Improving efficiency in cross-border payments: key strategies and opportunities  

Everyone likes things that work effectively with the least wasted effort.

Think: LED light bulbs that consume less energy and last longer than traditional bulbs. Or lean manufacturing processes that minimize waste and maximize productivity. Or public transport that move people in large numbers without the environmental impact of individual cars.

Now think about your payment arrangements. They may work fine domestically, but are they working as hard as they could cross-border? Are they optimized for maximum efficiency?

The international payment problem

Just because cross-border payments are important, it doesn’t necessarily follow that they work well. International pay-ins and pay-outs often take too long and cost too much, certainly when compared to domestic transfers. What’s more, it’s not always clear where the funds are and when they’ll arrive.

So much of the payment process seems to be a ‘black box’. So much is either hidden or out of the sender’s or receiver’s control. For example, which banks are involved, which systems they use, and whether payments cross a business day, weekend or time zone. That’s quite apart from any language or currencies differences.

No wonder that daily cut-off times, unexpected delays, nasty fee surprises, failed payments, and wasted time sorting out back-office admin are commonplace. Far from being efficient, cross-border payments seem to be the quite the opposite: inefficient.

That’s just not helpful if your business wants to create new revenue streams. Or attract new customers in new markets. Or surprise and delight existing customers. Or if it wants to cut costs. Or improve things so it’s future-fit for years to come. Or maybe even, all of the above.

5 big ideas for more efficient cross-border payments

Here are five big ideas to help drive cross-border payment efficiencies, plus power global expansion ambitions.

1. Offer multiple payment types

Customers have their favourite way to pay and they’re unlikely to change just to shop, game or trade on your site. Remember that credit and debit cards made up only around 32% of global e-commerce values in 2022. In other words, two-thirds of payments online rely on some other method of payment.

To close more sales with more customers more often, your payment provider should support a choice of payment types, including Open Banking, cards and alternative or local payments.

2. Localize prices

Customers want to know how much things cost before they buy. So, displaying prices in a familiar currency helps you compete strongly against local sellers and boost conversion. Plus, improve authorization rates, particularly if customers’ banks only allow purchases in their own currency.

The right payment partner should be able to offer multi-currency pricing. You can then price in your customer’s currency and get paid in your chosen currency. This should come with all the back-office data and dashboards to automate reconciliation for operational efficiencies.

3. Streamline checkout flow

Attracting browsers to your website is great but converting them into buyers is even better. Strip out unnecessary fields and on-screen distractions. Look for that checkout UX sweet spot between doing enough to protect your business and customers from fraud and overdoing it which costs you legitimate sales.

Quiz your payment partner on how they can help you access a global network of bank customers via Open Banking. And integrate bank payment seamlessly into your checkout flow.

4. Monitor payment acceptance rates

Keep a watchful eye on the number of successful payments as a proportion of the total number of attempted payments. It’s a great top-line indicator of both processing capabilities and conversion rates.

 Your payments partner should have a customer success team to help you understand which transactions are being declined and why. That way, you can develop an appropriate strategy to optimize payment acceptance together.

5. Consolidate payment relationships

Maximize time, cost and efficiency savings by aggregating all your payments volume into a single provider. This enables you to manage payments end-to-end on a single contract, avoid multi-supplier headaches, harness back-office efficiencies and scale fast.

Your payment partner should also be able to consolidate payment sales, refunds and reversals into a single statement to make your life easier and help reduce manual work.