If you are a regular visitor of our blog you know we are strongly in favor of cross border ecommerce growth. We have previously discussed the challenges of international customer service as well as international fulfillment but there's more to it. What to think of payments, invoicing and legal compliance? We met up with Simone De Ruosi, CEO of our partner Go Global Ecommerce to talk about the transactional challenges of cross border ecommerce.
Go Global Ecommerce is a Merchant of Record (MoR) and an expert in transactional cross border operations. In short, a MoR is an online sales legal entity, authorised by a financial institution to process online credit and debit card payments. It acts as an intermediary between the seller and the end customer and as an eCommerce legal entity. The MoR is also responsible for collecting taxes on online transactions, handling refunds and transaction cancellations, or chargebacks.
Simone, can you tell us a bit more about transactional cross border challenges?
Selling globally means taking care of different legal and fiscal requirements for every market. VAT or sales tax, privacy policies, payment regulations, terms and conditions requirements, environmental taxes, web taxes, industry regulations are some of the elements you have to take into account for every geography. It is a challenging and complex architecture to be built, which generally distracts resources from the core business of brands and sellers.
The ever changing labyrinth of online payments
With the boom of e-commerce and fintech, the options available for payments are dozens and consumers' behaviour changes over time and per region. To be successful cross border your webshop must be local in terms of offered payment options. This requires a continuous monitoring of the market, as well as a constant setup, negotiation and installment of an increasing number of payment methods.
Last but not least: Invoicing
Raising invoices and credit notes, managing administration and accountancy, reconciling payments with fiscal documents issued are basic operations of any business and often company's stakeholders take them for granted.
In cross border ecommerce however, it is far more complex as one would think. It involves matching fiscal documents with different geographies, currencies and fiscal regulations with multiple sources of payments. Clearly, it is not as simple as thought.
As with customer service and fulfillment, internationalising your ecommerce adds complexity to all transactional operations as well. To do it right you either have to invest part of your resources in building up this expertise and perform the operations inhouse, or you can work with an external expert such as Go Global Ecommerce to guarantee you are up to date and locally relevant.