The European e-commerce market was estimated to be worth over €700bn by the end of 2020, with nearly a quarter of the value of e-commerce transactions being generated by cross-border shopping.
While the pandemic has driven significant uplift for e-commerce all around the world, it has also boosted the number of people buying from other countries. A recent report from the International Post Corporation shows that 32% of cross-border shoppers from 40 countries purchased more from cross-border merchants in 2020 and that 51% expect to do so more often in the future.
While the e-commerce world is increasingly borderless, and the prospect of cross-border sales opportunities are increasingly enticing for merchants, every opportunity has its challenges. Naturally, merchants need to manage the operational logistics of fulfilling orders to overseas customers, but it takes more than good marketing and a robust delivery network to be a successful cross-border business.
Top 3 payment must-haves for cross-border merchants
Assuming that a merchant has managed to attract prospective cross-border shoppers to its website, there are a number of considerations to factor into the purchasing experience to make sure those customers complete a purchase (and preferably return again).
Here are our top 3 must-haves when it comes to the payments process for cross-border merchants:
1. Support the right languages and currencies
There’s nothing more frustrating for shoppers than spending trying to figure out exactly what they’re purchasing and how much it is. Transparency and familiarity are key to building trust – ensuring shoppers can easily understand the checkout process, view pricing and pay in their local currency. This can make a huge difference in conversion rates.
2. Offer the right payment methods
Most customers will have a preferred payment method – whether that is a card, an e-wallet or a bank transfer option. Offering a customer’s preferred payment method can significantly boost conversion and customer lifetime value. Naturally, it’s impossible to offer every single payment method, especially when many countries have their own domestic schemes, but it’s of enormous value to offer the top three most popular payment methods in each market.
Your payment partner should be able to advise on which payment methods are important in each country. For example, pay-by-invoice is one of the most popular payment methods in Germany, while online bank transfer is the preferred method in the Netherlands and the UK is dominated by cards.
3. Tailor your fraud strategy
Just as fraud differs across channels, it also varies in different geographical areas and fraudsters often transact across borders, especially when they’re part of a bigger fraud ring, or they’re testing stolen cards. While tailoring your fraud strategy to cater for each market is important for minimizing risk and losses, it’s equally important to make sure you don’t inadvertently decline orders from genuine customers.
Having a fraud strategy that doesn’t reflect the customer trends in each country, or have rules that are too strict, can result in a high number of false positives and damaged customer relationships.
If you’re an e-commerce merchant looking to expand your offering across borders and you need some advice, get in touch with us at firstname.lastname@example.org.