Customers’ shopping habits continue to evolve amid a worldwide reopening of storefronts, but the global cross-border payments market remains in full swing, with volume expected to reach $156 trillion in 2022 — and offering alternative, yet familiar, payment methods to consumers can be a powerful way for merchants to bring in first time customers.
If a buy now, pay later (BNPL) option were available, for example, 54% of online shoppers say they would be more willing to make purchases from a company in another country; and digital wallet payments are now tired with credit cards as the most preferred payment method worldwide, according to PYMNTS’ recent Cross-Border Retail Payments Tracker®. Nearly 45% of consumers are also expected to use cryptocurrency for cross-border payments within the next two years.
Read the tracker: Cross-Border Retail Payments: Beauty Product Brands See Consumer Payment Choice as Driver of Global Sales
Recent data suggests that 20% of eCommerce transactions likely will be made across borders over the next four years, with the United Kingdom representing a particularly compelling market as 18% of Chinese consumers and 12% of U.S. consumers say make purchases from U.K. retailers at least once a month. More than half of consumers have made cross-border purchases during the pandemic.
Still, PYMNTS’ research says price concerns are still an issue, with 69% of consumers saying they occasionally or frequently abandon their carts at checkout if costs are too high, and 59% of online shoppers say they are not willing to give a retailer in another country a second chance if they’re unsatisfied with their initial purchase.
The Cross-Border Retail Payments Tracker®, done in collaboration with Citcon, examines the latest developments in cross-border retail payments to determine how international retailers can boost eCommerce revenue and increase customer loyalty by tailoring their payments technology to meet the demands of each market they serve.
Na’Imah Muhammad, owner of wig and hair extension retailer Brazilian Bundle Me, told PYMNTS in a recent interview that as a brand catering to shoppers globally, “accepting a variety of payments has been a game-changer … making it nearly impossible to miss a sale.”
“Overall, it is my expectation that consumers will continue to use the most convenient form of payment presented,” she said.
Related: Beauty Product Brands See Consumer Payment Choice as Driver of Global Sales
Smoother cross-border eCommerce also requires streamlining regulations that underpin global payments. Kristalina Georgieva, managing director of the International Monetary Fund, told global policymakers during a September address the time is now implement regulations that could encourage the use of cross-border payments.
“We must therefore fix all major hurdles at once, and ensure that solutions are interoperable between countries,” she said. “The alternative — a piecemeal roll-out that would frustrate businesses and consumers — is really not a good approach.”
See also: Deep Dive: Why Local Payment Methods Will Be Key to Cross-Border eCommerce Growth
Georgieva noted that cross-border payments currently tend to be cumbersome, opaque and expensive, which can prevent them from being accessible to some consumers. Solving these issues, she said, is becoming particularly pressing as cross-border payments’ usage ramps up, growing 5% annually.