Selling cross-border is no longer a niche activity. More than half of UK shoppers buy from international stores, nearly a third of U.S. consumers do the same, and many European markets are seeing double-digit growth in cross-border commerce. That means for many retailers, international orders are shifting from side business to core revenue.
But along with increased opportunity comes hidden payment costs. Higher processing and currency conversion fees, slower settlements and over-aggressive fraud controls all drain margin. Add in abandoned checkouts when local methods aren’t supported, and international sales can feel like an expensive experiment.
None of these costs are inevitable. Most can be reduced with a better setup and smarter choices. The steps below show how retailers can expand globally without letting payments eat into every sale.
Start with Payment Methods
Relying only on debit and credit cards is a common mistake. Yes, Visa and Mastercard work pretty much everywhere, but they’re not always the cheapest or most trusted methods.
Advertisement
In Portugal, Multibanco dominates. In Spain, Bizum is the default. It’s important to recognize those local nuances, as research suggests that around 28% of shoppers are likely to abandon a cart if their preferred payment method isn’t available.
Even where cards remain popular, mobile wallets like Apple Pay and Google Pay are now expected — especially by millennial and Gen Z shoppers. Adding them is mostly about improved conversion, but also reduced cost: such wallets can lower fraud-related chargebacks and speed settlement times.
Some multi-currency wallets also let merchants hold funds in the original currency rather than being forced into instant conversion at unfavorable rates. That flexibility matters: you can choose when to convert, or keep a balance locally to handle refunds and pay suppliers in-country without taking an FX hit.
There is, however, a caveat: The right approach isn’t “add everything.” It’s about matching methods to traffic. Check where the majority of your customers are based, what’s being declined and which local schemes appear most often. A small change, two or three methods added with intent, can deliver disproportionate results.
Decide if a Local Entity Makes Sense
Opening local entities in countries where you expect to do business is one option for reducing costs, but it isn’t always necessary from day one. If a large share of your sales starts coming from a single region, using local acquiring can improve approval rates and cut fees by treating payments as domestic.
The practicalities matter: opening a local merchant account means dealing with compliance, tax and banking in that market. The key is timing — move too early and the overheads outweigh the benefits; move too late and you’ve already lost margin.
One Provider or Many?
A single global provider looks simpler: one contract, one dashboard, one support channel. For lean teams, that simplicity is valuable.
The trade-off is flexibility. A global provider may not offer the best rates or strongest local connections in every market. Regional partners often do. They can support those alternative payment methods like Bizum at lower cost, and sometimes settle funds faster in a local currency.
Some retailers choose a hybrid approach: a global provider at the core, with local acquirers added where volume justifies it. The calculation is simple: weigh complexity against savings. If multiple dashboards will drain more time than they save in fees, global may win. If a local setup cuts costs by 30% to 40% and raises approvals, the admin is surely worth it.
However, for most SMEs, the best answer isn’t juggling payment providers. It’s finding a single partner that combines local acquiring with global coverage. That way, you keep the simplicity of one contract and one set of reports but still benefit from local optimization. It also means clearer reconciliation, fewer distractions and a partner that can guide you through local account setup when you need it.
Don’t Ignore Routing
Routing — how each transaction is steered through different acquirers or processing paths — is often overlooked. Relying on a single merchant account can work domestically, but internationally, it often means higher fees and more declines.
Smart routing avoids this by distributing payments across multiple accounts. A merchant might hold accounts with banks in different countries or currencies; the system will automatically select the route most likely to succeed at the lowest cost. That can mean higher approval rates and fewer unnecessary charges.
Extra resilience comes from a technology called cascading. If a payment request fails with one account, it is instantly retried through another, and then another if needed. This step-through process keeps transactions moving rather than losing the sale outright.
Use Enhanced Scheme Data
Visa and Mastercard reward detail. Transactions sent with richer data are seen as lower risk and often qualify for reduced interchange fees.
This is where Enhanced Scheme Data (Level 2 and Level 3) comes in. Level 2 covers fields like VAT breakdowns and invoice IDs. Level 3 goes deeper into line-item detail. For high-ticket or B2B sales, the savings can be meaningful.
Many SMEs pay more than they should simply because a data field is blank. Even something as simple as a VAT line item can unlock lower rates. Adding an invoice reference or product code is hardly a major project, but not all providers enable it by default. Ask whether you’re already sending Level 2/3 data, and if not, what’s missing. Filling the blanks is one of the cheapest ways to reduce fees.
Balance Fraud Controls with Conversion
Fraud rises when you sell abroad, but accidentally blocking good customers is just as costly. Over-strict filters often hit high-value transactions hardest — the very sales you can least afford to lose. It’s not unheard of to see SMEs lose 10% of international orders to fraud filters set too tightly.
The goal isn’t zero fraud. It’s acceptable fraud levels, balanced with higher approvals. That balance usually means AI for patterns plus skilled human reviewers for edge cases. A machine can flag odd behavior; a human can spot when it’s actually a legitimate order.
Fraud patterns also vary by market. Behavior that looks suspicious in the UK may be normal in other parts of the world. Applying one blunt global rule is a recipe for lost sales. If international orders are being declined at unusual rates, review your filters. The fix may be as simple as tuning settings for regional nuance.
Quick Wins you can Action Now
Not every fix needs a long project. For SMEs, these are the fastest levers to pull:
- Add Apple Pay and Google Pay: Expected by mobile shoppers, they cut checkout friction and chargebacks.
- Offer local methods where traffic justifies it: Multibanco in Portugal, Bizum in Spain, for example.
- Review your FX setup: Forced conversion can quietly take 2% to 3% of every sale.
- Enable Address Verification Service (AVS): It reduces chargebacks and lowers risk scores.
- Simplify checkout: Add guest options, fewer steps or redirects and a consistent design.
- Ask about IC++ vs. blended pricing: Transparency shows where the hidden margin lies.
- Check settlement times: Predictable cash flow is as important as headline fees.
Each change is small, but together they protect profits and improve the customer journey.
Closing Thoughts
Cross-border sales don’t have to mean thinner margins. The biggest leaks — high fees, FX spreads, failed approvals and overzealous fraud filters — are all fixable.
Most of the gains come from practical steps any retailer can take: adding the right methods, tuning fraud rules, sending better data and asking harder questions of your provider.
Treat payments as part of your growth strategy, not an inevitability you can’t influence. Most of these improvements are available to SMEs, not just enterprise-level businesses. Done right, international expansion doesn’t drain resources; it actually strengthens them.
Mark Andreev is the COO of payment provider Exactly.com and a fintech leader with over 20 years of experience. A pioneer in launching card payments in Europe, he now leads Exactly.com’s strategy to help ecommerce businesses scale across the UK and EU — without scaling costs. He champions a new fintech standard by combining smart payment technology with real human support, focusing on micro and SME merchants with ongoing assistance that extends beyond the integration stage. Previously, as CEO of Decta, he oversaw the company’s expansion across Europe and the UK and strengthened its payment infrastructure.
