Navigating the deep waters of cross-border payments: What can merchants do to remain competitive

Why are online retailers under pressure to become increasingly global? Which consumer trends are influencing this? 

The events of the past two years have certainly shifted consumer and business behaviour. People spent more time at home so more goods are bought both online and across borders. Also, these huge advances in technology and business capabilities mean the whole world is more accessible. Retailers are, therefore, under pressure to be present in multiple markets to satisfy consumer demand and keep up with their competitors.

In fact, cross-border ecommerce is exploding, now making up almost 22% of total online shopping, according to Forrester. At Nuvei, we are laser-focused on specific verticals that all have tailwinds, inherent growth, and the propensity to operate globally. As such, the total addressable market (TAM) for each of these verticals continues to increase.

Why do international online retailers face additional complexity when it comes to cross-border payments? 

Payment preferences are incredibly local, with consumers expecting to see their preferred methods when they reach the checkout – Pix in Brazil, for example, and iDEAL in the Netherlands. By not offering them you risk losing customers and revenue opportunities. For every market a merchant wishes to penetrate, they have to integrate all the appropriate methods, as well as navigate the complex onboarding and compliance requirements, one by one. 

Consumers in different locations want to feel a sense of trust and familiarity through local payment methods and currencies. And of course, they also expect a seamless and frictionless shopping experience. Doing so in each market is incredibly complicated without a global payments partner. 

What should global merchants do to reduce this complexity? 

It takes a huge amount of time and budget to onboard and integrate each of these local payment methods — from research to testing, and implementation to platform integration. Instead, merchants should find a partner with a single integration, offering a plug-and-play payments platform. Choose one that offers the widest choice of payment options possible. At Nuvei, for example, we’re uniquely placed to offer our merchants over 500 APMs, 150 currencies, and even 40 cryptocurrencies – all through one integration. We immediately deliver to merchants the ability to offer any type of payment as well as all the local expertise in fraud management, UX integration, and regulatory compliance. This means that the headaches and roadblocks are removed. 

Flexibility and a technology-agnostic approach should also be baked into you and your payment partner’s proposition. Look for a provider that takes a consultative approach, as Nuvei does, so you get simplicity as well as bespoke advice that matches your strategy. 

With more globalisation, how should online merchants ensure they are compliant, operating securely without losing sales? 

Regulatory requirements vary from one region to another, so continual transaction monitoring and management must be central to your cross-border strategy. 

In Europe, the upgrade from PSD1 to PSD2 is happening as we speak. So, to ensure compliance while improving conversion, merchants could make sure their payments platform uses a smart transaction routing engine, one that uses data analytics to send transactions to the compliant pathway most likely to gain approval. In cases where a 3DS2 transaction encounters a soft decline – such as a technical failure or a purchase flagged because the issuer considers it unusual – a smart routing engine should automatically reprocess it, reducing transaction declines and lost conversions. 

This is just one example though; the requirements are always changing and the more international you are, the more there is to consider. So, choose a partner that prioritises keeping up to date with local compliance needs across the globe. Thus, with the burden removed, merchants don’t need to waste precious business resources staying on top of requirements in every single region as they expand. At Nuvei, our roots are in the most regulated and complex verticals, so we have unique expertise in compliance, privacy, and fraud management.

What do you see as the future of cross-border ecommerce, and how is Nuvei contributing towards this future? 

In the future, payments will shift from being a business facilitator to a business accelerator. As payment tech becomes seamlessly integrated into merchants’ interfaces, and platforms offer smarter transaction routing, fraud management, and fewer false declines, payments will be a significant contributor to the bottom line. Doing this across borders on a global scale, however, is extremely complex. It requires a vendor that has the footprint, the expertise, and the flexibility to provide bespoke solutions that meet merchants’ exact business needs. And this is what we do best. Our global payment platform and its huge range of local payment methods are ideal for merchants that want a hyper-local presence. Also, we’re experts in local markets, from all the necessary risk processes and compliance practices to attracting and retaining customers. 

From an innovation perspective, we launched card issuing in Europe, a new line of business that expands our product offering and capabilities to our customers in the region, presenting exciting market opportunities for cross-border growth. We made the investments to continue scaling our technology, to offer no latency, 99.9% uptime, and burstable capacity to support our customers’ expansion efforts. 

Our three new acquisitions, meanwhile, have significantly expanded our capabilities for merchants. Simplex offers bespoke fraud prevention and risk management tools for the purchase of cryptocurrencies with fiat currencies as well as card issuing solutions. Paymentez increases our total addressable market by expanding and strengthening our presence in Latin America. Mazooma enhances our portfolio of North American payment options with instant Account-to-Account payments for payins and payouts. 

As a business, we now have tremendous optionality, we want to remain entrepreneurial and continue to follow our customers into the cross-border regions that are most important to them.

This interview was first published in our Cross-Border Payments and Ecommerce Report 2021–2022, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally.

About Neil Erlick

Neil Erlick is the Chief Corporate Development Officer at Nuvei, where he oversees strategic business development in key industry verticals, corporate partnerships, as well as enhancing the company’s overall growth in the US-regulated gaming market. Neil spent nearly two decades in senior leadership roles at Paysafe Group, most recently having served as Executive Vice President of Business Development. Supporting global gaming operators, he helped grow the company from a startup to a multibillion-dollar enterprise.

About Nuvei

We are Nuvei (Nasdaq: NVEI) (TSX: NVEI), the payment technology partner of thriving brands. We provide the intelligence and technology businesses need to succeed locally and globally, through one integration – propelling them further, faster. Uniting payment consulting and payment technology, we help businesses remove payment barriers, optimise operating costs, and increase acceptance rates both locally and globally.