Expanding your business globally requires understanding the preferences of new audiences, especially when it comes to payment methods. Localising payments not only meets these demands but also boosts authorisation rates and reduces declined payments. This is where local acquiring come into play. So, let’s explore what local acquiring is and why it's necessary for your business.
What we’ll cover:
Before we dive into local acquiring, let’s quickly revisit what payment acquiring entails. Acquiring is a major part of the payment processing system. When your customers make payments, their transactions are sent from their issuing bank through a payment gateway to an acquiring bank (your business’s bank) which authorises and confirms the payment.
Acquiring is the process that allows your business to process customers' debit and credit card transactions. The acquiring bank, working with a payment processor (like us!), determines the cost of processing payments and settles the final amount into your business account.
Local acquiring operates exactly like regular acquiring, with the key difference being that the acquiring bank is located in the same region as the issuing bank, even if the business operates elsewhere. This small distinction can have a significant impact on your business:
2. Fewer cross-border fees: Cross-border fees, including interchange, scheme and processing fees, are higher when processing transactions overseas. By using local acquirers, you can save on these costs, boosting your revenue and improving cash flow.
3. More sales: Local acquirers typically offer a broader range of payment methods within their region. This caters to your customers’ preferred payment options, increasing satisfaction and reducing the likelihood of purchase abandonment at checkout.
Implementing a local acquiring strategy is more important than ever before. The COVID-19 pandemic has accelerated the growth of e-commerce, making cross-border commerce essential. In 2022, the cross-border e-commerce market share increased to 22%, valued at US$156 trillion. Not going global limits your business opportunities, and local acquiring ensures you do it right.
Brexit has also impacted UK merchants, as EU regulations on interchange fee caps no longer apply. This allows card schemes like Visa and Mastercard to increase transaction fees for UK businesses accepting payments in the EEA, EU and overseas. These changes make the cost-effectiveness of local acquiring more significant.
Setting up local acquiring often requires creating individual accounts in each market, leading to multiple agreements and time-consuming processes.
However, by partnering with Total Processing, you can integrate local acquiring into a multiple-acquiring strategy. Total Processing connects you to a network of hundreds of acquirers, enabling you to process payments seamlessly while managing everything through a single partner. This approach saves you time, reduces paperwork and allows you to focus on expanding your business.
Get started with Total Processing today and let’s take your business to the next level!
