The ability to reach clients and do business around the world is no longer an option for most organizations, and after recent challenges with the global supply chain, 60% of American and European companies are looking for ways to diversify their networks.
This often means adapting to new suppliers and vendors across multiple geographic borders. If you’re struggling to incorporate these practices, it may be time to consider a global payment processing strategy.
Global payment processors don't just make it easier to send and receive global payments. The right provider can also simplify your business operations by adjusting for exchange rates and keeping your data at your fingertips. Here's everything you need to know about global payment processing.
What is global payment processing?
Global payment processing refers to transferring money to a vendor, supplier, employee, or other business partner whose bank account is set up outside the United States.
Historically, global payment processing has been a cumbersome process over international banking networks, often fraught with delays and compounded transfer fees. This is to say nothing of the currency conversion fees, usage costs, and other expenses associated with global payment methods.
That's why global payment processors have become more popular. These global processing systems have made international payments easier and more cost-effective for small businesses.
Global payment technology empowers merchants to:
- Eliminate the excessive fees associated with the international payment process
- Enhance their security regarding their bank account information or transaction details
- Detect fraud to protect funds or internal data
- Streamline their cross-border payments
What is a global payment processor?
A global payment processor is a specialized transfer provider that allows two customers or businesses to send funds across international borders.
For example, a business owner might use one of these global payment systems to send money to a vendor. A global payments processor will, therefore, serve as an intermediary and facilitate the transfer.
How does global payment processing work?
Global payment services require a multi-step process. To begin, a payment processing partner will serve as an intermediary between two businesses. In that respect, it works like any other domestic payment processing platform: the processor receives the transaction details and then relays the information to the issuing/receiving bank.
The major difference is that the issuing/receiving bank account will be in a different country than the merchant or customer account, which demands another conversion process. For starters, both the sending and receiving businesses must be legally recognized entities. Both companies have to comply with the demands of the legal standards of their respective countries.
The payment processor will then facilitate overseas payments. This can result in transfer fees, the exact amount of which depends on the global payment processor. During the transfer, money is sent to a local bank account before being processed for payment. The processor can then deliver the money to the recipient's bank account.
Without a global payment processing platform, companies will be responsible for calculating the sums based on the evolving exchange rate, which makes it tricky when dealing with companies that use different currencies. Fortunately, the global payment gateway will calculate the sum based on the exchange rate, meaning recipients will always receive the exact purchase price.
Tips for processing global payments
How can you craft a better global payment strategy? Start by focusing on the following components.
Focus on localized payment methods
When it comes to business, you know the importance of understanding your target market. The same principle applies to your global payment process. Your international supplier network should have access to payment options that match their local preferences. Otherwise, you could miss out on international revenue because your business network doesn’t understand the process.
Localized payment methods ensure that you understand things like client preferences regarding:
- Payment method
Adapting these elements to the preferences of international businesses can empower your company to connect with a broader supplier network and strengthen your supply chain.
Some payment processing software can automatically detect the location of website visitors and adjust the language and currencies accordingly. But at the very least, you can use a dropdown menu to allow visitors to choose their preferred language and currency, which can be a valuable feature during the supplier onboarding process.
Find the right global payment partner
You'll need a payment provider that offers merchant services that align with your business goals and values. Ultimately, your chosen platform should also provide seamless global payments integration and robust features to process international payments conveniently and easily.
The best global payment processors are designed for a broad international payment network. This allows you to process payments from a diverse range of countries. But when you screen global payment processors, consider factors such as:
- Track record
- Pricing and transaction fees
- Compliance and fraud protection
- Centralized dashboard
Additionally, you should search for a global payment solution that grows with your business. That way, you'll have the tools in place even as your company expands.
Eliminate friction in the checkout process
An unclear or disruptive payment process can prompt vendors to sever the relationship or decline potential contracts and bids. You can help eliminate these points of friction by ensuring that your checkout page:
- Looks great on multiple web browsers and mobile devices
- Suggests alternative payment methods when a user’s card is declined
- Offers integrated payments with Visa Account Updater or Mastercard Automatic Billing
- Saves credit or debit card information for future sales
If you're not clear on the best practices for your international suppliers, you might use an A/B test page to determine what layout, format, or features result in the most consistent sales results. And if your web content doesn't adapt to every mobile device, you can work with your marketing team to make sure you use responsive web design.
Diversify your payment options
Payment preferences vary depending on what part of the world your sales are coming from. That's why it’s helpful to offer your vendors and business clients a variety of payment options. These payment options can be listed on your invoices, making your expectations clear when you enter into a relationship with an overseas supplier.
For instance, credit and debit card payments remain popular across the globe. However, due to their security protocols, many businesses are pivoting to contactless payments and digital wallets for global payment methods.
A global payment processing platform will allow you to offer multiple payment options for your international businesses. With more options, your worldwide business partners will be more likely to complete their purchases, especially if you accept their preferred payment method.
The right global payment processing platform will allow you to offer multiple options. It can even give you data on your customers' preferences.
Gain insights from your global payment processor
The very best international payment processors will offer a fully integrated solution with access to up-to-date information on your sales history, customer preferences, and more. You can use this data for your accounting records and for adapting your international sales strategies to the needs of your clients.
It'll also manage your most valuable data. And since these responsibilities will be handled through a centralized platform, this also saves you and your employees time. As a result, you'll attain greater control over your entire payment processing method and get closer to mastering your international operations.
What to look for in a global payment solution
The right global payment processors can be critical to your payment strategy. But how can you compare the features of top providers to ensure you're getting the best deal with the best options? Here are a few things to look for in a global payment processor.
The right global payment processors can be critical to your payment strategy. But how can you compare the features of top providers to ensure you're getting the best deal with the best options? Here are a few things to look for in a global payment processor:
- Multiple payment options
- Security and fraud prevention tools
- Integrations with accounting and banking software
- Enterprise-level support for growing companies
- Automation to assist with currency conversions
- Availability in your target countries
For instance, make sure your provider offers global credit card processing solutions alongside other payment options. This allows you to reach the broadest possible supply chain network. And by pursuing enterprise-level solutions, you'll partner with a provider that can grow with you as you scale.
Make global payments in local currencies with BILL
BILL offers a simple, comprehensive solution for processing international payments. Manage global payments in over 130 countries on the same platform you use to handle domestic payments. BILL automatically does the math, so you never have to worry about padding a payment to account for fluctuations in the exchange rate.
Also, gain access to intuitive tools to analyze business data and integrate with popular business software products such as Intuit QuickBooks, Sage Intacct, Oracle NetSuite, and more. The end result? More efficiency, visibility, and control over your financial operations.
Learn more about international payments from BILL.