International Payments Options Increase Sales

Merchants who offer multiple payment options increase sales and revenues. According to industry research, 60% of American and Canadian internet merchants accept orders from outside the U.S. and Canada. For these merchants, international sales accounts for an average 18% of their orders. But, less than 30% of them offer the payment options preferred by international buyers. Merchants need to give customers ways to pay that are popular in the region where the buyer lives. For example, Germany is the EU’s second’s largest online shopping market. Yet, only 26% of Germans pay by credit card. In China, 95% of internet payments are paid with Chinese bank debit cards.

In the online payment world, transactions can be categorized as either “pull” or “push”. With a “pull” transaction, such as a credit card, the consumer is paying with a line of credit or pre-funded account. “Push” transactions, on the other hand, are made by initiating the transaction from the source of funds such as the consumer’s internet banking account.

Common international payment methods include:

• Internet Banking works similar to online bill payment. The buyer sets up the merchant as a payee on their online banking website and transfers the funds to the merchant. Transfer of money takes 2–5 business days which means the merchant must wait to ship the product. The delayed payment is offset by elimination of liability of chargebacks for the merchant.

• Instant Bank Deposits are also known as international bank transfers. Consumers log onto their bank site directly from the merchant site and a preauthorization determines if there are sufficient funds available prior to processing the actual transaction. Funds are often approved immediately, although clearing still takes 2–5 days.

• Electronic Funds Transfers – EFT, also known as electronic checks or echecks, work similar to a credit card. At checkout the consumer enters bank numbers rather than credit card numbers. EFT transactions take 1-3 business days to clear.