Choosing the Right Payment Methods for Your Global Customers

An important thing marketers need to keep in mind is the shopper habits of the country they are looking to sell into.

How do customers like to pay for online goods? Many customers in central Europe prefer to pay cash on delivery, while customers in Japan prefer to buy online and then pay for their goods at a konbini (a convenience store), either at a kiosk or at a cash register.

[Related:Simplifying Your Ecommerce Checkout for Cross-Border Customers]

Cross-border sellers need to choose payment methods that customers in their target market are familiar and comfortable with. Jewelry seller Blue Nile is a great example: Its second-quarter 2015 sales grew 59% in China, and President and CEO Harvey Kanter attributes many of Blue Nile’s great gains there to the addition of Alibaba’s AliPay as a payment method.

And as ecommerce payments become more secure over time, and the world continues its shift to the mobile internet, mobile payments should reign supreme.

Also, make sure you’re very upfront about any costs related to your product – whether it has to do with shipping, taxes or tariffs. Jimmy Tobyne, who oversees strategic partnerships and business development at Alibaba Group, says that if there is anything that causes additional costs, customers get very frustrated and will turn on you quickly, even if they were previously loyal.

Shipping, tax, and tariff not up front

Lack of transparency is also another common mistake in the cross-border journey, says Melissa O’Malley, Director, Global Merchant and Cross-Border Trade Initiatives at PayPal. Shipping fees and shipping promotions should be right up front, near the add to cart button to avoid shipping sticker shock.

Customers don’t want to have to dig through your site to find your international shipping fees – which O’Malley says is a cross-border shopper’s biggest pain point – nor do they want to have to go through the entire checkout process to see that customs, duties and taxes are not calculated in the final price.

Most surveys show that shipping costs perceived as too high, especially when they are first seen at the end of the buying process, are the leading culprit in abandonment. Studies by WorldPay, UPS and comScore, and eConsultancy found shipping costs to be responsible for 56%, 60% and 75% of cart abandons, respectively. Offering free shipping, or at least free shipping with minimum cart amounts, are the options of choice. Still, as many as half of consumers report abandoning when their totals don’t qualify for free shipping.

Merchants need to avoid unpleasant surprises by making shipping costs clear early in the process. Some merchants recommend providing shipping estimates as each purchase is added or deleted from a cart, rather than waiting until the shopper has a final total and is poised to pay.

Also, merchants should provide clear, detailed information on shipping options, delivery times and tracking. Offer the ability to add a new shipping address, or one that’s different from the billing address. Save the customer’s personal shipping address book. According to a recent survey of online shoppers by Forrester Research, 82% of respondents report buying from a merchant outside their home country, but 35% said cross-border duties and taxes were a concern.

Today’s most flexible, affordable cloud-based applications allow small- and mid-market e-sellers to determine duties, taxes, cost of goods sold and One way to ensure your cross-border customer’s package doesn’t get lost is to have him or her verify the shipping address. Global Checkout |Simplifying Your Ecommerce Checkout for Cross-Border Customers shipping costs for virtually any international transaction, says Marshal Kushniruk, Executive Vice President of Global Business Development at Avalara.

Major retailers and global delivery firms can afford bigsystem solutions, but while consumers increasingly shop and buy internationally, small- and medium-sized merchants often struggle with the complexities of calculating duties and taxes (including VAT), the cost of goods sold, and shipping expenses, says Kushniruk.

Kushniruk says that a robust landed-cost solution should address several key requirements, including capabilities for tariff (including harmonized system code classifications), as well as customs duty rates.

Merchants should also be able to use the landed-cost system to quickly and easily calculate the taxes, tariffs, customs duties and transportation fees associated with international shipping and delivery of products.

Tim Parry is Multichannel Merchant’s Managing Editor

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