Payment processing follows the same seven steps whether a transaction is domestic or international. However, cross-border payments have some additional considerations that, if addressed, will help you make the most of your international sales. Here’s how they work:

1. The customer purchase: Your customer arrives at your checkout page, shopping cart filled with merchandise (or services or software), ready to make a purchase. They choose a payment method and enter any required information associated with it.

For cross-border payments: To make cross-border eCommerce a success, this step requires some extra attention — a localized checkout experience. The checkout page should always be presented in the shopper’s language. According to a global survey, 76% of shoppers prefer to purchase products presented in their own language and 65% prefer website content that’s in their language, even if it’s of poor quality.

Not only does this make the customer feel more comfortable navigating the page, but it also feels more like a local shopping experience, making it more likely that customers will see the process through. A payment gateway with an emphasis on cross-border transactions will detect the shopper’s IP address and serve up the appropriate experience.

Similarly, the price of your goods should appear in the shopper’s local currency. This is important for two reasons: One, it helps your customer know exactly how much they’ll be paying, without making them jump through hoops by doing currency conversion calculations. Two, it’s more likely that the transaction will be approved by the acquiring bank (see step #2). Again, a simple IP check by your payment provider should provide the shopper with what they need.

Lastly, your checkout page should offer local payment methods — no matter what country your shopper is in, they should be able to choose whatever method of payment they use normally. Without local payment options, you risk losing the sale altogether; at the very least, your customer won’t be completely satisfied with the experience.

2. Routing and processing: In this step, the customer’s card information is captured and encrypted by the payment gateway. The gateway then sends an authorization request along with the transaction information to an acquiring bank — the bank or financial institution that processes credit or debit card payments on behalf of the merchant (you). The acquiring bank then sends the request to the issuing bank — the shopper’s bank — to request approval to process the transaction.

For cross-border payments: To conduct cross-border eCommerce transactions more effectively, a payment solutions provider should partner with numerous acquiring banks around the globe. Some payment providers only have one acquiring bank partner, so it’s important to check! Why? A one-bank partnership sets up global payments for failure. If the acquiring bank is located in the US and the shopper’s bank is in another country, that transaction has a much higher probability of being flagged for fraud.

3. Approval: In the approval phase, the issuing bank either approves or denies the request. That decision might seem like a no-brainer — either funds are available or they’re not — but the decision is based on a few different factors, including availability of funds, transaction value, etc.

For cross-border payments: Approval becomes more challenging for cross-border payments because there is the potential for more risk. Banks consider the same factors when authorizing any transaction, but with international sales, there’s more likely to be a mismatch:

• Funds: Are the funds available to cover the amount of the transaction?

• Transaction value:  Lower value transactions have a better chance of being approved as higher value transactions are seen as higher risk. If you have higher ticket items, you might consider offering a subscription plan to be able to offer lower value transactions to increase the chances of approval. For example, rather than charging $120 a year to access your software, charge a monthly $10 fee.

• Currency mismatch: If the currency request doesn’t match the issuing bank’s local currency, the transaction is more likely to be declined.

For cross-border payment processing, the approval step goes more smoothly when transactions are routed to the banks most likely to approve them — banks that are a good match geographically and that fit the transaction’s currency and issuing bank or country. This type of “intelligent” routing helps increase approval rates.

4. Shopper results and confirmation: Once the issuing bank has made a decision, it informs the acquiring bank, which authorizes the transaction and then informs the customer via the checkout page as well as you, the business.

All of these steps happen in about a second.