These days, E-commerce is borderless — a trend that has only accelerated in the wake of COVID.
For acquirers and merchants, capitalizing on this trend is only possible with the right partnerships ensuring cross-border transactions are safe and easy for everyone involved.
In the first of a special two-part collaboration with our friends at Tribe Payments, Lynda Strutton, Vice President of Customer Success at Tribe Payments, and Stephane Vandenplas, Senior Payment Processing Consultant at Currencycloud, examine how this trend impacts merchants.
- Outlining the opportunity for global expansion: The pandemic as a catalyst for increased cross-border ecommerce; The challenges merchants face filling this consumer demand and the role acquirers can play in helping merchants succeed
- How cross-border payments support global expansion
- Challenges/barriers for merchants/acquirers in cross-border payments:
- The user experience
Cross-border shopping & the pandemic
E-commerce has been growing rapidly over the past few years as reflected in digital payment volumes which have doubled since 2019 with the market’s largest segment being digital commerce which boasts a projected total transaction value of US$5.46tn in 2022.
The pandemic transformed convenience into a necessity and any holdouts to the e-commerce boom were quickly converted. And for those customers who were newly reliant upon e-commerce, it didn’t matter where the goods came from, just that they arrived on time and the transactions were safe and reliable.
For international merchants, this presents a huge opportunity — but only if they can overcome the hurdles present in such cross-border transactions.
Challenges for merchants
For a merchant expanding abroad, there is no shortage of challenges they need to overcome to ensure reliable delivery and, more importantly, a stable income.
Once goods and money start crossing international borders, merchants have to contend with everything from regulatory concerns to language barriers to, perhaps the biggest obstacle of them all: payments.
“Because of the growth of e-commerce, there are new challenges all the time. And it all starts with currency.” — Lynda Strutton
For consumers who have grown increasingly accustomed to the ease and convenience of e-commerce, having to work out currency conversion rates and international tax laws are a barrier to their online shopping — these things should just work behind the scenes.
Likewise, payments need to be instantaneous — waiting days for funds to clear is an insurmountable inconvenience for those looking to trade a trip to the store for the ease of shopping in their living rooms.
The tools and know-how merchants need
In order to overcome these hurdles, merchants need to be able to accept the local currency of their customers, in real-time, and through any payment method their customers may prefer — and they need to do it all without sacrificing any efficiency; otherwise, they will never be able to beat the local competition in foreign markets.
To accomplish this, they typically need help.
“It’s really important to have the ability to sell across borders. Payment providers need to support that for their merchants.” — Stephane Vandenplas
They need a payments infrastructure designed to automatically detect and convert the customer’s local currency, provide accurate pricing and do it all in the customer’s native language. For merchants attempting to go it alone, handling all of these challenges would leave no time for what’s most important: the day-to-day operation of their business.
Both Currencycloud and Tribe offer solutions that help provide merchants the means to branch out globally, all while working so seamlessly that they can act locally from the standpoint of the customer.
Currencycloud’s cross-border payments expertise helps take all pain and complexity international borders can also inject into the processing of payments abroad. When paired with Tribe’s expertise in international markets, which helps merchants navigate the nuances of cross-border sales and bypass the steep learning curves that can often arise when breaking into new markets.
The role acquirers can play
Keep your eye on the Currencycloud social channels in the next couple of weeks for a link to the follow-up episode on Tribe’s inaugural “To Fintech and Beyond” podcast, in which Lynda and Stephane will turn their attention to how acquirers can cater to merchant’s needs while growing their own businesses internationally.
Check out the second episode of this 2 part special. Head over* to Tribe Payments podcast, To Fintech and Beyond.
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*Please note the release date of the Tribe Podcast is 27 June 2022.