How Entrepreneurs Can Enter the Global Marketplace
Cleveland Brown, CEO, Payscout
Global e-commerce holds the key to rebuilding the American economy. According to the Huffington Post, e-commerce sales have grown twice as fast as total retail sales (1). Despite challenges facing new business owners, entrepreneurs remain optimistic due to increasingly-accessible technological solutions and access to a global market.
Global sales comes with serious risks entrepreneurs may not have the experience to navigate. The process is made more difficult by American businesses being unable to successfully enter the global e-commerce market. More seriously, credit card processing errors can cause irreparable damage to online businesses, largely because most are not equipped to handle the increased risk associated with overseas transactions.
So how can an entrepreneur or business owner tap into the global market?
Simply, by partnering with a proven global merchant service provider (GMSP).
In choosing a global merchant service provider, ensure your GMSP provides the following services:
- Direct acquiring relationship with an overseas bank - The fastest and most secure method to accept a payment is a bank to bank transaction. It is important that the GMSP eliminate as many intermediaries in a transaction as possible. Each intermediary, such as a Paypal, creates an additional layer of risk that includes foreign exchange risk, legal liabilities, delayed settlement and higher processing fees.
- Description of the consumer landscape - It is imperative to understand how a consumer will perceive your product(s) in their particular country. Your GMSP should be able to consult you on the customs, economic habits and overall expectations of how a product is perceived in a particular region (e.g., Brazilians consumers traditionally spend 3 times the dollar amount for U.S. goods).
- An understanding of tax liability when operating in another country - Your GMSP must demonstrate knowledge of tax liability by showing bank sponsorship in the countries they are representing and express indemnification in your GMSP agreement. A simple mistake in tax liability can lead to an immediate seizure of funds and expulsion from a particular country. In addition, the GMSP should be able to demonstrate knowledge of domestic tax liability in conjunction with existing tax treaties between countries to avoid double taxation.
- Provide correct business infrastructure when operating in another country (if required - country specific) – Each country will require a particular business structure to operate. Your GMSP should advise on the proper structure required of the country or region.
- Multi-lingual and multi-currency payment gateway - The GMSP should provide a turnkey infrastructure to adapt to language and currency restrictions for each country in which they operate.
- Provide access to all major card brands and local payment types - The GMSP must understand that VISA/MC/American Express/Discover are not the only methods to accept payments in other countries. The GMSP should represent all major and local card types. For instance, Brazil is governed by Cielo, China accepts China Union Pay, etc.
U.S. consumers represent only one-third of total e-commerce sales, and the remaining $1 trillion is by international consumers. Compounding this, there is increasing global demand for American products that serve as an indicator of wealth in many countries.With the support of a global merchant service provider, the global market is ripe for American entrepreneurs and small business owners to jump in.
1. Huffington Post, The Future of eCommerce for Small Business, huffingtonpost.com/ian-mills/future-of-ecommerce-for-small-business_b_4862514.html. March 3, 2014. Web. March 6, 2014.
About the Author
Cleveland Brown is the CEO of one of America’s fastest-growing global merchant-processing firms Payscout (www.payscout.com),