This month, Credorax has been spotlighted by PaymentEye to share its wisdom on cross-border ecommerce’s effect on PSPs. Below are a few important takeaways from the article we thought you would enjoy. To read the full article, visit: www.paymenteye.com.
Retail Sales, All-Time High
Retail sales worldwide are at an all-time high. According to data from eMarketer, total retail sales hit $22 trillion worldwide in 2016, up 6% over 2015. That figure is estimated to exceed $27 trillion by 2020 (excluding travel, event ticket and restaurant sales).
Retail sales are growing too – although the growth rate is predicted to peak at 6.3% in 2017, trending downwards towards the end of the 2010s, the market is expected to deliver strong numbers over the next five years.
Ecommerce Makes up Majority of Growth
Although overall growt
h is slowing in line with the rest of the retail market, ecommerce is predicted to make up an increasingly large proportion of total retail sales.
Accounting for 7.4% of that total in 2015, retail ecommerce sales across all devices will reach $2.3 trillion worldwide in 2017, rising to a whopping $4 trillion by 2020 (representing 14.6% of total retail sales).
This should come as no surprise, as over half of all internet users worldwide – more than 24 percent of the global population – made at least one purchase via a digital channel in 2015.
Cross-Border, Heart of Ecommerce Growth
A growing proportion of this trade is cross-border. As tech advances make it easier for merchants to market to customers beyond their domestic borders, the pressure for merchant acquirers to deliver fast, secure and cost-efficient cross-border payments is higher than ever.
DHL Express reports cross-border sales volumes are predicted to increase at an annual average rate of 25% – from $300 billion to $900 billion – between 2015 and 2020.
PSPs Need to Support Cross-Border for Merchants
PSPs should be able to service the cross-border needs of their merchants if they are to stay competitive. Merchants now expect to pay least-cost routing and local fees for cross-border transactions at minimum. PSPs must have in-depth knowledge of regional preferences and compliance regulations. In addition, merchants expect the lowest costs and transparent pricing models as standard. While an acquirer can’t solve every cross-border issue that arises, selecting the right one can definitely enable their cross-border goals.
Acquirer Checklist: The Essentials Every PSP Should Look For
- Cross-border reliability: seamless connection of the PSP’s merchants to cross-border
- Knowledge of cross-border commerce: an understanding of regional preferences, rules, and new regulations.
- Currency capability: ability to handle multiple currencies and provide the lowest domestic rates for cross-border e- and m-commerce transactions.
- Multi-device: full cross-channel international sales, enabling merchants to connect and sell to customers on every type of device – especially mobile.
- Risk protection: ecommerce risk and fraud should be safeguarded against risks, and the latest threats to mobile commerce understood.
- Flexibility: support a wide range of payment methods and ability to deliver an updated service in response to new market trends.
The cross-border ecommerce market provides a unique opportunity for PSPs to move beyond their traditional roles by providing cross-border options for their merchants, but partnering with the right merchant acquirer must be the first step.
To learn more about selecting the right merchant acquirer, download PSPs: Why Does Your Choice of Acquirer Determine Future Success at Paymenteye.com here.
