International payment gateways 101: What businesses need to know

Last updated August 8, 2023
  1. Introduction
  2. What is an international payment gateway?
  3. What do international payment gateways do for businesses?
  4. Benefits of international payment gateways
  5. How to choose the right international payment gateway

With 5.3 billion global ecommerce users estimated by 2027, the global marketplace presents many opportunities for businesses to extend their reach. But capitalizing on these opportunities requires enabling smooth and secure transactions across international borders.

Below, we investigate the importance of international payment gateways, examine their role in boosting business growth, highlight their benefits, and guide you through selecting the right one for your needs. In a global economy that grows more closely connected with each passing year, these factors can help businesses significantly transform their operations, improve customer experience, and position themselves for success in their key markets.

What’s in this article?

  • What is an international payment gateway?
  • What do international payment gateways do for businesses?
  • Benefits of international payment gateways
  • How to choose the right international payment gateway

What is an international payment gateway?

An international payment gateway is a key component of ecommerce platforms that facilitates online transactions between customers and businesses in different countries. This digital portal authorizes and processes payments in multiple currencies, enabling businesses to easily conduct and expand their business globally. International payment gateways allow businesses to accept a broad range of payment methods, including credit cards, debit cards, and digital wallets, improving the shopping experience for international customers.

What do international payment gateways do for businesses?

International payment gateways are important tools for businesses seeking to establish a global presence. They serve several functions that significantly impact the efficiency, reach, and profitability of a business’s operations. These include:

  • Global market access
    International payment gateways work like a global payment passport for businesses. They enable businesses to accept payments from customers all over the world, in their local currencies, which increases market reach and the size of their customer base.

  • Risk management and fraud prevention
    International payment gateways come equipped with robust security measures that protect against fraudulent transactions. Gateways use advanced encryption and tokenization techniques to ensure the safe and secure transfer of sensitive data. This risk-management capability can enhance customer trust in your business.

  • Simpler transactions
    International payment gateways simplify the payment process by providing a unified platform to handle different payment methods. This convenience can improve customer experience, leading to increased sales and customer retention.

  • Regulatory compliance
    Conducting business on a global scale means navigating complex financial regulations and standards. Payment gateways ensure that businesses remain compliant with these rules, which can include the Payment Card Industry Data Security Standard (PCI DSS) for card transactions as well as local financial regulations.

  • Real-time reporting and analytics
    Gateways provide valuable insights through real-time reporting and analytics. They track and analyze every transaction to collect data on customer behavior, sales trends, and performance metrics. This data can inform business decisions and drive growth.

International payment gateways don’t just facilitate global transactions. They also help businesses expand their international presence, safeguard transactions, improve customer experiences, ensure regulatory compliance, and gain insights to inform decision-making.

Benefits of international payment gateways

International payment gateways provide businesses that are expanding their operations globally with substantial advantages. Here are some of those benefits:

  • Global market penetration
    International payment gateways break down geographical barriers, allowing businesses to connect with customers around the world. For example, a small artisan business based in India can sell its products to customers in France, Australia, or the US with relative ease. This global reach can significantly enhance a company’s customer base and revenue potential.

  • Multicurrency support
    Gateways support transactions in many currencies, allowing businesses to accept payments in the customer’s local currency and create a simple transaction process for the customer. For instance, a UK-based online retailer can accept payments in euros from a customer in Germany or in yen from a customer in Japan. This flexibility can boost international sales and foster customer loyalty.

  • Superior customer experience
    Businesses that offer a variety of payment options cater to a broader range of customer preferences. Customers can choose from popular payment methods including credit cards, debit cards, bank transfers, and digital wallets such as Apple Pay, Alipay, or Google Pay. This freedom to choose enhances the customer’s shopping experience and helps businesses keep pace with customer expectations and preferences, which can lead to higher conversion rates.

