Fintech & Ecommerce

“Those not involved in e-commerce are putting themselves in a fragile situation”: interview with Nikhita Hyett, Managing Director for Europe at BlueSnap


Nikhita Hyett is the Managing Director for Europe at BlueSnap, a global payment orchestration platform. BlueSnap provides an All-in-One Payment Platform designed to increase sales and reduce costs for B2B and B2C businesses. Their platform supports online and mobile sales, marketplaces, subscriptions, invoice payments and manual orders through a virtual terminal.

UK e-commerce has significantly contributed to the global growth rate of the industry. Do you have any ideas on how UK businesses can optimise cross-border payments to maximise international sales?

With COVID, we’ve seen a boom in e-commerce sales and now people are looking further afield to sell their goods and services. As such, the barriers to global audiences have reduced so much that UK businesses are selling to additional markets; in the US, Asia and more.

To capitalise on this, there are certain ways UK businesses can optimise their cross-border sales. However you have to act local, before going global and there are three local aspects to consider – local acquiring, currency and alternative payment methods.

Firstly, and perhaps the most important element to consider is local acquiring. What we mean by this is, the processing of cross-border payments as if they were local. This method enables businesses to increase the number of successful cross-border payments while minimising cross-border fees. It also allows you to accept more payment methods and currencies, globally.

For example, for a UK business with an entity in the EU, processing European transactions would be considered as local acquiring.  A UK business with an entity in the US, would process transactions from US cardholders through a US entity, to not only avoid payment fees but also reduce authorisation rates and increase conversions. Businesses can achieve this by partnering with paytech providers who have a global network of local banks which process transactions locally to reduce costs.

Secondly, offering local currency is another reliable way to optimise cross-border transactions. As mentioned previously, offering local currency benefits the customer. The familiarity of a local currency significantly reduces the likelihood of cart abandonment – an obstacle all merchants aim to eliminate. For example, customers looking to buy products in the US, want to be able to shop in US dollars regardless of where the business is based. Our research shows that businesses that sell in local currencies see a 12% increase in sales because of the personalised customer experience. This local thinking alleviates leaving customers confused and struggling to calculate costs when purchasing from an international seller when sold in a foreign currency.

Finally, alternative payment methods will push merchants to the finish line. Payment methods such as digital wallets have been the most popular methods amongst global merchants. The number of digital wallet users is predicted to reach up to 4.4 billion by 2025, meaning global merchants must take advantage of this growing space. Every alternative payment method may not be crucial for your target market, but it’s important to understand what your customers want and then let that information guide your payment offerings.

A great example of this is iDeal in the Netherlands. This is the local payment method with over half of the population using this method to receive payments – international sellers not offering iDeal are missing out on a huge portion of potential customers.

What’s the price to pay if they fail to do so? In terms of international sales, how much businesses are expected to lose?

We’ve seen 76% of shoppers prefer to buy products presented in their own language, and if you’re offering local currency, we’ve seen an uplift of 12% in conversion. There’s everything to gain and hardly anything to lose by optimising the payment experience to suit a global audience.

If you’re a UK business with a US entity, processing your local US payments via that entity will see a significant uplift in authorisation rates. It’s simple, US banks prefer US acquiring. In some cases, we’ve seen an uplift of 40% in authorisation rates, meaning more customers are able to move forward with their purchases and businesses boost their conversions.

What is likely going to happen to businesses not engaging in e-commerce?

Those not involved in e-commerce are putting themselves in a fragile situation, especially as behaviour in the payment space becomes increasingly digitally influenced. However, we’re seeing a huge rise in software companies making e-commerce more accessible to businesses who don’t have the resources to initiate it themselves.

Most small businesses that are struggling to engage in e-commerce, may not have the necessary resources to create a website or develop an app to accept payments online. In order to keep up with the digital players that are introducing new technologies into the market, that are raising the standard of commerce –  small businesses need to innovate to avoid the risk of falling behind.

Outsourcing the innovation to a software company is a very affordable solution for small businesses, especially with the rise of payment facilitation as a service. Through software companies outsourced payment capabilities, cafe’s and other small businesses can remain competitive by paying a smaller fee per month for the entire payment offering package. This is crucial as having the ability to offer different payment methods means meeting modern-day consumers’ payment needs. Those not engaging in e-commerce need to strongly consider accepting Apple Pay and other digital wallets, as we move towards a cashless society.

Could you define the top 3 e-commerce trends in the UK?

Embedded payments are on the rise. Software companies are seeing the value of embedded payments and it’s quickly becoming integral to their revenue maximisation. This comes as no surprise as software companies that embed payments in their platforms see a two-to-five times increase in revenue per customer. For customers, having additional payment features from their trusted brands means there is the ultimate convenience and minimal friction. The need for improved customer experience is what is driving the growth of embedded payments and it’s easily the number one trend that we’re seeing in the UK.

