As the world faces an escalating health pandemic, the message has never been clearer for businesses to make the transition to selling online – now.
Moving to eCommerce allows retailers to overcome the barriers to conducting international business and capitalising on untapped revenue. Amongst other contributors, identifying a single payment provider with a truly global core offering is key.
The Current State of Payment Vendors in Europe
The European payments landscape has become increasingly commoditised in recent years. And this commoditisation has resulted in a Dutch auction where transactional fees are squashed, and profits eroded for all players in the payment processing value chain. For merchants, this means rigid pricing with little or no scope for negotiation across providers.
The structure of the payments market is also changing. With the acceleration of eCommerce, more merchants are looking for cross-border payment processing to support business growth. Historically, the largest payment providers have focused heavily on their respective local markets, leaving merchants to partner with multiple providers across the various regions, or worse, deploying many instances of the same provider into regions where their offering does not reflect customers’ needs.
In a market where pricing is at parity and solutions are largely domestic, how do merchants scale efficiently and boost revenue across the board in their efforts to sell globally? The key is consolidation.
Payment Vendor Consolidation
Consolidation across the domestic payments landscape is nothing new. When the first API-driven payment solutions emerged around 2010, they emphasized consolidating the traditional payment gateway with a single, local processing bank or acquirer that communicated with the customer’s issuing bank via the various card schemes. Merchants adopted these new solutions in droves, revolutionising payment cultures across the globe.
But the solutions were domestic, providing local payment types and currencies to local merchants with local customers, showing little consideration for international customer requirements. This model actively discouraged merchants from operating internationally as the processing of cross-border transaction with a domestic acquiring bank incurred higher fees and lower authorisation rates.
The only solution for merchants that chose to sell internationally was to partner with a domestic provider in each and every region in which they operated. This meant managing multiple relationships, contracts, integrations, fees, settlements and reconciliations. It was costly to deploy and costly to maintain, requiring manual intervention and a drain on vital merchant resources.
A Better Way: Payment Consolidation Today
Now, a decade later, the time has come to consolidate again. But this time it’s not just about consolidating the payment gateway and single processing bank — instead, merchants should find a solution that consolidates multiple global processing banks into a single integration.
This offers a number of benefits for merchants, including multi-currency processing and settlement, global payment types and local languages to appeal to customers, wherever they may be. This allows merchants to process cross-border transactions as if they were local, ensuring fees are competitive and authorisation rates are optimised, and affords them a single, global look at how their business is doing.
The best part is that with a single provider, merchants can consolidate the many, often redundant integrations they have been using. For businesses operating internationally, this is the new global standard of payment processing.