By Brian Gaynor, European Chief Executive, BlueSnap
In my experience, finance and e-commerce leaders are almost always happy to talk about their booming international sales. Ask about the checkout experience in those markets, however, and the conversation tends to fall quiet. Yet, fundamentally, checkout is where international growth is won or lost. Attracting a customer to your new international website is one thing. Having them complete a purchase is another.
For years, selling internationally required little more than adding local currency at checkout and translating the website into alternate languages. Behind the scenes, payments often still routed back to the merchant’s home country for processing, regardless of the customer’s location. To the customer’s issuing bank, the transaction would appear foreign, making it more likely to be flagged or declined and, sometimes, subjecting either the customer or merchant to cross-border fees.
That process is increasingly hard to justify. If businesses want international customers to place repeat orders, they can no longer dismiss payments as a technical afterthought. Cross-border payment friction, once considered an unavoidable cost of business abroad, is now a competitive liability. Shoppers in Paris should find checkout just as easy as those in London or Toronto. And that means treating local acquiring as a strategic essential for international expansion.
The price of friction
Checkout friction has a tangible impact on both sides of the transaction. On their side, shoppers face unfamiliar currencies and high exchange rates; on the other, merchants face higher processing fees and lower authorisation rates. If a card is declined, a customer denied a purchase on the first attempt rarely returns for a second.
This revenue, lost at the last hurdle, has a high cost. According to the Baymard Institute, better checkout experiences alone could recover $260 billion in lost orders across the US and EU.
When margins are tight, and every new customer is costly to win, that money matters. Fast loads and painless returns are now assumed, not admired, and the same is becoming true of seamless cross-border payments. Local acquiring has become table stakes for international sellers. Whilst it won’t remove every challenge for international sales, it does eliminate one of the most preventable and costly challenges.
How local acquiring solves the problem
Local acquiring routes payments through banks in the customer’s country, rather than the merchant’s. A purchase made in France is processed as a European transaction. The benefits compound. Cross-border fees fall; issuing banks decline fewer transactions; and checkout feels native, boosting trust.
According to our data, offering payment in local currency lifts conversion rates by up to 12%. Layer in optimised payment routing, directing each transaction down the path most likely to succeed, and first-time approval rates climb by a further 3%.
Individually, these gains sound modest. But, multiplied across thousands of transactions a month, they can be the difference between a market worth entering and one that isn’t.
What separates the businesses getting checkout right
The companies succeeding aren’t necessarily those with the biggest payments teams. They are the ones that treat checkout as a core part of the product in every market, rather than a detail bolted on after expansion – and that necessitates a shift in how international growth is planned.
Payments infrastructure rarely enters boardroom conversations on going global. When setting international growth targets, CEOs rarely focus on local acquiring relationships, prioritising demand forecasting or logistics instead.
In practice, this means asking the same questions market by market. Are transactions processed locally where possible? Do we offer the currencies and payment methods that customers expect? Does our payments processor support local acquiring and settlement? And, finally, can we measure the revenue lost to declines and abandonment before it shows up in our international sales report?
The businesses which can answer those questions honestly are the best placed to turn international sales into international loyalty. As e-commerce continues to globalise, success will not only mean expanding into new markets but making every market feel local.