By Sam Ranieri, Founder & Chief Executive Officer, Reach

In a marketplace where any product ever desired is available with just a few clicks, ecommerce has established dominance over the global sales landscape. In a study by Adobe’s Digital Economy Index, it was revealed that global ecommerce sales will hit $4.2 trillion by the end of 2021.

Despite the global upheaval of the past 18 months, cross-border ecommerce is actually growing at twice the rate of domestic ecommerce. Consumers are leveraging the ease and freedom that online shopping provides to purchase from localities around the globe; whether it’s exquisite wines ordered directly from a French vineyard, or the latest gadgets picked up direct from retailers in China, the global ecommerce market is offering a bounty of opportunities for businesses who are prepared to look beyond their borders for customers.

Businesses that wish to access this worldwide customer base need to be aware of the new external factors they will face once they begin selling across the planet. Unlike domestic markets, there are a wealth of complications ready to trip up any brand unprepared for expansion.

For any brand that is stepping onto the world stage for the first time, there is a simple mantra to remember; go global – but stay local.

Establishing localized processes provides real competitive advantages

In an online marketplace targeted by potential fraudsters, ensuring consumers feel comfortable with who they’re purchasing from is critical to prevent cart abandonments and lost sales. The statistics prove it. Around 70% of customers prefer prices to be displayed in their local currency, and 30% would leave a retailer’s site if it wasn’t available. Up to half of consumers would look for another brand to shop with if their favored payment method wasn’t available. This is a potentially devastating loss of business that could make or break a new expansion.

Offering localized functionalities in every region that you operate is now more than a simple luxury to enhance the customer experience; it’s a necessity for any brand that wants to compete on the global stage. Seamless payment experiences, including localized payment methods and optimal currency conversions, reduce friction for consumers, inspire trust and develop brand loyalty.

Many businesses are hesitant to fully embrace localization, fearing the confusing and complex regulatory and logistical challenges that can emerge when trying to operate at a local level in multiple regions. Common worries include potentially high currency conversion fees, a lack of market knowledge surrounding popular payment methods, and inexperience in dealing with regulations of new markets. These factors are commonly cited as the reasons for opting to work with a global Payment Service Provider (PSP) that offers access to currency conversion, local processing and local payment method optimization.

While many of the major PSPs can offer numerous localization services, brands are actually unable to access the benefits of localized processing without an ‘in-country’ operation in the regions where they wish to sell. Businesses will still need to deal with a number of other challenges present in cross-border commerce operations, including tackling the myriad complex regulatory requirements, tax structures and local market restrictions, further enhancing the difficulties that they face just to open up access to these new markets.

The pain points don’t recede even when a brand is up and running in a new locality. Day-to-day management of both currencies and pricing strategy requires in-depth local knowledge and a keen eye on stress factors in the local economy; two things that are often in short supply for smaller brands looking to sell on the global stage. There is a mountain of data to analyze and decipher when operating in just one foreign region, let alone when expanding across multiple localities. These factors often result in the same outcome; brands simply decide it’s not worth the cost, time, and hassle to operate locally, with many opting to process transactions cross-border and more simply giving up on international expansions all together.

Developing a cost-effective localization strategy

While the many challenges present for businesses that are looking to operate globally can frighten some brands into receding from the international marketplace, there are ways to ensure a cost-effective localization solution. For many smaller merchants, effective global commerce can be achieved by opting to work with a Merchant of Record (MOR) provider, rather than simply partnering with a Payment Service Provider.

MORs offer the same access to multiple currencies and payment methods as PSPs, with the added benefit of specializing in localized operations. These innovative commerce enablers utilize a network of localized entities, allowing for brands to localize payment processing while also accessing the best available wholesale FX rates.

Brands also benefit from the in-depth local knowledge and market expertise of MOR providers who can help to develop dynamic local pricing strategies based on regional consumer patterns, as well as ensure businesses remain compliant with local regulations. By choosing the right provider, businesses can eliminate much of the workload that comes with international operations, allowing them to focus on what they do best – grow their business and serve their customers.

For any brand looking to make their first foray into an international market, the advantages of working with an MOR provider are clear to see. Businesses can attain higher conversion rates, simplified and seamless customer transaction pathways and payment experiences, and lower overheads. Backed by the expert support of an MOR provider, brands are ready to conquer any locality they step into – the sky is truly the limit.