Interview

Reducing costs in cross-border payments: Interview with BlueSnap

Wednesday 2 March 2022 08:16 CET | Editor: Andra Constantinovici | Interview

Ralph Dangelmaier, CEO of BlueSnap, reveals the importance of authorisation rates and reducing costs in cross-border payments

Cross-border commerce can be a great revenue stream for businesses, but usually, new barriers emerge as well. What are the new challenges that businesses must meet when selling abroad? 

It’s estimated there will be USD 250 trillion in total cross-border payments by 2027, according to the Bank of England. You don’t want to miss the opportunity to reach global customers, but you need to be aware of how best to increase your revenue while managing your costs. Whether you’re selling internationally or would like to expand your customer base, keep these four things in mind: reducing checkout abandonment; tracking and improving your authorisation rates; avoiding unnecessary fees; reducing your operational and technical debt.

What are the main reasons for checkout abandonment? 

Sometimes people make it all the way to the checkout, but they don’t complete the transaction. This may happen because they feel the process is too complicated, or their local language, currency, and preferred payment method are missing. 

To explain the challenge further, let’s say you are a company located in the US and have a customer located in France looking to make a purchase. There is a higher chance they will complete that transaction if their checkout experience is presented in the French language and one of the payment options is in Euros. According to our research, 56% of companies are unable to offer customers their preferred global payment types. 

What are the best ways for merchants to reduce their payment fees? 

For businesses that operate in more than one country, local acquiring is critical. As businesses depend more on international sales, the benefits of local acquiring grow exponentially; when your business is processing hundreds of thousands of transactions a month, the up to 2% in cross-border fees adds up quickly. 

Local acquiring increases the number of approved foreign transactions. International transactions tend to have a higher fraud risk, and they’re more likely to be flagged or outright denied by a bank. Routing your transactions through a local bank helps to avoid that issue in many situations and improve your authorisation rate. By combining local acquiring and local payment types and currencies, you can increase your sales while avoiding additional fees. 

Local acquiring can be a huge benefit to your company, but attempting to build a local acquiring solution from scratch can cause you as many problems as it solves. However, working with the right payments processing partner can get you all the benefits of local acquiring without the risks of managing the process and the relationships yourself.

Along with providing the best payment options and methods, what are other best practices for securing payment acceptance through localisation? 

First, businesses should focus on matching, which means that they should try and keep a transaction as local as possible. Companies need to find a payment partner that has multiple banking relationships in multiple countries/regions – and a routing engine that sends the transaction to the right bank. This way, they can process their global payments as if they were local anywhere they have a legal entity. 

Improving your authorisation rates alone can lead to a 12% increase in sales. By choosing the right payment partner that can help you process transactions locally, you can increase your authorisation rates if they can help you: 

  • match the issuing bank location with an acquiring bank in the same location; 

  • match the issuing bank with the acquiring bank; 

  • match the issuing currency to the acquiring currency. 

Additionally, by partnering with a payment provider that has multiple banking relationships, you can improve your authorisations with the ability to failover any declined transactions to another bank in that region. This can help companies recapture up to another 5% in sales. 

Refund fraud and chargebacks fraud are some of the highest risks when selling across borders that could heavily affect the cost of transactions. How can these risks be proactively prevented? 

When a bank sees a transaction from either a foreign country or currency, they are more likely to reject it because it is perceived to be riskier. Companies can mitigate this perceived risk through the local acquiring steps we just talked about. But there is more to consider when it comes to authentication, especially with the upgraded 3-D Secure (3DS 2.x). Here are the most most recent features of 3DS 2.x: 
  • fills several functionality gaps, including mobile support; 

  • allows for a more seamless integration with businesses’ existing ecommerce solutions; 

  • offers significant improvements to the user experience, including frictionless authentication; 

  • allows card issuers to send one-time security codes to cardholders via email, SMS, or other, more convenient channels. Biometrics like fingerprint scanning and facial recognition are now supported as well, allowing banks to validate transactions with minimum disruption to the shopper’s workflow. 

Businesses that implement 3-D Secure 2.x can not only meet the new compliance requirements, but they can also stop fraud, eliminate their liability for chargebacks related to authenticated transactions, and reduce their risk of cart abandonment. 

What is BlueSnap’s solution for helping businesses reduce costs and increase authorisation rates? 

Our mission at BlueSnap is to help businesses achieve global success by increasing sales and reducing costs. Our All-In-One Payment Platform can increase your sales by improving your international authorisation rates and reducing checkout abandonment. With BlueSnap’s Intelligent Payment Routing, transactions are automatically routed to the bank most likely to approve the transaction based on several factors, minimising declines and maximising revenue gains. Moreover, with BlueSnap, you’ll be able to take advantage of 29 languages, 100+ local currencies, and 110+ payment methods so you can sell in over 200 geographies. Payments processed from an issuing bank located in a different country than your acquiring bank can incur up to an additional 2% in fees on top of the interchange fees you’re already paying. 

To reduce such fees, BlueSnap offers local acquiring in 47 countries and a network of banks, resulting in savings that will be directly beneficial to your business. Lastly, technical debt is one of the most challenging factors organisations are facing today. It’s estimated that 25% of development time is spent on technical debt, resulting in downtime and revenue loss. If you’re working with multiple payment processors to support your international sales, you’re spending unnecessary time and resources to integrate and maintain multiple platforms. With BlueSnap, you get a single built-in integration, with one account, unified reporting, and everything else you need to sell globally.


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 Ralph Dangelmaier

Ralph Dangelmaier is the CEO of BlueSnap. With over 30 years of experience in the payments industry, Dangelmaier is at the forefront of ecommerce innovation, using his expert knowledge to grow public and private companies via innovative payment solutions. In addition to landing BlueSnap on Inc.’s annual guide to the 5,000 fastest-growing privately held companies in the US for four years in a row, Dangelmaier is a sought-after public speaker, broadcast commentator, and thought leader


About BlueSnap

BlueSnap helps businesses accept payments globally. Our All-In-One Payment Platform is designed to increase sales and reduce costs for all businesses accepting payments. With one integration and contract, businesses can sell in 200+ geographies with access to local acquiring in 47 countries, 110+ currencies, and 100+ global payment types to help businesses grow.


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Keywords: BlueSnap, cross-border payments, chargebacks, ecommerce, authorisation rate, biometrics
Categories: Payments & Commerce
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Countries: World
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Payments & Commerce






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