There is no denying that e-commerce has been a dominant force behind the rise in payments. Nonetheless, cross-border payment systems have been neglected for too long, and improving their cost, speed and reliability would greatly remove frictions for digital businesses. Whilst many payment service providers have proliferated the market in the past half-decade, few truly understand and provide a full stack products dedicated to online sellers’ international growth.
Merchants already know that cross-border payments are complex. When consumers, sellers, marketplaces and suppliers are all interacting in a global arena, the secret to success is to keep it feeling as local as possible for all those involved.
E-Commerce Season Awaits
Whilst pandemic-related disruption to global supply chains caused warehouse strains and product availability issues around the world earlier this year, Amazon Prime Day has kicked off an unparalleled e-commerce retail season. The 48 hour global phenomenon spans 18 countries, and is a pivotal moment for marketplace sellers. Last year, record-breaking sales of over $7 billion in the U.S. surpassed Black Friday and Cyber Monday combined, with marketplace sellers generating $2.29 billion.
Post-pandemic, online marketplaces such as Etsy, Amazon, Shopee or eBay have truly become the new virtual mall, presenting a lifeline opportunity for retailers to grow their business in an economic crisis. A staggering 1 million sellers have already joined Amazon this year.
The Cross-Border Opportunity
With over 350 million products available on the Amazon marketplace alone, the allure of the global market – for both sellers and buyers alike – is clear. For cross-border merchants, events such as Amazon Prime Day have long been one of the most important events of the year. Selling cross-border, however, presents a golden opportunity that is largely untapped in the U.S. market – only 32 percent of the top 500 Amazon merchants currently sell internationally.
The ultimate cross-border seller can expose their products to an audience of half a billion consumers around the world, and reach over 170 countries. Moving forward, taking advantage of growth markets abroad is hugely valuable to maximizing seller profits, especially considering 85 percent of the world’s purchasing power falls outside America, with the likes of global spending superpowers such as the U.K., Germany, China and Japan.
By having the right network of partners in place ahead of time, sellers can side-step disrupted supply chains and dreaded stock shortages at critical moments. Partnering with the right cross-border payment companies, that specialize in convenient quick money transfers, can help merchants instantly move money to all corners of the world – from collecting international marketplace payments, to sourcing and ensuring overseas suppliers are paid on time. This saves online sellers precious time and money – crucially allowing more to be invested in important optimizations, such as effective fulfilment strategies.
Think Local
Building out cross-border e-commerce infrastructure must involve a global end-to-end payments network, and acting locally means making that network accessible and efficient for each and every dispersed seller partner. Whilst collecting funds cross-border is the most prominent pain point, sellers working in a cross-border context have both local and overseas pay out requirements. The real issue is bringing together global ambitions with the realities of operating under local conditions and regulations, and this practical perspective is indispensable.
Sellers need bridges that work both ways, so the buyer isn’t struggling to source a compatible payments method that works with their merchant of choice. Having the right payments providers with an extensive partnership of global banks and financial service providers such as Citibank or J.P Morgan — and an extremely dedicated service team on the ground – can create the perfect synergy, enabling transactions that feel local in terms of ease, yet are flowing across borders. Real-time foreign exchange offerings can also allow merchants to convert any currency, around the clock.
It is vital to ensure to cross-border merchants partner with a payments provider that puts security first – particularly in light of the recent unravelling of one of Europe’s leading fintechs, with the two most prominent risks being account takeover and merchant fraud. Payments companies utilizing technology that monitors seller behavior can effectively combat this, such as triggering an alarm and potentially blocking activity right away if a strange IP address is used to log in.
With a strategy focused on local knowledge, regulatory readiness and security, an ecosystem of seamless end-to-end cross-border transactions can be created. Crucially, merchants and online businesses choosing the right network of growth partners that enable all these services, will be catapulted towards unprecedented global domination this festive season.
