The Missing Piece
The Missing Piece
As domestic ecommerce is experiencing a downturn, more businesses are going beyond their borders to increase their global sales. Companies looking to capitalize on this trend and optimize their global checkouts often look to partner with Global Payment Service providers.
This is for a good reason. They heavily market that you can go global with just a flip of the switch. And technically this is true. Through one streamlined integration, payment platforms can help companies accept 135+ currencies, local payment methods, and credit card acquiring.
However, there are many missing pieces to what it actually takes to create a successful global strategy that no one talks about.
One example is that every payment provider offers the ability to accept multiple currencies. Yet, the vast majority of companies selling globally do not enable more than one currency. Why is that? It is not due to technical issues, but the operational complexities involved with offering multiple currencies that global payment platforms do not address.
These operational complexities range from setting up local pricing strategies in each market, managing FX risk, and handling the additional logistics of reporting and reconciliation.
Another big missing piece is how do cross-border brands take advantage of local acquiring. Global payment providers heavily advertise and avidly preach in publications about all of the benefits of local acquiring. With desirable benefits like Increased conversion rates and reduced processing fees, accepting payments locally vs. cross-border is hands down the clear winner.
Again on a technical level, you can easily plug into a local acquiring network through the payment provider’s platform. But a big piece they leave out from the marketing, is that in order to leverage the local acquiring, you are required to set up local operations and legal entities in your desired foreign markets.
Global payment providers are ideally built for the likes of Uber, Netflix, and Airbnb, who have the size and sophistication to set up global operations. But for companies looking to grow their international sales, the cost and complexity of setting up just one entity outside their domestic market, let alone two or three, is often too significant of a barrier. These expansion requirements force the large majority to process transactions cross-border and just accept increased fees as the cost of doing business.
And then there's taxes. A lot of global payment platforms now have the ability to calculate the tax at checkout. This is a great service, but it still means you have to register, file, and remit sales tax, in the countries you are selling cross-border into. The regulations associated with this also vary from country to county, and in the case of countries like the United States, even vary between different States. Registering, filing, and remitting in your domestic market is usually doable for a business. But, when factoring all the different country regulations, data formats, timing, and currency management, a large team of experienced international accounts is required.
So, if you want to expand globally and increase your cross-border revenue but don’t have an in-house pricing, legal, and treasury team to manage all of the intricacies required to be successful - what option do you have?
This is the exact problem that Reach was built for. Like the top payment providers, we provide a global platform to accept 135+ local currencies and access to local acquiring in 40+ countries. But, with our dynamic Merchant of Record model, we remove all of the roadblocks like currency risk, operational complexities, and tax/legal regulations. This allows you to utilize the same optimal setup as the big guys. Integrate today and start capturing revenue in your desired cross-border markets without increased fees, hassle, or risk.