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Master cross-border merchant expansion with product localization

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Steps for cross-border expansion

Expanding into new countries is a widely adopted strategy for business growth. Once companies reach maturity in their local market, exploring opportunities to operate on a multi-country or even global scale becomes an attractive path, though it presents numerous challenges. Success in global expansion requires thorough planning and strategic execution, such steps include:

  1. Market research. Start with the total addressable market (TAM) definition, understanding competitor’s strengths and weaknesses. These initial steps are important to establish a solid foundation.
  2. Regulatory and compliance analysis. Ensure that products and services comply with local regulations and consider establishing local institutions to navigate regional taxation and legal requirements effectively.
  3. Customer behavior studies. Understand cultural nuances, learning about customer needs, language barriers and market segmentation to anticipate and address potential obstacles to product adoption.
  4. Risk assessment. Identify social and economic risks in the new market and develop comprehensive migration strategies. This step is critical for safeguarding the success of the expansion and minimizing potential setbacks. 
  5. Product localization. Evaluate the readiness of the product to operate in the new country and determine necessary changes for successful expansion.

Selling into a new market

All these steps will influence the design of the products you bring to your new markets, but none will carry more weight than product localization. Product localization refers to the process of adapting a product to a new market by considering the language and specific needs of local customers. This involves tasks such as translation, adjustment of features and functionalities to align with local preferences and requirements. 

Companies must evaluate market nuances to decide the extent to which a standardized product, originally developed for other regions, can be reused in the new market. Decisions regarding localization should be made thoughtfully, as overlooking essential adaptations can lead to significant problems down the line.

Why product localization is so important

Rigorous attention to detail during the product localization step is crucial to avoid future complications. While neglecting necessary adaptations may initially seem to reduce costs and project scope during release planning, it often results in higher expenses even in the short term. Issues such as low product adoption rates, miscalculated metrics, customer churn and the need for rework can all arise, ultimately increasing costs and timing associated with the expansion. Beyond those costs, there is the first impression factor that can damage the brand and harm the new market opportunity.

Payments methods provide an excellent example to explore market nuances and assess the need for product localization. In the Latin America (Latam) market, credit card installment payments are widely embraced by consumers, especially for high-cost purchases.

Credit card installment payments power key categories

According to estimates by Americas Market Intelligence (AMI), 70% of online travel purchases in Latin America are paid for with a credit card and, depending on the country, from 10% to 65% of those transactions are made in installments. Credit card installments work as an agreement made between consumers (cardholders) and credit card issuers. 

Essentially, the credit card operates as an instant loan, paying the merchant upfront, while the transaction amount is settled in installments over time to be paid by the consumer. Offering this payment option doesn’t only enable a new payment. It also accommodates the receiving, storing and reporting of the new data (installment amount, installment quantity) and it handles consumer protection laws concerning things around product returns and the chargebacks process.

Many consumers perceive credit card installment payment as the only feasible means to acquire desired products. For ecommerce businesses, attentiveness to customer preferences and the ability to offer diverse payment methods are crucial to meet the different customer segments’ needs. This approach not only enhances sales but also boosts customer satisfaction.

Fraud prevention methods for localized payment 

Once you decide to adapt your product to suit a new market’s consumer behavior, for example, by offering new payments like credit card installments, it will be important to look at the entire consumer journey to adapt other elements involved. In a payment universe, fraud detection and prevention is a relevant element that needs special attention. There are fundamental fraud detection aspects to be evaluated when performing product localization:

  • Chargeback. Understanding the local chargeback processes and rules, and identifying nuances for different payment methods and liabilities.
  • Fraud assessment. Evaluating the regional risk behaviors enables anticipation of trends and facilitates effective onboarding of a merchant’s teams.
  • Data collection and reports. Adapting integrations to collect specific data and provide accurate reports. Updating flows to ensure the accurate processing and normalization of information.
  • Regional models. Adapting data models to account for regional behavior and implementing local data enrichment. Developing exclusive features tailored to the new market further enhances effectiveness.
  • UI adaptation. Adjusting platform interfaces to support local languages and displaying localized payment information, including currencies, enhances user experience and trust.

Expanding into a new market is not an insignificant decision. It’s a big bet with potentially a big payoff. By implementing a comprehensive plan for product localization, considering the geographical, cultural and legal differences among markets, companies can effectively strengthen their position in a new region and also prepare the way for long-term success in the expansion.  


Contemplating expanding into new markets? Let’s talk.

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Vânia Amaral

Vânia Amaral

Vânia is product manager at Signifyd. Passionate about technology, she navigates the ecommerce world, crafting customer-centric experiences.