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Achieving Success with Cross-Border Payments

By Kristina Russo

When U.S. businesses consider expanding globally, hoping to capture some of the 96 percent of the world's consumers and over 75 percent of purchasing power that is outside the U.S.,1 they are often stymied by the complexities of making and receiving payments across international borders. It is a contributing factor to why only 1 percent of U.S. small businesses participate in international trade.

For example, experts say it’s critical, whether sending or receiving money from overseas, for companies to offer international customers and suppliers different payment-method, language, and currency choices, in line with local preferences.2 The following discussion highlights some important initial considerations.


Considerations for B2C Cross-Border Customer Payments


When U.S. B2C companies engage with customers abroad, especially online, those customers want the same level of comfort as when making purchases from domestic companies, including familiar payment options and transaction security, research suggests.


Payment Strategies

Payment cards (credit, debit, and prepaid) are the most common cross-border payment method in global retail, according to a 2018 Worldpay study.3 As such, it is important for companies to identify and accept the type and brand of card most common in the various countries in which they do business.


The next most common payment method is digital wallets, which are growing especially quickly among mobile users, and particularly in Asia. In China, for example, 67 percent of all e-commerce is conducted via digital wallets, such as Alipay and WeChat Pay.4 Different digital wallets are popular in different areas of the world.


Payment gateways, such as PayPal, Amazon Pay, and Stripe, are another way to collect cross-border e-commerce payments. Different payment gateways are common in different countries, so companies may need to investigate which are used in the countries where they wish to do business.


International payments via bank transfer represent more than 10 percent of e-commerce payment methods worldwide, according to the Worldpay study. But unlike the other cross-border payment methods, bank transfers are not expected to grow significantly. They are most popular with customers in Europe, especially in Germany.5



Language is a significant consideration when creating a comfortable payment environment for cross-border customers. According to a recent survey, 75 percent of online customers from outside the U.S. expect to buy products in their native language, and 59 percent never buy from English-only websites.6



Research also indicates that B2C customers overwhelmingly prefer paying in their local currency. In fact, 92 percent of online customers prefer to buy in their local currency, and over 30 percent will abandon a purchase if the product is priced only in U.S. dollars.7


Making and Receiving Cross-Border B2B payments


It can be important for B2B companies to understand which payment variables are most important to their suppliers and other business partners. Those variables typically include security, costs (including foreign exchange risk), speed, and reliability.8


Payment Strategies

Wire transfers, typically used for high-value transactions, are a fast and secure way to make cross-border payments. Money is moved electronically from one financial institution to another, via the Clearing House Interbank Payments System (CHIPS) or the Society for Worldwide Interbank Financial Telecommunication (SWIFT), using bank account numbers, routing numbers, SWIFT codes, and other means. Pros include the speed and security of such transactions, while cons include relatively high transaction fees.9


International Automated Clearing House (IACH) transfers are often the choice for low-value, high-volume cross-border payments. They tend to have low (or no) fees, but they can take longer to settle than wire transfers because they are processed in batches.10


Payment gateways are also common for B2B cross-border payments, as they are for B2C. Gateways can be easy to use and provide companies with transparent, quick access to funds, with lower fees for smaller transaction amounts.11 Most payment gateways can be integrated with credit or debit cards, various currencies, and even Bitcoin.12



Cross-border B2B payments are best handled in local currencies, like B2C but for different reasons. Using local currency to pay suppliers may provide opportunities to save money, as suppliers outside the U.S. are often charged a fee by their local banks to accept U.S. dollars. Additionally, paying in U.S. dollars pushes foreign exchange risk onto the supplier. Paying in local currency avoids those costs and risks, which may allow suppliers to offer price discounts—upwards of 10 percent, according to Financial Executives International.13


Additionally, suppliers may also appreciate the quicker access to funds that local currency payments may provide. However, payment in U.S. dollars may sometimes be beneficial, especially in countries such as China and Malaysia where local currency is highly regulated, or in countries with less stable economies.14


When billing customers, it can be helpful to make invoices as compatible with the customer’s accounts payable system as possible. Providing a local currency option may prove helpful in receiving payment more quickly and reliably.15



The complexity of making and receiving cross-border payments can be significant. It is important to understand the preferences of customers and suppliers. Payment providers can be a helpful resource.

Kristina Russo - The Author

The Author

Kristina Russo

Kristina Russo is a CPA and MBA with over 20 years of business experience in firms of all sizes and across several industries, including media and publishing, entertainment, retail and manufacturing.


1. “SBA: Only 1 Percent of America’s Small Businesses Export Overseas,” Inc.;
2. “5 Things to Consider When Accepting Cross-Border Payments,” Forbes;
3. Global Payments Report 2018, Worldpay;
4. Ibid.
5. Ibid.
6. “Global Ecommerce Statistics and Trends to Launch Your Business Beyond Borders,” Shopify Plus;
7. Ibid.
8. A Vision for the Future of Cross-Border Payments, McKinsey & Company;
9. “The 5 Best Ways to Pay International Contractors and Employees Abroad,” Transferwise;
10. “Key Differences Between ACH and Wire Transfers,” The Balance;
11. “Payment Gateways: Keeping Your eCommerce Transactions Safe,” Big Commerce;
12. “How to Accept Payments Online,” Fundera;
13. “Have You Considered Paying Foreign Suppliers in Their Local Currency?,” Financial Executives International;
14. “International Payments for International Expansion,” Financial Executives International;
15. “5 Things to Consider When Accepting Cross-Border Payments,” Forbes;

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