Mike Shafro, Chief Executive Officer at xpate, discusses some of the ways in which merchants looking to sell their goods and services in new regions can optimise the payment experience for customers.
Nowadays, customers are just as happy buying online from a merchant halfway across the continent as they are from a local one. Nearly a quarter (24%) of all ecommerce in Europe in 2019 was cross-border, a 14.4% year-on-year increase over 2018. And, in 2020, the lockdown-driven explosion in online shopping and deliveries extended to cross-border ecommerce, too. According to McKinsey & Company, the second quarter of 2020 alone has seen double-digit growth in cross-border shipment volumes and the value of merchandise sold.
The consumer appetite for cross-border ecommerce is undeniable, and for merchants the opportunity to reach new markets and customers is too good to miss. However, customers now demand the same level of speed, convenience and value from any retailer, regardless of where they are. It’s crucial that cross-border merchants looking to enter new markets, regions and territories analyse payment data to optimise conversions and ensure the entire customer experience is as seamless and easy as possible.
However, it can be hard to know where to start, especially if you don’t have the benefit of the expertise to understand the metrics. Which is why, in this article, I’m going to share some payments tips and advice for merchants aspiring to sell their products and services cross-border.
Localise your ecommerce store and checkout pages
The first thing you learn in payments is that every region has different preferences. In the Netherlands, for example, 59% of ecommerce transactions are made with the iDEAL app. In Italy, Paypal and the prepaid card service Postepay are the first and second most popular payment methods for online purchases, respectively.
Understandably, as an online merchant, you’ll want to offer the preferred payment methods for the regions and markets you want to target – otherwise customers will abandon their carts. A good payment services provider will be able to help you understand each region’s preferences and implement the appropriate payments methods. You’ll also want to let customers pay in their local currency and make sure your ecommerce site is translated into the local language. It sounds obvious but it’s absolutely crucial!
Meet the regulatory requirements for authentication
Cross-border merchants in Europe should be aware of the Strong Customer Authentication (SCA) requirements under PSD2. SCA means that every online transaction over €30 in the European Economic Area (EEA) requires two-factor authentication. If you’re a European business selling goods and services to other countries within the EEA, then SCA is something you need to take seriously.
While the aim of SCA is to reduce the amount of fraud for Card-Not-Present (CNP) purchases online, it could also create friction for customers by adding extra steps to the payment process, such as requiring users to enter One Time Passwords (OTP) received via SMS or call. This added complication can be enough to cause the customer to abandon their purchase altogether.
So it’s important to implement a 3D Secure solution, which makes it easier for merchants to share more data around every transaction to the issuing bank for authentication purposes, as well as facilitating low-friction biometric authentication measures. If the merchants share enough high-quality data, there is no need to carry out any further authentication procedures that might create friction for the customer (this is called the “frictionless flow”).
The advice here is to make sure you’re working with your payment services provider to implement a 3D Secure solution that allows you to share as many transaction data fields as possible in order to qualify most of your transactions for the frictionless flow.
Optimise the customer experience for mobile
According to Barriliance’s analysis, the highest rates of cart abandonment are on mobile (86.65%). And, when you consider that global ecommerce sales are predicted to be worth $3.56 trillion in 2021, it’s clear that merchants could leave a lot of money on the table by not optimising their mobile ecommerce sites.
One of the crucial parts of the mobile experience that needs to be optimised is the payment process. This can mean designing payment pages with mobile in mind so that customers can easily enter their debit or credit card details into the form. Often it’s as simple as making sure the form fields appear properly on a mobile device, or ensuring that the numeric pad pops up when entering the card number or CVC (although we’re all too aware of how often this doesn’t happen!). It also means allowing customers to save these details to be used instantly for future purchases.
Similarly, it’s imperative to allow payment through mobile wallets like Apple Pay and Google Pay, as well as e-wallets like PayPal. These methods are designed for the mobile experience and offer high levels of security that customers trust.
Again, a great payment services provider will be able to help you optimise your payment process for mobile to make sure you’re maximising your conversions on that channel.
The great ecommerce boom has changed consumer behaviour forever
When it comes to cross-border commerce, the opportunity is huge, but so too are the expectations that customers have of the online shopping experience – whoever it’s with.
To make sure you can make the most of selling to new regions and markets, you must localise your ecommerce site and checkout pages, implement the solutions that help you meet regulatory requirements for authentication, and optimise the customer experience for mobile. It will help you deliver a frictionless experience to the customer while also guaranteeing the security of the transaction.
However, this is just the tip of the iceberg. Merchants, especially smaller merchants, will need help to navigate the complexities of cross-border commerce. At xpate, we pride ourselves on bringing the personal touch to our relationships with clients. We have a huge amount of expertise and we’ll give you the love you need to help your business find success and growth in whichever new market you go into.
You can learn more about xpate’s all-in-one payments platform here.