Devising International Payments for Cross-Border Commerce
Selling internationally can be a thrill and a hassle as one needs to process international payments efficiently. The good news is that e-commerce sellers do have loads of options to make global sales easy enough for buyers and sellers.
Do US Merchants Accept Payments from Abroad?
In most cases, they do not accept international payments since the processing fees are high enough with huge risk of fraud and chargebacks. For working with customers in other countries, one would have to set up an account for those orders specifically.
International Merchant Accounts give owners dealing with cross-border commerce with multiple solutions meant for small businesses. These accounts have the ability to accept money and process varied payments automatically. They also feature fraud prevention and other attributes. These accounts also offer alternatives to payment aggregators like PayPal, and even present buyers a view of an established business along with currency exchange rates as part of fees.
Once you’ve opted for international merchant account for allowing international transactions, here are some things you need to do
- One needs to pay set-up fee to obtain processing equipment along with relevant software.
- After installing the software, and set account information, link the account with business bank account.
- The money received through the merchant account will be converted to U.S. dollars and transferred to bank account.
Instructions to link international payment service with marketplace
To link the payment service with the storefront, follow the rules and create your checkout process. Here are some payment aggregators and services that would aid cross-border ecommerce and international payments.
Being the most popular payment processor for online sales, PayPal now operates in a staggering 190 international markets and even accepts payment in 24 currencies without one needing a merchant account. Transaction fees are mostly lower than the fees levied by banks, most transactions are also swift and secure. It can be set up with an email account and a credit card only and there are several free tools for shipping and tracking reports.
One does get charged per transaction, withdrawals and currency conversions and one can set out adequate product prices for including those fees.
Set pricing for international customers in relevant currencies that are available for you to accept and the money can get transferred to the local bank account within a couple of days. Consider a dedicated merchant account if there are consistent transactions along with a dedicated chargeback department for the services.
Payment comes in default currency through PayPal based on account preferences. One can convert money at the standard rate to account for any wayward currency fluctuations. PayPal monitors foreign exchange rates and adds its own fee of 2.5 percent to the transaction especially when funds are moved from PayPal to bank account.
- Individual credit card firms
One can work directly with merchant accounts including the popular Visa, MasterCard, and the like. But these provide limited international buyers’ options and thus limit sales.
- International money orders
Your customer from another country can purchase money orders from their bank, and are mostly considered secure. Fees are minimal, but payment process takes up 8-10 days. Also these international money orders are liable to frauds!
- International wire transfers
If one has forged a relationship with an international customer, international wire transfers can be swift although expensive at $35 – $60 per transaction.
- Google Wallet
This wallet is available in limited countries and the UI is uncluttered and boasts of a good online presence, and many cross-border commerce organizations have started using it.
- Telegraphic Transfers between banks
These transfers have been used for several decades and now they are losing importance owing to convenient payment options.
- Personal check
Major marketplaces discourage use of personal checks owing to huge chances of fraud. One can even consider the checks on a case-by-case basis if you are the prime decision-maker and comfortable with varied taxes, currency exchange and ancillary fees.
Payment terms and methods are few and far between that actually work in an online marketplace. Check out the best mode of payment for your cross border commerce strategy although do encourage every channel for hassle-free payment for customers.