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 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 growth 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.