Doing business globally can certainly help your organization become more profitable, but it can be challenging to implement the elements needed to reach the global market. Having a good payment processing company can assist your business in making sure you have the tools required to meet all the risks you might face. Here are a few of the considerations when you are making cross-border transactions:
- Political risks – The buyer’s and the seller’s country impacts transactions across borders. There might be legal restrictions from shipping certain goods into the country or your shipment could be delayed in customs. A government coup could affect delivery. There might even be restrictions on trade, placed on your business by your home country. Remember the Cuban cigar embargo?
- Fluctuating foreign exchange rates – Although most countries are fairly stable in today’s market, there could be an incident which would affect exchange rates. In some countries, the exchange rate can move up and down throughout the day. Another problem is when the exchange rate changes from the time of transaction to the time of delivery. You may have to deal with a lower value of goods if there is a long delay.
- Payment risks – When shipping products overseas, the time involved makes it riskier that the customer will not want to wait. You face a higher risk of chargebacks without getting your product back. Your business has to manage this risk.
- Language barrier – Your business might have clear policies written in English, but there is no guarantee your international customers can read and understand this information. You have to make sure your policies match the language of the customer and the rules of the country to ensure your “contract” with the customer will be honored.
- Taxes – Import and export taxes can be quite costly. You have to know what type of fees will be added to your shipment, if any, at the destination.
- Time – Your business may also have extra paperwork to ship product overseas. Does someone in the shipping department have the extra time to deal with additional work or will you have to hire someone specifically?
Avoiding Problems When Accepting International Payments
Resolving problems can be challenging when dealing with international customers. Having the right payment processing company is one thing your business can do to assist in making sure customer transactions are processed properly. You will need to do your homework and research to make sure you are meeting the laws and currency rate fluctuations of the country in which you are doing business.
Have clear payment terms and considerations. How will legal disputes be addressed? What type of insurance coverage is available for the product? What happens when an error by the customer is made? You may have to address certain risks for your product, if it is perishable, for example.
Building trust with your customers is one key element of doing business across borders. Your good relationship and upfront policies will go a long way in making sure your customers are happy. This will save you time and money in the long-term, which is how your business will grow.