  • Robust security and fraud prevention
    International payment gateways incorporate state-of-the-art security protocols, such as encryption and tokenization, to protect sensitive customer data. For example, gateways encrypt customers’ credit card information during transmission, making it unreadable to fraudulent actors. Some payment gateways also use advanced fraud-detection systems to identify suspicious activities, reducing fraudulent transactions. These measures enhance customer trust, which can lead to repeat purchases and increased sales.

  • Efficient cash-flow management
    By processing payments quickly, international payment gateways can significantly improve a business’s cash flow. Businesses can access funds from sales earlier, resulting in more effective financial management.

  • Adherence to regulatory standards
    The complex network of international financial regulations and standards can be challenging to work through. Payment gateways help businesses stay compliant by adhering to regulations such as PCI DSS and the European Union’s General Data Protection Regulation (GDPR). This lowers the risk of legal issues, fines, and reputation damage from noncompliance.

  • Insightful business intelligence
    The transaction data collected by payment gateways can offer businesses valuable, actionable insight into customer buying behavior and preferences, sales trends, and revenue performance. For example, a business might discover that sales of a particular product are especially strong in a certain country and decide to focus more marketing efforts there. These insights can inform strategic planning and decision-making, driving business growth and profitability.

  • Scalability for growth
    As businesses expand and their transaction volumes increase, international payment gateways can easily adapt to meet the growing demand. For instance, a startup that initially serves a few hundred customers can easily scale its operations to serve millions of customers worldwide, without switching to a different payment system.

Using an international payment gateway can significantly boost a business’s competitive standing, profit margins, operational efficiency, and growth trajectory in the global marketplace. International payment gateways are powerful tools that can drive business expansion and success on a global scale.

How to choose the right international payment gateway

Choosing an international payment gateway is an important decision for any business that is expanding globally. Here’s a step-by-step guide to working through this process:

  1. Understand your business needs: Not every business has the same requirements for its international payments infrastructure. The first step in this process is to define what you need from a payment gateway, based on your business’s specific requirements. Consider factors such as your current business size, target audience, industry, and growth plans.

  2. Research transaction costs: Each payment gateway has its own fee structure, which may include setup fees, monthly fees, transaction fees, and extra charges such as chargeback fees. Consider these costs in relation to your business’s budget and transaction volume. For information about Stripe’s flat-rate fee structure, go here.

  3. Consider payment methods and currency support: The gateway you choose should support a wide range of payment methods and multiple currencies, particularly those that your primary customer base prefers. You don’t need a payment gateway that supports every global currency; you need a gateway that supports the ones you work with now or plan to work with in the future. Stripe supports processing payments in more than 135 currencies.

  4. Evaluate security measures: Your chosen gateway should meet high security standards, such as PCI DSS, and use robust encryption tactics to protect sensitive data. Research which fraud and security concerns are most common in each of the global markets you will work with, and assess which international payment gateway providers are best equipped to handle them.

  5. Check integration compatibility: Ideally, the payment gateway you choose should integrate smoothly with your existing systems, such as your ecommerce platform, CRM, etc. This will increase operational efficiency, reduce implementation costs, and create a more flexible payments infrastructure.

  6. Review customer support: When accepting international payments, access to customer support is key. Your gateway provider should be able to address your queries and solve any issues promptly, minimizing downtime and keeping your operations running smoothly. For example, Stripe offers 24/7 customer support via email, phone, and live chat.

  7. Ensure regulatory compliance: The gateway must comply with all relevant financial regulations in the countries where you operate, to avoid potential legal complications.

  8. Prioritize scalability: Choose a payment gateway that can scale with your business. As your transaction volume grows and your market expands, the gateway should be able to support that growth.

  9. Look at analytics features: Some gateways offer valuable reporting and analytics tools, providing insight into sales trends, customer behavior, and other key data, which can inform your business strategy.

  10. Assess the user experience: Finally, consider the user interface from the customer’s perspective. The payment process should be intuitive, fast, and user friendly, if you want to reduce the number of abandoned carts and failed transactions.

To learn more about how payment-gateway functionality works within Stripe’s comprehensive suite of global payment solutions, get started here.

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