By crossborderfees June 17, 2025
In today’s global economy, businesses are increasingly operating across borders, selling products and services to customers around the world. However, one of the challenges that merchants face when conducting cross-border transactions is the high fees associated with processing payments in foreign currencies. These cross-border merchant fees can eat into profits and make it more difficult for businesses to compete in international markets.
One way to avoid these fees is to set up local acquiring, which involves partnering with a payment processor in the country where the transaction takes place. By processing payments locally, merchants can avoid cross-border fees and provide a better experience for their customers.
In this article, we will explore how to set up local acquiring to avoid cross-border merchant fees, including understanding cross-border fees, the benefits of local acquiring, how to set it up, choosing the right partner, common challenges, FAQs, and a conclusion.
Understanding Cross-Border Merchant Fees
Cross-border merchant fees are charges that are incurred when a transaction is processed in a foreign currency or through a foreign payment processor. These fees can include currency conversion fees, international transaction fees, and cross-border processing fees. For merchants, these fees can add up quickly and eat into profits, especially for businesses that conduct a high volume of international transactions.
By setting up local acquiring, merchants can avoid these fees by processing payments in the local currency and through a local payment processor. This can result in significant cost savings and a better experience for customers, who may be more likely to complete a purchase if they are not hit with unexpected fees.
What is Local Acquiring?
Local acquiring is the process of partnering with a payment processor in the country where the transaction takes place. This allows merchants to process payments in the local currency and avoid cross-border fees. By setting up local acquiring, businesses can provide a seamless payment experience for customers and reduce costs associated with international transactions.
Benefits of Setting Up Local Acquiring
There are several benefits to setting up local acquiring to avoid cross-border merchant fees. Some of the key advantages include:
1. Cost savings: By processing payments locally, merchants can avoid cross-border fees and save money on each transaction.
2. Improved customer experience: Customers appreciate being able to pay in their local currency without incurring additional fees, which can lead to higher conversion rates and customer satisfaction.
3. Faster transactions: Processing payments locally can result in faster transaction times, which can improve cash flow and streamline operations.
4. Compliance with local regulations: By partnering with a local payment processor, merchants can ensure that they are compliant with local regulations and avoid potential legal issues.
Overall, setting up local acquiring can help businesses save money, improve customer satisfaction, and streamline operations.
How to Set Up Local Acquiring
Setting up local acquiring involves several steps, including choosing the right partner, negotiating fees, and integrating local acquiring into your payment system. Here is a detailed guide on how to set up local acquiring to avoid cross-border merchant fees:
1. Research local payment processors: Start by researching local payment processors in the country where you conduct the most transactions. Look for processors that have a good reputation, competitive fees, and a track record of working with businesses in your industry.
2. Contact potential partners: Reach out to potential partners to discuss your needs and negotiate fees. Ask about their experience working with international merchants and inquire about any special services they offer for businesses like yours.
3. Review contracts: Once you have selected a partner, review the contract carefully to ensure that all terms and fees are clearly outlined. Make sure to ask about any hidden fees or additional charges that may apply.
4. Integrate local acquiring into your payment system: Work with your IT team or payment processor to integrate local acquiring into your payment system. This may involve updating your website or POS system to support local currencies and payment methods.
5. Test transactions: Before going live, test transactions to ensure that everything is working correctly and that payments are being processed in the local currency.
By following these steps, you can set up local acquiring to avoid cross-border merchant fees and provide a better experience for your customers.
Choosing the Right Local Acquiring Partner
Choosing the right local acquiring partner is crucial to the success of your business. Here are some tips for selecting the right partner and negotiating fees:
Negotiating Fees with Local Acquiring Partners
When negotiating fees with local acquiring partners, it is important to be prepared and have a clear understanding of your business needs. Here are some tips for negotiating fees with local acquiring partners:
1. Compare fees: Before entering into negotiations, compare fees from multiple partners to get a sense of the market rate. This will give you leverage when negotiating with potential partners.
2. Be transparent about your volume: Be upfront about your transaction volume and revenue projections, as this can help partners tailor their pricing to your needs.
3. Ask about discounts: Inquire about volume discounts or special promotions that may be available for new customers. Some partners may be willing to offer lower fees to attract your business.