Similarly, cross-border selling is a huge trend we continue to see as commerce increasingly becomes digital and globalisation furthers merchants’ ability to connect with global customer bases. This involves taking into consideration the cultural factors affecting e-commerce such as local payment methods, currencies and language. Companies that are considering this are reaping the benefits. For example, businesses that localise currencies see a 12% increase in sales because of the reduction of check-out abandonment. In The Netherlands we know that i-Deal is an e-commerce system used locally, therefore, we’ve ensured that UK businesses operating in the Dutch market are using these local platforms.

Finally, improving the customer journey is another key trend we’re seeing in the UK commerce industry. It’s all about offering the right payment methods, not every payment method to your customer. In a post-Covid world, instant gratification has become the staple of e-commerce with consumers shopping on multiple channels from the comfort of their homes. To meet this demand, merchants need to consider the alternative payment methods that are most convenient for international shoppers.

BlueSnap is making a name for itself in embedded payments. Can you tell us more about your upgraded offerings for businesses looking to add payments to their software suite?

As mentioned, embedded payments is a space that’s going to continue to grow. It’s taken the industry by storm in the last few years and it’s something we’ve always had a solution for.

We’ve always been able to help businesses of all kinds from software providers to big education platforms to growing marketplaces. And we do so, by optimising their payment experience through our payment-facilitation (payfac) capabilities.

What we’re doing now is redefining the solutions that we have to ensure we’re reaching all businesses with our embedded payments service solutions. Our recent expansion shows that BlueSnap can either host the application for a business or provide them with a fully white-labelled solution, so that they can onboard customers themselves and handle all of the reporting. They pull everything from our APIs, so we’re there in the background running the back-end while they sit back and watch their sales increase and their costs drop.

Embedded payments is our bread and butter, so knowing that it’ll be a future-proofing solution for any eCommerce merchants excites us.

Effective from March 14th, the new SCA regulation requires British shoppers to verify themselves with two-factor authentication for every online purchase over £25. Although it brings additional security, will it somehow affect the cart abandonment rate?

The biggest shift in SCA regulation is that 3DS isn’t optional, it’s now mandatory. Previously, some businesses used it and some didn’t, like many Spanish companies for example. The UK market, known for being a pioneer in the paytech space, is more familiar with its technology as some companies have already implemented it, so it’s hard to say whether it affected cart abandonment rate in the past.

Now that it’s compulsory, we’re in a new reality. In terms of checkout abandonment, businesses and consumers alike need to accept that consumers will demand that businesses embracing 3DS need to maintain the frictionless checkout to make sure that extra security doesn’t jeopardise the speedy and convenient process they desire.

Five years ago when companies were using 3DS, it wasn’t smooth sailing. Consumers would be redirected to authentication sites, leaving them waiting and wondering where they might be sent next. Back then there were concerns around checkout abandonment and consumers reactions to the added friction but this is the new normal. If this means that consumers are able to have more secure transactions then businesses need to strike the right balance of convenience and protection. Companies must follow regulation because, ultimately, this will create safer transactions between businesses and their customers.

And the last question. What are the most effective ways of staying ahead of the competition when it comes to selling globally?

When competing globally, businesses need to be looking at optimising their cross-border operations. Having a trusted payments partner will help with local acquiring and remove the hassle of setting up local entities. Through a good payment partner, businesses will be able to select the right route to achieve those high conversion rates and low fees. Businesses must analyse their conversion and authorisation rates – they need to be familiar with and understand them because it’s an avoidable obstacle to increased sales. For example, if you have an authorisation rate of 60%, that means 40% of people who want to buy things from your site are unable to do so. Make sure you understand that because, if your competitors are working on that and you’re not, you’ll lose out.

The same thinking goes for payment methods. If a customer has a specific payment method in mind, they will happily keep searching for the product till they can find a business that meets their preferences. Switching costs today are low, so businesses who ensure they are offering the right currencies, payment methods and other appropriate tools for your customers will not only decrease checkout abandonment but further brand loyalty. If there’s customer demand and you’re not meeting it, that’s a revenue stream you’re missing out on.

Frictionless payment gateways are a key way to stay ahead and embedding payments into your solution gives you ‘stickiness’. You provide your customer with an end-to-end journey, no redirects, hassle and waiting. If competitors aren’t offering this same level of ultra-convenience, this is a sure-fire way to gain an edge over them.

So, as a whole, knowing your customers needs and how to meet them appropriately is the best way to stay ahead. If that means seeking external help, then don’t be shy – payment providers exist for this very reason. They understand the financial field so you don’t have to.


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