The challenges of international payments for marketplaces
The heterogeneity of payment methods
Each country has its own preferences regarding payment, and it is essential to offer a payment mix adapted to local expectations to maximise the chances of conversion. According to WorldPay, 77% of consumers prefer to use local payment methods when available. For example, in the Netherlands, iDeal is the most widely used online payment method, while in Portugal, MB Way is a very popular solution. In Europe, PayPal remains a key player, but it is important to consider the rise of digital wallets such as Apple Pay and Google Pay. Ignoring these local specificities could lead shopping cart abandonment because users prefer payment methods they know and trust.
Each market has its own legal framework, and marketplaces must ensure that they comply with the various local laws to avoid sanctions. This includes compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations and data protection directives, such as the RGPD in Europe. In addition, specific obligations such as PSD2 and PSD3 (Payment Services Directive) in Europe impose high payment security and authentication standards, requiring tools such as strong authentication (SCA).
Security and the risk of fraud
Each new country brings its vulnerabilities, often with different security regulations. In 2022, online fraud will cost 41 billion dollars worldwide, and could rise to 48 billion by 2024 (Source: Juniper Research). To prevent these risks, marketplaces must implement robust fraud detection and prevention systems, such as tools for monitoring suspicious transactions, strong user authentication, among others. Working with a payment service provider with expertise in securing payments is essential to protect users' funds and data while maintaining a smooth payment experience.
Managing international payments introduces a great deal of operational complexity for marketplaces, particularly regarding bank reconciliation. Each cross-border transaction involves different time zones and banking systems, which complicates the management and monitoring of financial flows. Bank reconciliation, i.e. the reconciliation between payments received and sales recorded, becomes a longer and more error-prone process. To overcome these obstacles, having the right resources and skills in-house is essential or relying on a payment service provider capable of automating this process to efficiently monitor financial flows and avoid accounting discrepancies efficiently is essential.
User experience and abandonment rates
The user experience at checkout is a key factor in the success of a marketplace. A payment process that is too complex or that does not offer local payment methods can lead to a high cart basket abandonment rate. Customers expect a smooth, fast, and secure experience, regardless of their country of origin. If local payment methods are not supported or there is friction during checkout, there is a risk that they will leave the site before completing their purchase. To reduce these abandonments, it is essential to offer an intuitive payment interface adapted to each market while guaranteeing multilingual navigation and responsive customer support.