Top challenges for eCommerce Leaders include payment localization, compliance, and cybersecurity
PRESS RELEASE: MOUNTAIN VIEW, CALIFORNIA – Rapyd, a global FinTech-as-a-Service provider, today announced the results of its inaugural 2019 State of Cross-Border eCommerce: U.S. Merchant Outlook, which found that most U.S. business units (91%) prioritize cross-border sales as a key growth area but struggle to execute on the opportunity.
According to the study, nearly 50% of U.S. companies surveyed currently have 80% or more of their eCommerce revenue coming from North America, revealing that the cross-border opportunity, hasn’t been fully tapped by U.S. merchants. However, modern, global merchants struggle to manage risk, reduce costs and implement technology that can provide connectivity and redundancy while optimizing the customer experience. 30% of respondents cited cybersecurity as the top risk in cross-border payments.
Less than one-third of merchants have fully implemented basic industry tools for cross-border success such as “local customer support” (27%) and “local card scheme acceptance” (25%) across relevant geographies. Moreover, only 18% have fully implemented local cash acceptance or COD for online transactions in relevant geographies.
Poor user experience also contributes to the sub-optimal conversion rates for cross-border buyers. Cross-border eCommerce conversion rates slip when digital properties such as apps and websites fail to localize the user experience.
“Global cross-border eCommerce is estimated to reach $1 trillion in 2020 but most global retailers are completely unprepared to tap this massive market opportunity,” said Arik Shtilman, Co-founder & CEO of Rapyd. “Merchants that desire a bigger footprint and more customers need to have the tools in place and the persistence required to expand global sales. Using technology that enables hyper-local payments to consumers doesn’t need to be a complex initiative.”
- Merchants are prioritizing cross-border sales. 91% of merchants say that cross-border sales are a “moderate” to “high priority” over the next year. 46% of respondents believe they have fully penetrated existing markets; 56% are looking to expand outside the U.S., and 44% are pursuing cross-border payment capabilities citing concerns about lagging competitors. Only 5% of U.S. merchants listed cross-border sales as a low priority.
- Online merchants prioritize mobile experience and global payments. 20% of respondents cited improving their mobile customer experience as the highest priority, followed by 13% who cited, “increasing payment methods,” and 10% who cited expanding “cross border selling initiatives.”
- S. merchants are bullish on North American sales over the next year. Most merchants (51%) expect their North American revenue to increase over the next year. Nearly a quarter of U.S. merchants (24%) believe they are missing the EU cross-border opportunity.
- S. Merchants eye APAC and LATAM for growth. 38% of merchants expect growth from LATAM over the next year. 41% are expecting growth in APAC. In Latin America, Brazil will remain the largest retail eCommerce market, according to respondents.
- Cybersecurity leads merchants’ cross-border risk concerns. Global merchants face an increasingly complex array of threats such as cyber theft, fraud, regulatory and commercial espionage, which can drain millions of dollars from their profits and damage a brand.
- Creating engaging local customer experiences tops merchants’ cross-border challenges. 38% cited local customer experiences as their top challenge, including building a local digital presence, website/URL, language and currency presentation as well as understanding local regulations. Only 22% of respondents cited acquiring new customers in local geographies as their top operational challenge.
- Offering local card scheme acceptance critical to cross-border success. Overall, respondents listed many localization tactics as ‘very important,” but local card and debit network acceptance was cited very important’ most often at 64% as most local cards around the globe require that the merchant have a local entity to process the cards.
About the study
In May 2019, Rapyd conducted a research study to understand the challenges and opportunities of U.S. mid-size and enterprise merchants are facing when expanding their online businesses cross-border. The company surveyed 600 respondents consisting of senior-level decision-makers with eCommerce and payments responsibilities at companies with 500+ employees. To access the full report, visit go.rapyd.net/cross-border.
Rapyd helps businesses create seamless local commerce experiences anywhere. We empower eCommerce, technology firms, and marketplaces to scale worldwide with our fintech-as-a service platforms: Collect, Disburse, Wallet and Issuing. By accessing the Rapyd Global Payment Network, businesses can now focus on growing new markets rather than building infrastructure. Investors include General Catalyst, Stripe, Target Global and others. For more information, visit www.rapyd.net.