For businesses that operate in more than one country, local acquiring is critical. Local acquiring, or processing cross-border payments as if they were local, has multiple benefits. As businesses grow in size and depend more on international sales, the benefits of local acquiring grow exponentially; when your business is processing hundreds of thousands of transactions a month, even a 1% to 2% fee on some of those transactions adds up quickly.
The Benefits of Local Acquiring
Local acquiring increases the number of transactions your company can successfully process in a few ways.
- 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 authorization rate.
- With local acquiring in place, you can avoid cross-border fees: This is a hot topic as the timing nears for some of the card brands to charge higher rates for transactions between the UK and EU post-Brexit. Smart businesses are already prepared to begin routing their transactions through local banks to avoid those higher fees. Otherwise, those are funds that eat into your profits or you have to pass them on to customers.
- Increase your sales conversions and avoid FX fees: By combining local acquiring and local payment types and currencies, you can increase your sales while avoiding additional fees. This will allow for your customers to pay in the same currencies the banks use to pay you out, allowing you and your customers to avoid foreign exchange fees.
Local acquiring can obviously be a huge benefit to your company, but going it on your own and 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.
How to Choose the Right Global Partner
Not all payments providers are created equal, especially when it comes to local acquiring. Most importantly, your online payments provider needs to have pre-existing relationships with high-quality banks in the countries you operate in — or hope to be operating in soon. If they are only working with small, local banks in those areas, you won’t experience local acquiring’s full benefits. Finding a payments provider that has local acquiring capabilities and relationships with large banks in the right regions is crucial.
Your provider should also have redundancies built into their local acquiring capabilities. If there is an issue with one bank and you are suddenly experiencing a wave of declined transactions, for example, your payments provider needs to be able to switch gears and begin routing transactions through another bank quickly.
Even if your business could go out and successfully build these relationships on your own, negotiating your terms with each bank, finding a payment solution to handle transactions in each country, and developing the processes and upkeep to maintain the technologies and individual relationships for each country would eat up so much of your time and resources that you might start to wonder why you even bothered with local acquiring in the first place. Top-tier payments providers simplify setting up local acquiring by connecting you to acquiring banks in the countries you need.
Last but definitely not least, the right payments provider will have fraud protection and compliance top of mind and make them simple for you. As we mentioned, cross-border transactions have a higher chance of fraud, and as you move into different countries, you will be held accountable for meeting certain data protection standards. Additionally, different regions experience different types of scams, and your payments providers’ fraud detections and remediation capabilities need to be robust enough to handle anything you might encounter doing business in a new country.
Local Acquiring: A Better Way with BlueSnap
BlueSnap’s local acquiring capabilities are second to none, and our network of banks makes local acquiring simple for businesses. While we can process global payments around the world, we offer local acquiring in more than 47 countries and have most recently added India to the list.
We have relationships with the best banks for local acquiring in all the countries we operate in, redundancy for failover, and fraud and compliance solutions built into our All-in-One Payment Platform. We also offer 100+ shopper and payout currencies (18 like-for-like) and over 110 global payment types. Our entire approach to cross-border payments is designed to help you improve your shopper conversions, increase your authorization rates and reduce your costs.
After all, local acquiring is crucial for growing businesses operating in multiple countries and regions, but obtaining it doesn’t have to be tedious and difficult. BlueSnap makes it easy for you and your customers to enjoy the benefits of local acquiring without taking on the extra work yourself
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This post was originally published by BlueSnap.
