Introduction:
The most recent WTO Goods Trade Barometer, released on August 23, 2022, was consistent, indicating that global goods trade would continue to rise in the second quarter of 2022.
The Goods Trade Barometer is a composite leading indicator for global trade that provides real-time data on the trajectory of merchandise trade in relation to recent trends.
In 2021, global trade reached a record level of $28.5 trillion, with a growth rate of 25% from 2020. The trend seems steady; according to the United Nations Conference on Trade and Development‘s (UNCTAD) Global Trade Update, which was released on July 7,2022, the value of global trade climbed to a record $7.7 trillion in Q1 2022, a jump of almost 15%, or $1 trillion, from Q1 2021.
Trade in merchandise goods reached around $6.1 trillion, up nearly 25% from Q1 2021. The value of trade in services soared 22% from Q1 2021 to about $1.6 trillion.
The report indicates that global trade is expected to remain positive despite the ongoing Russia-Ukraine war.
The previous year’s worldwide e-commerce trade was about $4.9 trillion, nearly 17% of total world trade, and is expected to soar to USD 7.4 trillion by 2025. It indicates that the e-commerce market is one of the fastest-growing sectors of world trade.
Why is a Payment Gateway Essential?
Suppose a business wants to enter this lucrative and open-air eCommerce market independently with its own website or app. In that case, it will need a Payment Gateway to accept payments by various modes, including credit or debit cards. Alike, if a merchant wants to set foot in an international or cross-border market, then he needs an International Payment Gateway to accept international multi-currency payments.
What is a Payment Gateway?
An international payment gateway is a mechanism or technology that collects payment information from a customer, encrypts it, and sends it to the merchant’s bank in protected figures. An international payment gateway enables multinational buyers to make payments in their currency for any purchase.
Why international expansion of business?
As we saw in the introduction, the foreign market is massive! After accessing the worldwide market, you can reach almost 8 billion people. More than 2 billion people shop online globally, according to Facebook and Bain & Company survey, and a sizable portion of the population is still upgrading toward technology.
The COVID-19 pandemic has recently emerged as one of the greatest threats to the global economy and financial markets. However, eCommerce, OTT platforms, online pharmacies, and groceries are the few industries that have shown notable growth. The world is evolving toward digitalization and is seizing every opportunity to use technology to improve the quality of life.
There are other significant reasons as well, such as higher needs, an infatuation with foreign goods, purchasing power parity, etc.
Is the International Market riskier than the Domestic Market?
Yes, it’s true that selling internationally may carry greater risk than selling domestically, but we all know the fact that “higher the risk, higher will be the return.” Mellody Hobson (an American businesswoman) said, “The biggest risk of all is not taking one.”
You do not need to worry; if you are a merchant selling internationally, your international merchant account provider must offer you a High-Risk Merchant Account for your business to safeguard you from fraud or peril.
An ideal international payment gateway provider will consider all the risks before customizing the merchant account.
Hosted and Non-Hosted Payment Gateways
Retailers are becoming more interested in hosted payment gateways owing to their straightforward payment setup procedures and reduced merchant liability. These components ensure that third-party payment service providers will oversee every step of the transaction process and provide enhanced data security. Hosted payment gateways also help organizations reduce fraud so they can focus on their core competencies.
Many online businesses prefer non-hosted payment gateways for their websites so that they may maintain complete control over the checkout process, including layout and design, and provide customers with a smooth buying experience. Retailers can enable customers to complete transactions by immediately entering their debit or credit card details on the checkout page by using APIs.
Key Features of an International Payment Gateway
It is not an easy task to select the Best International Payment Gateway for your business. You need to consider a number of things. We have listed the most crucial factors to consider before selecting a payment gateway to make it simple for you. Let’s have a glimpse.
Security, Fraud & Chargebacks Prevention System
The US ITRC’s report indicates that there has been a doubling in online fraud since the COVID-19 pandemic. Payment fraud is more common among companies that do business outside of their domestic markets than those that do business there. A LexisNexis survey says international retailers experience fraud 2.5 times more frequently.
The top international payment gateway must offer its merchants the most cutting-edge fraud protection tools, such as address verification, CVV checker, PCI DSS compliance, fraud scoring, geolocation tracking, 3D Security, multi-factor authentication, and other fraud protection features.
Chargeback prevention tools are classified into pre-transaction, post-transaction, and source detention. To avoid chargebacks, an international payment gateway must adhere to these measures.
Multiple Currency Support
Prices should ideally be shown in the local currency to avoid losing potential clients to internet retailers. According to a poll by Penton Research and E4X, 33% of customers left the website to look up exchange rates in their own currency but never came back to make a purchase.
Accepting regional currencies encourages customers to make larger purchases. Therefore, an ideal international payment gateway should have multi-currency support based on region.
Alternative Payment Methods
The preferred payment methods differ by state. It is dependent upon the nation’s banking system. In America, like in Europe, the use of credit or debit cards is significantly higher than the use of any other method of payment. However, a Statista analysis shows that digital wallets dominate credit cards and other payment options in Asia-Pacific. So a high risk payment gateway should accept a wide range of payment modes.
Multilingual Support
Another necessity for a customer-centric strategy is multilingual assistance for a worldwide business. It elevates customer loyalty and retention, putting you miles ahead of your competitors. It enhances the consumer experience, which contributes to building brand value.
The presentation of the checkout page in the local language offers a user-friendly and reliable environment for customers to buy more, so an ideal international payment gateway should have multilingual support dependent on geography.
Round-the-clock Customer Support
Round-the-clock Customer support is the cornerstone of a multinational company. Customer service should be provided in local and foreign languages, offering a simple and rapid resolution to any concerns.
Industry support
If you are an innovator, you must ensure that the global payment gateway you choose supports both your present industry and your prospective venture. Furthermore, be certain that the gateway provider can offer you a high-risk payment gateway if you are a high-risk merchant.
Carefully read your contract
Because most international high risk merchant account providers work with many processors, their rates and fees are not normally displayed online. Pay close attention to the charges you will incur and make sure you are aware of any additional expenses.
Conclusion
When a business chooses to expand its sales operations abroad, it makes a significant decision. More strategic planning is required than might initially appear for the procedure. One of the fundamental difficulties online retailers have is the choice of an international payment gateway. Here, we’ve covered a number of the International Payment Gateway’s key components. You now have an understanding of how to choose the best one and what the most crucial payment gateway attributes should be when selling worldwide.
We wish you luck.