4. Consider long-term partnerships: If you plan to work with a partner for an extended period, ask about long-term pricing agreements or loyalty discounts.
By negotiating fees with local acquiring partners, you can ensure that you are getting the best deal for your business and avoid overpaying for payment processing services.
Integrating Local Acquiring into Your Payment System
Integrating local acquiring into your payment system is a critical step in setting up local acquiring to avoid cross-border merchant fees. Here are some tips for integrating local acquiring into your payment system:
1. Work with your IT team: Collaborate with your IT team or payment processor to ensure that local acquiring is seamlessly integrated into your existing payment system.
2. Update your website or POS system: Make sure that your website or POS system supports local currencies and payment methods to provide a seamless experience for customers.
3. Test transactions: Before going live, test transactions to ensure that payments are being processed correctly and that customers are not experiencing any issues.
By following these tips, you can successfully integrate local acquiring into your payment system and avoid cross-border merchant fees.
Common Challenges with Local Acquiring
While setting up local acquiring can provide many benefits, there are also some common challenges that merchants may face. Here are some of the most common challenges with local acquiring and how to overcome them:
Overcoming Language and Currency Barriers
One of the challenges of setting up local acquiring is overcoming language and currency barriers. When working with a payment processor in a foreign country, merchants may encounter language barriers that can make communication difficult. Additionally, processing payments in a foreign currency can lead to confusion and errors if not handled properly.
To overcome these challenges, merchants should:
1. Hire local staff: Consider hiring local staff who are fluent in the language of the country where you are setting up local acquiring. This can help facilitate communication and ensure that there are no misunderstandings.
2. Use translation services: If hiring local staff is not feasible, consider using translation services to ensure that all communications are clear and accurate.
3. Offer multiple currency options: To accommodate customers who prefer to pay in their own currency, consider offering multiple currency options on your website or POS system.
By taking these steps, merchants can overcome language and currency barriers when setting up local acquiring and provide a better experience for their customers.
Navigating Banking Regulations
Another common challenge with local acquiring is navigating banking regulations in foreign countries. Each country has its own set of regulations governing payment processing, and merchants must ensure that they are compliant with these regulations to avoid legal issues.
To navigate banking regulations when setting up local acquiring, merchants should:
1. Consult with legal experts: Seek advice from legal experts who are familiar with banking regulations in the country where you are setting up local acquiring. They can help ensure that you are compliant with all relevant laws and regulations.
2. Stay informed: Stay up to date on changes to banking regulations in the country where you are operating to ensure that you are aware of any new requirements or restrictions.
3. Work with reputable partners: Partner with reputable payment processors who have experience navigating banking regulations in the country where you are setting up local acquiring. They can help guide you through the process and ensure that you are compliant with all regulations.
By following these tips, merchants can navigate banking regulations when setting up local acquiring and avoid potential legal issues.
FAQs
Q: What are cross-border merchant fees?
A: Cross-border merchant fees are charges that are incurred when a transaction is processed in a foreign currency or through a foreign payment processor. These fees can include currency conversion fees, international transaction fees, and cross-border processing fees.
Q: How can setting up local acquiring help me avoid cross-border merchant fees?
A: By setting up local acquiring, merchants can process payments in the local currency and through a local payment processor, avoiding cross-border fees associated with processing payments in foreign currencies.
Q: What are some benefits of setting up local acquiring?
A: Some benefits of setting up local acquiring include cost savings, improved customer experience, faster transactions, and compliance with local regulations.
Q: How can I choose the right local acquiring partner?
A: When choosing a local acquiring partner, consider factors such as reputation, fees, experience working with international merchants, and special services offered for businesses in your industry.
Q: What are some common challenges with local acquiring?
A: Some common challenges with local acquiring include language and currency barriers, navigating banking regulations, and ensuring compliance with local laws.
Conclusion
Setting up local acquiring is a smart strategy for businesses looking to avoid cross-border merchant fees and provide a better experience for their customers. By partnering with a local payment processor in the country where transactions take place, merchants can process payments in the local currency and avoid costly cross-border fees.
While there are some challenges to overcome, such as language barriers and banking regulations, the benefits of setting up local acquiring far outweigh the drawbacks. By following the tips and strategies outlined in this article, businesses can successfully set up local acquiring and enjoy cost savings, improved customer satisfaction, and streamlined operations.