Since the onset of the Covid-19 pandemic, there has been a huge increase in the amount of cross-border payment and ecommerce sales taking place.
With in-person restrictions globally considered, it may be seen as no surprise that there was a huge uptick in ecommerce. However, as the pandemic starts to fade from view, it is becoming clearer that cross-border shopping is still expected to increase steadily. A recent Ecommerce in Europe report recently found that 216 million consumers had stated they have bought from an ecommerce site not based in their home country.
Meanwhile, the recent Cross-border Payment and Ecommerce Report 2012-2022 highlighted that the CAGR is predicted to rise above 20% for the cross-border B2C ecommerce market during 2020 to 2027, with earned revenue estimated to reach more than $4trn by 2027, and the global B2B ecommerce market expected to hit $18.57trn by 2026.
As detailed in a recent Currencycloud post, this all adds up to a world of opportunity in the cross-border ecommerce market – one which is showing no signs of slowing down. For merchants and retailers, this offers new and exciting opportunities for them to take advantage of as they move into the new hybrid world.
However, those will be most in demand will be the acquiring banks and the payment service providers, who are able to help their customers – the merchants – take advantage of these new possibilities.
The traditional market for cross-border commerce has made it tough for PSPs to optimise their cross-border offering, with the banking model for cross-border payments historically including hidden fees, delays, high costs and reconciliation issues.
Currencycloud said, “With the boom in cross-border eCommerce and a more geographically diverse client base, PSPs and acquirers will need to support a wider set of settlement currencies or face being supplanted by more agile players in the market. Similarly, with their merchants targeting an increasingly global consumer base, payment providers must be able to collect funds in more currencies or they will be seen as a hindrance to growth.”
As payment volumes are expected to continue to climb exponentially, the potential revenue opportunities of taking control of the foreign exchange are not to be avoided. With margins becoming tighter and a business landscape becoming ever more competitive, finding new revenue streams has become the order of the day.
Currencycloud concluded, ”PSPs and Acquirers can stand out in the cross-border eCommerce world by delivering additional value to their merchants. Providing multi-currency payments accounts is a very effective way of doing just that. It’s logical really. Merchants are now more likely than ever to have both customers and suppliers globally, making a multi-currency solution of increasing value to them.
“Not only should PSPs look to access competitive FX rates and optimize settlements via local payment route networks to optimize their cross-border offering, potentially the most important value-add for payment providers to offer their merchants are unique, named multi-currency accounts.”
Find the full post here.