Organizations face inherent risks and challenges on the path to globalization, due in part to each country’s regulations, inflation rates, currency and currency exchange rates, language and cultural barriers, foreign politics and policies, and consumer behaviors and preferences.
With almost 200 countries participating in international business, worldwide commerce presents an opportunity for enormous organizational growth if these hurdles can be cleared. Several large enterprises have expanded well internationally (Apple, McDonalds, etc.) by following some key touchpoints.
Surprises at checkout can lead to high cart abandonment.
The last thing an online merchant wants is to have a successful purchase in progress, only for additional fees, unaccepted payment methods, or extra taxes to tempt the consumer to abandon the cart. With online shopping cart abandonment estimated to be around 69.8%, it is the responsibility of the merchants to be aware of foreign regulations and payment challenges that could potentially add costs and corrupt the customer experience.
Equally as important is to be forthcoming about this information. All taxes and fees which may be associated with purchasing internationally should be upfront, and merchants must consistently highlight what the entire cost of the product is going to be, even if this includes additional wording in the checkout. Furthermore, e-commerce merchants need to be clear about the payment methods they accept, as this can vary significantly from country to county.
Merchants need to start paying attention to what consumers want to pay with.
When it comes to localization in e-commerce, customizing payment options is essential. Established enterprises and e-commerce merchants alike should not approach payments with a one-size-fits-all mindset. For example, while Americans prefer to pay with credit and debit cards, Europeans favor bank transfers and digital wallets (such as PayPal), and Asian consumers gravitate to QR codes. Narrowing down the scope even further, demographics within those counties play a role.
Therefore, e-commerce merchants need to tailor their payment methods to what will work for their target consumers.
Data breaches are far too common and are only on the rise.
Recently, international enterprise giants such as Microsoft, Estee Lauder, and MGM Resorts suffered security issues. From accidentally exposing confidential customer data online (such as credit or debit card information, home or office addresses, birth dates, buying history, and more) to malware and hacking incidents, these events significantly harmed consumer trust and brand reputation for these businesses. Even more, cybercrime is a substantial financial liability as the cost of patching, compensating victims, and possible litigation leaves many companies unable to recover fully.
The good news is that there has been much investment from established enterprises to create solutions that cross-border e-commerce merchants entering the market can utilize. For example, innovative technology is allowing faster responses to suspicious activity to ensure that transactions remain secure. As e-commerce merchants now realize that they are at risk if they decide to hold sensitive data in-house, they are discovering new ways to safely store information that is susceptible to threats.
Global merchants must take a lot of things into consideration.
The established enterprises that have thrived worldwide do so because they understand their target audiences. They know that the key to success overseas is localization starting from a very high level, such as transparency and communication. It then goes down to payment preferences and choices, followed by assuring security and local compliance.
For global e-commerce merchants, this is a roadmap they can follow. For an e-commerce merchant to grow internationally, they need to identify what they want to accomplish, how local they want to be, what resources they have in-house, how to create the best experience and their KPIs.
This is where the right payments infrastructure partner can be of great value. By helping global merchants discover optimal ways of implementing payment methods, defining the best digital experiences based on preferences by the local consumers, and determining conversion metrics, they help merchants connect with more consumers, whether they’re 10 or 10,000 miles away.
Therese Hudak is the Head of Enterprise Account Management at PPRO