Fees, Fraud, and Bad FX: Take the Pain Out of Cross-Border Payments

Image of a business woman standing behind a large desk looking over papers on the desk. She looks stressed and like she is making a big decision.

Cross-border payment processing is something most merchants aren’t thinking about until they experience issues with it. And then, it demands their attention in a way that cannot be ignored. 

But when merchants are in crisis mode, it’s never a good time to make strategic financial decisions that will affect a business long-term. So let’s get ahead of the game now, while everything is quiet and the cross-border payment processing monster sleeps.  


Cross-Border Payments Primer

What happens when a merchant processes a cross-border payment? On the surface, not much: The correct payment option is selected, the applicable taxes, shipping charges, and foreign exchange rates are applied - and then the transaction is complete. Easy, right? Well… not really.

That's the trouble with cross-border processing – it’s largely misunderstood because it appears to be a simple concept. But beneath the surface, the payment processing monster has complexities that many merchants are only vaguely aware of. Let's explore it's anatomy in more detail.


Beyond FX Rates to Fraudsters & Hidden Fees

Foreign exchange rates are the most visible difference merchants need to account for when processing globally, yet it’s often the least of a merchants’ cross-border worries. There are a host of other concerns to have on one’s radar.

Fraudsters, for example, view global ecommerce as a candy store, and unwary merchants are an easy mark for credit card fraud and chargebacks. The bad guys know you won’t find out until it’s too late, and then your processor will cover losses. That is, until they don’t. Inevitably, Mastercard and Visa (for example) will cut you off, as you present too much of a risk. And if you think that’s bad – it gets worse.

Assuming you’ve yet to be targeted by fraudsters, merchants unwittingly create their own financial problems by misunderstanding localization. They assume that having a variety of international currency options is enough, but it misses the mark in so many ways, ranging  from not offering the correct payment processing options for a location (there are hundreds to choose from worldwide) to failing to mention the additional processing fees consumers will be hit with for not purchasing locally. 

Oh, you didn’t know about those fees? Your consumer doesn’t care – they won’t be back.

As these cross-border complexities rise up to the surface and you are left to deal with the fallout, you’re left unsure of next steps. 

Woman sitting behind a macbook looking off into the distance, as if she is contemplating next steps.

What can you do? 

Moving forward, learn from the situation and search for workable solutions that help you avoid these ROI bashing hurdles in the future. But make sure you get out in front of the problems as soon as possible!

Fortunately, Reach has a solution that allows merchants to avoid those frustrations and financial challenges, allowing them to keep their focus where it needs to be – on running a successful (and growing!) global business.

There are two sides to this coin to consider: the merchant and the consumer. And Reach’s Merchant of Record model makes payment processing a seamless experience for both. 


Seamless & Safe Cross-border Payments for Consumers & Merchants

As we’ve detailed completely here, the Merchant of Record model really changes the global game for retailers. 

Here’s why: Successful cross-border transactions require relationships with multiple banks to work through these steps:

  • Converting cost to local currencies
  • Completing local processing of transactions
  • Connecting to local banks  
  • Complying with local regulations 
  • Reaching the acquiring bank 
  • Making it through each regulator’s fraud restrictions

In addition to the above, the associated costs – the interchange rates - are not kind to foreign entities. Every step of the journey detailed above incurs a fee, and as the distance between the issuer and processor increases, so do the associated fees.

But the Merchant of Record model avoids those fees (as well as false fraud charges that are annoying, but a major part of preventing legitimate sales from going through), because Reach has local entities in every country you seek to process in, and does the work for you. We are up-to-date on all local regulations and create a one-stop-shop for both customers and merchants to process globally, while experiencing the benefits of localization. Reach is “local” all over the world, so its partner merchants are, as well.

Image shows an upward trend arrow drawn on glass with a black marker. Behind the glass is three businesspeople smiling and looking at a document together.And, best of all, the Merchant of Record model increases sales. Not only because more legitimate sales are processed (making it through false flag fraud detection), but also because you’re now offering the precise local payment options that consumers in a given locale seek. Most global customers prefer using the currency of their home countries when buying online, and they’ll remember that you offer this option. They’ll not only return, they’ll tell their friends and family to shop from you as well. Win-win!

When you’re ready to explore these options in depth, be sure to reach out. We’re happy to walk you through the cross-border payment options and how the experience will look for your brand, specifically. 

Every merchant is unique and so is every solution.


We’re happy to help you reach your worldwide customers in ways that work best for them – and for you!

Reach simplifies cross-border ecommerce for forward-thinking organizations with ambitious global expansion goals.