Alistair Singer, Senior eCommerce Manager at Barclaycard, examines what’s in-store for the cross-border payment industry this year.
The potential of cross-border eCommerce (CBEC) and the practice of buying and selling goods across international borders, is huge. With an increasing appetite for CBEC and cross border mobile commerce (CBMC), retail ecommerce sales as a whole are expected to approach $2.4 trillion in 2017.
To date, the US has claimed a large share of global m-commerce sales by volume, with Latin America, Europe and China also enjoying considerable growth; for example, mobile shopping in China saw an uplift of over 200% last year. China in particular remains a key driver of overall CBEC growth, with an anticipated $111 billion being spent on non-domestic websites by Chinese shoppers in 2017.
By 2020, it’s expected that some 940 million online shoppers will spend almost $1 trillion on cross-border e-commerce transactions. The rising number of purchases made on devices like smartphones and tablets in particular will continue to help propel this growth, with shoppers taking advantage of being able to quickly and easily purchase goods whilst they’re on the go.
Looking ahead, at Barclaycard we’ve explored ways for merchants in the UK to take advantage of this growth by establishing or expanding their footprint in the CBEC market in the coming year.
How UK retailers can capitalise on CBEC in 2017
To attract international customers and stay on top of the growing demand for CBEC, my three top tips for UK retailers are to: Provide easier methods to shop online, tailor the experience to local consumers, and ensure they are offering a secure service to comply with industry regulations at home and abroad.
Innovate, then innovate some more
Keeping up with international demands is key to attracting and maintaining global shoppers. Whilst many retailers acknowledge the changing face of retail, all too often they do not move fast enough to keep ahead. For example, research from Barclays revealed that 70% of retailers do not provide a mobile-friendly website or app, despite Barclaycard research showing that nearly a quarter (24%) of consumers are more likely to choose a retailer if they can shop via an app or mobile website.
With an increasing number of consumers browsing the web on their mobiles, merchants need to build online journeys that work on any device. Offering a quick, sleek mobile experience may encourage tech-savvy consumers from China, smartphone-oriented shoppers in Latin America and efficiency-minded American customers to buy from a UK business. Creating a mobile-optimised site, introducing an app or streamlining payments through tools such as thumbprint-recognition authorisation that allow payments to be made in one-click, are all ways to deliver user-friendly m-commerce options.
Consider localising – globally
While CBEC means catering to an international audience, this doesn’t have to mean sacrificing a localised service. To attract customers in other markets, ensure that customers can make purchases in their own currency and language. For example, a geo-located payment system, which identifies the consumer’s country of origin based on their phone’s location, speeds up the checkout process by automatically updating currency and delivery options – saving customers the time and extra step of selecting these manually. Developing a site that offers checkout options in different currencies may appear a complex process, but many payment providers can help online merchants to navigate the process.
The importance of localisation is even being recognised by international logistics companies. In recent months, companies including FedEx and UPS have bought smaller delivery companies in priority markets in an attempt to gain better access to local areas. Merchants should stay mindful of these developments in the logistics industry, as they have the potential to provide new opportunities for cross-border delivery.
Many businesses are looking to other economies to take advantage of growing consumer spending power. However, while this brings with it new opportunities for merchants, ‘card not present’ payment fraud is expected to continue to increase over the next three years, particularly for cross border payments.
When handling CBEC transactions, merchants need to ensure that they have implemented all the payment security options available to help protect them and their consumers. 3D Secure, the payment industry’s authentication tool for online purchases, can help with this by flagging any unusual transactions, based upon where the transaction originated, its value and where the purchasing card was issued. To get the best security for their CBEC and CBMC needs, merchants should consult a payment expert for advice.
CBEC may take some effort to perfect, but as the demand for e- and m-commerce grows, it is worth taking the time to get it right. Doing so can enable a business to expand into new territories and ultimately boost their bottom line. The growth of CBEC is only set to continue in 2017, so retailers should take the opportunity to improve their offering in order to attract a growing customer base.
The Second Payment Services Directive (PSD2) is a payments regulation in Europe, which is set to drastically impact the infrastructure for banks, fintechs and businesses using payments data by opening up access to third party providers.
For e-commerce marketplaces, user experience has long been a prime focus. From aesthetic quality to ease of use, UX plays a major role in determining whether consumers stick with the platform long-term or abandon it in favor of a competitor.
The failure to keep pace with expanding compliance procedures has seen a rise in the number of financial penalties issued by regulators over the past few years. As anti-money laundering (AML), know-your-customer (KYC), counter-terrorism financing and other compliance obligations expand across different territories, organisations large and small have struggled to maintain adequate and comprehensive safeguards – often resulting in sizable fines and significant reputational damage.
A new report published by Earnix shows findings stating that most millennials will use a single portal to aggregate services from multiple banks with which they have existing customer relationships in the future. The report, The Role of Analytics in the New Banking Age 2017, also states that most banks believe predictive analytics and machine learning will become the most powerful way to win back customers over the next five years.