By: 26 March 2024

Svetlio Todorov, managing director at emerchantpay, explores what merchants need to ensure a seamless expansion journey

Svetlio Todorov on how to expand payments into new markets

Entering new markets can be a challenging move—it takes a lot of resources, time and investment. However, with estimations showing that by 2025 the global consuming class will grow to 4.2bn people, can you afford to fall behind?

Facilitate cross-border transactions with popular payment methods 

Retail is no longer restricted by geographic borders. Tapping into the cross-border market presents a huge growth opportunity for retailers to access billions of potential new customers. With the value of cross-border ecommerce expected to exceed $3.3trn in 2028, from $1.6trn in 2023, merchants need to ensure that they have the right local market knowledge and expertise to penetrate their desired region successfully. 

Added to this, merchants must offer a combination of cards and global and local payment methods to reach a broader audience and cater to local market preferences. As well as other methods, ewallets are amongst the most popular payment methods on a global level, allowing consumers to complete transactions in their currency.  

Make sure you offer the preferred payment methods of the country you’re targeting to maximise your chances of success.  

Unlock conversions with local payment methods 

Most detrimental to cart abandonment is search capability. Once on your website, customers will leave your site if they can’t find what they were looking for. This can include finding their preferred payment method. Online shopping carts are abandoned 70.19% of the time, which may happen if an online store doesn’t have multiple payment options.  

Consumers in each region have their unique preferences. Picking the right payment method for each country is crucial. For example, to stand a chance of being successful in Brazil, a merchant has to offer Pix as a payment method.  

Therefore, make sure you offer a payment method that is known and trusted by your target audience to see improved conversions. 

Conquer cross-border transactions by overcoming common payment challenges 

Every new market you move into will have its local legislation and sources of friction can be attributed to the disparity in legislation and standards between countries and regions.  

This can cause two issues. 

First, high fees. Transactions can incur high fees at many points during the process of a cross-border transaction, and they tend to be carefully concealed. For example, banks often charge a cross-border fee or even a transaction fee just to process a transaction. This fee may also vary depending on the desired currency of each transaction.  

Second, settlement issues. Consumers making domestic payments in the UK now expect transactions to be made in a matter of seconds or minutes, although card payments may take a little longer. Cross-border payments, however, can take days to be settled due to the necessary routing required through banks and third-party providers in different time zones. 

There’s a lot to think about when entering new markets but by considering local legislation and a combination of preferred payment methods, merchants can get it right and the benefits will be rewarding.  

Don’t ruin your chances at expansion before you’ve even started—do your due diligence before targeting markets outside of your own country’s borders.

Image: emerchantpay