The concept

A transaction is cross-border when the buyer and the recipient are in different countries. From the issuing bank's point of view, it arrives flagged as international, and that alone already increases the chance of a decline.

Three things change at once. The cost, because card networks charge an extra fee on cross-border transactions. The approval, because the issuer applies stricter fraud rules. And the experience, because the buyer may see the charge in a foreign currency and still pay IOF or a fee from their own bank.

Processing locally in the buyer's country, when possible, is what removes the international flag and recovers a good part of the lost approval.

How it shows up in practice

A US buyer tries to pay for your course and gets a refusal. You check with him by email and see the card was flagged as possible fraud because it came from California to a server in Brazil. His bank applied stricter rules because it saw the transaction leave the country.

We see our customers as invited guests to a party, and we are the hosts. It is our job every day to make every important aspect of the customer experience a little bit better.

Jeff Bezos Source: Jeff Bezos's letters to Amazon shareholders.

Cross-border increases cost because networks charge extra tariff, and worsens approval because the buyer's bank rejects more. When possible, processing locally in the buyer's country, using an acquirer or payment partner in the same country, removes the international mark and recovers much of the approvals you'd lose.