Cross-Border Payments: What Happens Under the Surface? [Infographic]

Cross-border payments, or cross-border transactions, occur when the acquiring bank and the issuing bank are in different regions. When banks process cross-border payments, they perceive them to be riskier than domestic transactions, leading to higher fees and a greater likelihood of being declined.

Cross-border payments can take any of the same forms as domestic payments, from eWallets and card payments to bank transfers. It’s important to be able to accept all types of payments, including payment types native to particular countries you sell in. That way, customers from around the world find it easy to pay. Shoppers in different countries also have different purchasing habits, such as on mobile vs. laptop. The more you tailor the experience to your customers’ locations and preferences, the more you will sell.

Yes. Presenting in local currency is when a merchant charges a customer in the currency local to them. Many merchants instead charge in the currency local to their business, which has negative impacts including:

• Higher cart abandonment due to the cardholder not knowing the final cost.
• Higher rate of declines from the cardholders’ banks due to perceived risk.
• Higher billing inquiries from cardholders confused by converted amounts on statements.
• Higher chargebacks from cardholders seeing a price they didn’t agree to on their statements.

By offering local currencies to your shoppers, you decrease the likelihood of cart abandonment, declined transactions and chargebacks.

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In international transactions, payment failure can occur because of automated fraud filters, mismatched currencies and regulatory and compliance issues:

• Fraud & Risk Rules: Issuing banks may decline foreign transactions because they are considered to be higher risk. Many automated systems mistakenly flag such transactions as fraud.
• Currency and Payment Method Misalignment: International payments often fail because the business does not offer buyers’ local currencies and preferred payment methods. This leads to friction and higher purchase abandonment.
• Regulatory and Compliance Issues: When selling internationally, payment regulations and compliance differ by region. Failing to meet the requirements can result in declines and sometimes penalties.

Businesses can minimize payment failure in international transactions by localizing the payment experiences for their customers and taking advantage of local acquiring whenever possible.

Processing card payments comes with associated fees. When you process cross-border card payments, additional fees are charged on top of them. These additional cross-border fees are fixed, non-negotiable and set by card networks.

Yes, unnecessary cross-border fees and foreign transaction fees can be avoided. When you use a payment provider that can help you process your payments as if they were local with local card acquiring, helping to increase your authorization rates and avoid unnecessary fees.

Yes. BlueSnap supports preferred global payment types and currencies, including digital wallets, ACH, SEPA, major cards and local payment methods. This ensures that customers can pay how they prefer, improving your conversions and customer satisfaction.

By optimizing transaction routing and using local acquiring banks, BlueSnap helps reduce cross-border fees, interchange rates and gateway charges. BlueSnap also consolidates reporting and third-party integrations, reducing operational overhead.

BlueSnap uses a variety of strategies to optimize payments, including:

• Intelligent payment routing through a global network of banks and acquirers
• Failover transactions to secondary acquiring banks if the first attempt fails
• Smart retry logic that reattempts failed transactions at the best possible time
• Local acquiring to reduce cross-border fees and increase approval rates
• Real-time analytics to identify and act on payment issues quickly

BlueSnap does all of this to help you increase your authorization rates and lower the costs associated with payments.

BlueSnap offers local acquiring in 50 countries. Local acquiring provides both lower cost and higher authorization rates. To take advantage of local acquiring, merchants may use existing legal entities or choose to open legal entities in regions where BlueSnap offers local acquiring.

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Intelligent Payment Routing reduces payment failure by routing payments for the highest likelihood of approval and for the lowest cost, reducing the chance of payment failure. When the payments are cross-border, this includes routing the transaction to a local bank, in accordance with Card Brand rules.

By offering preferred payment types and currencies, local acquiring in 50 countries and support in regions worldwide, BlueSnap helps businesses localize checkout experiences and significantly reduce cross-border fees all with a single integration and a single account. This allows businesses to streamline their operations and reduce technical debt.