India is one of the fastest-growing economies in the world, with its exports steadily growing over the years. In 2021, India’s merchandise exports were valued at approximately USD 395 billion. Cross-border payments play a crucial role in facilitating these exports by enabling Indian businesses to receive international card payments from customers in different parts of the world.
In fact, cross-border payments account for a significant portion of India’s total payment flows, with a total value of USD 151 billion in 2020. This highlights the importance of cross-border payments for Indian businesses and the need for reliable payment partners to ensure smooth transactions and reduce payment-related risks.
Why is accepting international payments important for Indian businesses?
By accepting international card payments, businesses can tap into new markets and attract customers from all around the world. This not only helps in diversifying their customer base but also provides an opportunity to increase revenue streams, expand customer base and enhance brand visibility on a global scale.
What are the top challenges Indian businesses face with international payments today?
There are several challenges that Indian businesses face when accepting international payments, including:
- Limited payment options: Indian businesses face limited payment options for international transactions due to factors such as currency restrictions and lack of access to international payment gateways. According to a survey by a payment gateway, only 24% of Indian businesses surveyed accepted international card payments, and the majority of these businesses only accepted cards. This limited payment option can result in a loss of customers who prefer alternative payment methods.
- Fraud: Indian businesses accepting international card payments are vulnerable to fraudulent transactions, which can result in significant financial losses and damage to their reputation. According to a report by Experian, India ranks among the top countries globally in terms of the percentage of businesses that have experienced payment fraud. The report also highlights that small and medium-sized enterprises (SMEs) are at higher risk of fraud due to their limited resources and expertise in managing international transactions.
- Lower success rates: International payments have a lower success rate compared to domestic payments due to various factors, including currency conversions, regulatory compliance, and fraud prevention which results in delays in receiving payments and lost revenue for businesses.
- Compliance: Navigating and complying with different payment regulations and policies across various countries is a significant challenge for Indian businesses accepting international payments. 62% of Indian businesses cited compliance with local regulations as the most significant challenge, according to a survey by Deloitte. Furthermore, having FIRS for your international transactions is one of the most important documents to be submitted to the Directorate General of Foreign Trade (DGFT) as proof of export.
How did Razorpay address these international payments challenges for Indian businesses?
At Razorpay, we understand the challenges faced by Indian businesses in accepting international payments. Hence, we have taken several steps to manage fraud and increase the success rates for international transactions while keeping fraud at bay.
First Payment Aggregator in India to launch 3DS 2.0 for International Cards
One of our significant achievements is the launch of 3D Secure 2.0, which has contributed to increasing the success rates by 8-10%. This enhancement has been a game-changer for businesses, helping them receive payments faster and more securely.
The company’s close partnership with networks and overseas issuer banks enabled a swift transition to 3D Secure 2.0 without any disruptions. The iZealiant team at Razorpay played a crucial role in this process, providing technical expertise and ensuring a smooth integration.
3D Secure 2.0 is a secure authentication protocol that adds an additional layer of security to online transactions, reducing the risk of fraud. It works by sending additional data points to issuers, enabling them to better assess the risk and skip 3D Secure when appropriate, resulting in a higher SR for businesses.
With risk-based authentication, the issuer bank (cardholder’s bank) decides whether second-factor authentication is required or whether it can be bypassed for each card transaction. This decision to skip AFA is based on the 50+ additional data points that are collected by card networks (Visa, Mastercard, etc.) from Razorpay.
These data points include:
- Transaction value
- Type of customer: New or Repeat
- History of the cardholder
- Behavioural history of the cardholder
- Device information, etc.
Our customers are seeing great success with Razorpay on 3DS 2.0. Here’s an example:
One of India’s largest Online Travel Aggregators (OTAs) experienced a jump of 13% in their success rates with the introduction of 3DS 2.0. In the current global festive season, this has given a significant boost to their revenues without any exposure to fraud/chargeback risks.
Working with Razorpay has resulted in making experience for our international customers smoother and helped us achieve significantly higher success rates & higher sales. We are impressed with their comprehensive 24×7 support and look forward to our continued partnership.
Mohit Goyal, Associate Director, Product Management, MakeMyTrip
Support for additional currencies (Not available with other payment aggregators!)
In addition, we have enabled support for additional Middle Eastern currencies, providing businesses the flexibility to accept payments in different currencies. Currently, Razorpay is one of the only few payment aggregators in India with an ability to support these currencies.
Smarter risk controls
Our risk engine control and smarter velocity rules have helped prevent fraudulent transactions, ensuring that businesses can carry out transactions securely without worrying about potential financial losses. Razorpay offers a frictionless payment experience to customers by smartly skipping authentication for trusted transactions. This sets us apart from our competitors.
As a result of all of this, the Fraud to Sales ratio on Razorpay platform has been the best in the country.
Support for international alternative payment methods
We understand that customers need more convenient and flexible payment methods beyond cards. Hence, we have expanded our payment options to support Trustly, POLi, SOFORT, and Giropay. These methods have improved the success rate of international payments by providing greater convenience and flexibility to customers.
Unlocking Global Markets: Indian exporters accepting international payments
For Indian businesses looking to expand their horizons and accept international payments, Razorpay is the ideal payment partner. We prioritize the safety of our customers by offering a high success rate with the highest level of protection against fraud and chargebacks.
It (Razorpay) was one of the best onboarding experiences we had ever had with any third party provider for international payments . Just one line of code made us go live.
Puneet Gupta, Founder and CEO, Astrotalk
We also ensure a smooth transition for our customers in complying with new regulatory requirements, so that your business can thrive in international geographies. If you’re an Indian exporter in search of a reliable payment partner, look no further than Razorpay!
For more information on Razorpay’s international payments, click here. If you’re already a Razorpay user, simply visit your dashboard for more details.
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