Optimization
Payment Types & Currencies
Fraud Prevention
Chargeback Management
Compliance
Payment Analytics & Reporting
Accounts Receivable Automation
Subscriptions & Recurring Billing
Invoice Payments
Virtual Terminal
Sandbox
Production
When CFOs and other business leaders think about their return on investment, it is easy to overlook payments. However, your global digital payments strategy can significantly impact profitability. Digital payments are complex — especially when international sales are involved — and there is a lot of potential to lose money to denied transactions and excess fees.
Simply calculating a basic ROI involving what you pay and what you earn through digital payments isn’t enough. You need to consider three key areas to truly determine if your digital payments strategy is delivering an acceptable return on their investment.
Cross-Border Transactions
You might think the high costs associated with selling cross-border simply come with having a global business, but they don’t have to. A cross-border payment occurs when you accept payment from a customer in a different region from where you process the payment. These fees add 1% to 2% on top of what you’re already paying to accept payments.
Additionally, banks perceive these transactions as riskier, increasing their likelihood of declining them. Our survey found that 41% of companies report a payment authorization rate of 70% or less on their international payments, so at least 30% of their cross-border transactions are declined. This compares with an average payment authorization rate in the range of rate of 85% to 95% for local transactions.
Too often, payment processors simply board merchants to one issuing bank and then run all of the transactions through that single bank regardless of where the customers are and where the business has legal entities. In that case, the business is likely subject to unnecessary fees that eat into its ROI of payments. Companies that do a significant volume of business overseas could be losing tens or hundreds of thousands of dollars a year.
However, if you choose a payment processor that can give you access to an extensive banking network and that possesses the technology to allow you to take advantage of local card acquiring whenever possible, transactions can be routed to a local acquiring bank to eliminate unnecessary fees and improve transaction approvals.
Customer Experience
The loss of a declined transaction is more than the transaction’s value. Customers whose transactions are unnecessarily declined have a bad customer experience, driving them to make this and likely future purchases from a competitor. They may even tell friends and family about their negative experience, compounding your potential future loss.
Customers today have high expectations for online and digital payments: they want them fast and frictionless, and they want to pay with their preferred payment method. If your checkout and payment process is unnecessarily complicated, offers limited alternative payment methods or unfamiliar currencies or seems insecure, your customers could go elsewhere. This will cause your ROI to falter, leaving you to struggle against the competition.
Managing & Maintaining Multiple Accounts & Vendors
One final, but critical, consideration for your payments ROI is the overhead spent managing and maintaining your solutions. As businesses grow, selling into new geographies or adding on new payment use cases, they often need to contract with additional payment solutions or create additional accounts to meet these needs. And this can dig into your ROI.
When calculating your payments ROI with multiple processors and/or accounts, you have to consider not just what you pay, but the time and resources you dedicate to maintaining each separate solution. Standing up and maintaining a new payment processor is often time-consuming and expensive. There’s onboarding, employee training, integrations to build, install and maintain, and time spent dealing with any issues you might encounter. And the same can apply even if you have multiple accounts with the same processor.
While working with multiple processors doesn’t always end in disaster, many companies simply don’t have the time, knowledge or resources to effectively and efficiently manage multiple payments providers and maintain a high ROI.
How BlueSnap Can Help You Boost Your ROI
If you’re interested in learning more about how BlueSnap’s Global Payment Orchestration Platform can help you improve your ROI on payments and confront the challenges discussed in this post, download our eBook Redefining ROI: Unveil the Hidden Costs that Reduce Your Bottom Line.
You can also speak to one of our Payments Experts to learn more about improving your ROI of payments.
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