An unstoppable eCommerce train can find itself delayed at border crossings, so to speak, by expanding into new regions without first making sure their payments stack is good to go, too.
Cross-border expansion is a prime growth medium for eCommerce merchants, with the global B2C eCommerce market expected to increase at a compound annual growth rate (CAGR) of 9.7% through 2028 to attain a $7.7 trillion valuation. Most merchants want a piece of that online action.
However, obstacles encountered in international expansion can involve heavy declines and chargebacks as well as fraud — all compelling reasons to review one’s current tech stack.
According to PYMNTS’ new Accelerating Time To New Markets Playbook, a Spreedly collaboration, “tapping into this global growth potential may be trickier than eCommerce merchants expect. International merchants must be able to not only accept the payment methods their local customers expect, but also ensure the capabilities they add to their payments stacks drive down costs and boost the efficiency of operating on the international stage. Payments orchestration is uniquely suited to doing just that.”
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Advantages of a Flexible Tech Stack
Looking at B2C Commerce growth projections, cross-border expansion makes more sense for eCommerce sites now than ever before.
In readying for a move into new markets, the Playbook notes that “eCommerce businesses must be able to easily add and remove capabilities to and from their payments stacks to improve efficiency, but it is difficult to know which new capabilities will yield enough return on investment (ROI) before committing to a new solution.”
As Spreedly Director of Account Management Luke Evans told PYMNTS, “An incredibly powerful enabler is payments orchestration. What payments professionals find out is that many aspects of the business — UX, mobile devices, apps, etc. — are all able to adapt to a new region’s needs. While adapting the mix of payment services to support improved authorization rates, fraud reduction [and] security is a much more difficult challenge.”
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Reducing Friction, Smartly
With recent PYMNTS research showing that international eCommerce merchants accept an average of 6.8 payment types, expanding merchants must be similarly equipped to compete.
But payment choice is one part of streamlining operations for cross-border optimization, and back-end systems play an invisible, though indispensable, role in smoothing the path ahead.
To cut costs, boost revenues, drive conversion and reduce costly declines, the Playbook notes that “merchants can alleviate such payments frictions by using solutions such as smart routing, which allows eCommerce merchants to automatically route transactions through whichever available payment gateway is most likely to successfully complete a transaction.”
As the Playbook concludes, “payments orchestration layers that leverage APIs can facilitate faster, smoother payment integrations and make it easier for international eCommerce merchants to add the payments capabilities they need to expand into new markets.”
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