Boosting Global Sales with Local Acquiring

5 Minute read
1 year ago

By Dzmitry Mikhaliov 

Trade is becoming increasingly global and challenging to navigate through the ever-growing global regulatory complexities, capital controls, and the necessity to reach emerging markets. This is especially the case for digital goods merchants, with products not restricted by borders, such as gaming, eLearning courses, apps, online games, SaaS, etc. 

The global eCommerce landscape is booming with opportunities for digital businesses to grow revenue and market share. According to Grand View Research, the global eCommerce market size is expected to grow at a compound annual growth rate (CAGR) of 14.7% from 2020 to 2027.  

Differences in Acquiring Models: 

Imagine an EdTech company from the U.S. (e.g., Masterclass), Europe (e.g., Babbel), or Asia (e.g., VIPKid) that sells their courses and issues pay outs to tutors worldwide. Where it becomes complicated for merchants to expand, pay, and get paid are the large, hard-to-reach regions such as APAC or Latin America. What are their options for collecting card payments? 

There are three possible scenarios: 

  • Cross-border acquiring: A single entity in one jurisdiction collects card payments in multiple countries via a single acquirer. 
  • Local acquiring: Local entities to sign a card acceptance contract with a local acquirer in every country your company is doing business in. 
  • Local acquiring with Nium: The single best solution is an acquiring partner with licenses in multiple markets. With Nium, there is no need for local entities – a single contract between Nium and your single entity based in any jurisdiction is all that is needed to do local acquiring in different markets.  

Comparing the Acquiring Models: 

At a macro level, the pros, and cons of these three alternatives can be summarized below: 

A screen shot of a video game

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Benefits of a Local Acquiring Offering for Digital Goods Merchants 

There are many benefits to local acquiring, including an increase in conversion rates and minimizing costs associated with FX fees for the end customer. Furthermore, research from indicates an increase in purchases when given the opportunity to use their preferred payment methods: for example, local card networks are highly popular in some markets, and offering them can make a difference for a business, e.g. by collecting payments via RuPay in India. Additionally: 

  • Higher conversion rate. Conversion rates in local acquiring tend to be 20-30% higher than those in cross-border. This is driven by tapping into local acquiring banks whereby the collection request is seen as not only local but also rightly formatted to meet the local bank’s standards. More so, there might be cases when there was an upsurge in fraud from a specific geographic location of the acquirer, and the issuing bank might opt to exercise the controls to limit the fraud and reject legitimate transactions.  
  • Fast and standardized settlements. Another important consideration when processing cross-border payments is how much money gets settled into your bank account. Ideally, you want to: 
    • Receive settlement payout as soon as possible  
    • Receive money in the currency of your choice 
    • Standardize settlement cycles across countries and various card schemes (see the graph below)

The standardization of the settlement cycle across all countries and payment methods leads to faster and more streamlined receipt of settlement payout, substantially simplifying reconciliation challenges that businesses would have faced otherwise. 

Improved payments experience 

Nium Checkout is your solution to unlocking better payments experiences for customers and accelerated market access so that you can scale your business faster. Local acquiring with Nium boosts customer acquisition, enables local card acceptance to accommodate more ways of payments, simplifies reconciliation, and requires one single integration to access multiple markets- an easy, fast, and secure way to continue driving your sales growth with seamless payments.  

If you would like more information on how our solution can help your business, connect with me to learn more. 

About Dzmitry Mikhaliov 

Based in Dubai, UAE, Dzmitry is the Director of Business Development for Nium Checkout. With a breadth of experience in financial technology and services on both the operating and investing side, he leads Nium Checkout’s go-to-market activities globally. 

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