In today’s globalized world, where trade has expanded rapidly, the volume of international trade is also rising. A study indicates that in the first quarter of 2023, international product trade increased by approximately 1.9% compared to the last quarter of 2022, reaching nearly 100 billion dollars. The global marketing of products and services assists companies in establishing their presence in a competitive environment. As international trade expands to such an extent, leveraging technology has become necessary for businesses to claim their share of this global market. One of the crucial steps in these operations is the payment process. In this article, we will explore the advantages payment orchestration technologies offer to businesses in international trade.
What is International Trade, and How Does it Work?
International trade involves businesses presenting products or services in the global market. The trade volume in the domestic market of countries with advanced international trade operations shows a similar level of sophistication. Developing international trade processes also contributes to advancing logistics, e-export, global payments, and customs operations.
So, how is international trade conducted? Export, import, logistics, and customs processes, expressed as the essential elements of international trade, form the basis of global product and service exchange. Considering different international trade agreements and regulations, specific legal requirements exist for international trade processes.
These legal requirements include reporting order and invoicing processes, organizing logistics operations, and comprehensively preparing customs documents. In addition, there are commercial requirements that parties need to fulfill according to mutual agreements.
Especially to identify the risks in international product shipments, standards have been defined to assist businesses wishing to engage in overseas trade. These standards, known as Incoterms, help companies determine which party is responsible for the risks and liabilities that may arise in international product shipments by adding provisions to their contracts.
The Top 5 Advantages of International Commerce
International trade offers numerous advantages for businesses aiming to establish a global presence.
According to the FedEx Trade Trend Report, prepared by Morning Consult and based on a survey conducted with small businesses in the United States, American small businesses increasingly perceive international trade as a significant opportunity. The report suggests that three out of four participants view the expansion of trade between the United States and other countries as a positive trend. Approximately 50% of the participants believe expanding trade will benefit their businesses or companies. Here are the top 5 advantages that international commerce provides to businesses:
Income Increase
One of the most significant advantages of international trade operations is the potential increase in the customer base. With proper market research, global trade operations can open new avenues for increased business revenues in every targeted country. 78% of the FedEx Trade Trend Report participants agree that international trade will create revenue opportunities.
Competitive Advantage
Introducing different products and services to new markets can create a competitive advantage for businesses. Considering that many products and services in the domestic market are saturated, exploring new markets can be a lucrative income stream. This situation represents a distinctive business advantage, particularly in markets with relatively low competition.
Longevity
Regarding user behavior, the lifespan of products and services offered in the domestic market can expire. In this regard, presenting products or services to overseas markets allows businesses to extend their lifespans, especially in developing markets.
Easier Cash Flow Management
While globalization has eliminated borders in business, the ways of doing business in different geographies have affected commercial processes. In this regard, payment terms for selling products or services in international commerce transactions may vary. Operating in regions where payments are made in advance or with shorter terms provides an advantage regarding cash flow.
Effective Risk Management
An essential advantage of international trade processes emerges in terms of market diversification. Focusing solely on the domestic market exposes businesses to certain potential risks due to factors such as economic downturns or environmental events. Becoming less dependent on a single market gives companies an advantage in minimizing such risks.
Considerations in International Trade
To benefit from the advantages of international trade, businesses must accurately determine their strategies and be meticulous during the preparation phase. Detailed research on the market where products and services will be offered and the foreign trade regulations of that market should be conducted.
In the case of product trade, identifying supplier companies or buyers and obtaining and giving offers are among the primary steps. This allows for a more accurate determination of the pricing policy. Companies that will engage in international commerce for the first time can make their operations easier by seeking support from expert and experienced firms in this field.
Advantages of Payment Orchestration Tools in International Commerce
Payment orchestration solutions in international commerce help businesses manage their overseas operations more efficiently and securely. Let’s examine the key advantages offered by these technologies:
- Collaboration with Payment Institutions in the Target Market: Payment orchestration solutions enable businesses to quickly collaborate with payment institutions in the target market they aim to enter. For instance, Craftgate merchants can already work with high-acceptance organizations such as Stripe, Payoneer, PayPal, AliPay, Klarna, Afterpay, Clearpay, Braintree, and Paytabs. Completing agreements is sufficient when they want to collaborate with local payment institutions in a new market. Craftgate’s experienced team swiftly completes the necessary technical developments, and merchants begin working with the relevant payment institution.
- Cost Efficiency and Productivity: Payment orchestration solutions allow businesses to carry out payment processes in international operations efficiently. They minimize commission expenses by processing payments through the lowest commission payment method.
- Global Market Access: Payment orchestration solutions facilitate reaching customers in different countries. They offer flexibility in receiving payments in other currencies and working with various payment methods. This allows businesses to access international markets more easily. For example, Craftgate merchants can accept payments in 9 different currencies, including the US Dollar, Euro, British Pound, Brazilian Real, Argentine Peso, Chinese Yuan, United Arab Emirates Dirham, and Iraqi Dinar.
- Reporting and Optimization: Orchestration solutions automate payment processes, reducing manual workload. Businesses can track the status of payments in international commerce processes in real-time. Payment orchestration tools enable businesses to improve payment strategies with in-depth reporting and analysis.
- Customer Satisfaction: Seamless operation of the payment step is a prerequisite for businesses to provide customers with a high-quality shopping experience. Smooth and hassle-free payment processes directly impact customer satisfaction in international trade processes, just as they do in the domestic market. Businesses aiming to succeed in new markets should use orchestration technologies in the payment step.
For more detailed information, refer to our guide on Guide to Receiving Payments from Abroad for Businesses.
Conclusion
In the globalized world, initiating international processes brings many advantages to businesses. Payment orchestration solutions enable them to be more competitive internationally and derive incredible benefits from global markets. At this point, making a careful evaluation to ensure that the chosen solution is tailored to the needs of the business is crucial.
Craftgate becomes the first destination for merchants in their international trade processes with its experienced team in the payment field and product technology that brings together the best payment practices. Meeting all the needs of overseas operations through the ability to receive payments in 9 different currencies and easily collaborate with leading organizations in different regions, Craftgate allows merchants to focus on achieving their growth goals in the market, trusting Craftgate in the payment step.
From our International Payment Methods page, you can access the payment institutions you can reach with Craftgate in your target market. When you want to work with other organizations in different markets, we would like to remind you that after completing your agreement by fulfilling the requirements of the relevant organization, we swiftly complete the necessary technical developments.
Contact us to take advantage of payment orchestration technology in your business and gain an edge in your target market!
To share our experience and knowledge in the field of payment systems, we regularly publish content on the Craftgate Blog.
Remember to subscribe to the Craftgate Newsletter to stay informed about our new blog posts on Fintech, e-commerce, retail, and payment processes!
