A new report by Payvision and Juniper Research, entitled ‘Key Business Drivers and Opportunities in Cross-Border e-Commerce 2017‘, examines the results of a survey of key industry players around the game-changing developments, major challenges, and best-practices for going cross-border.
Online marketplaces and consumer technology are paving the way for growth. That’s according to global acquirer and data-driven omnichannel solutions provider Payvision. In its fifth annual cross-border ecommerce research report, produced in collaboration with Juniper Research, Payvision presents the findings of its recently conducted survey of various industry figures. Compared to the previous year’s findings, the report reveals an exciting new context for global cross-border trade.
The predicted compound annual growth rate for the coming three years for cross-border ecommerce has risen to 17%, compared to just 12% for ecommerce overall. In the past year, merchants have come to view cross-border ecommerce more positively – half of respondents agreed and just under a third strongly agreed that cross-border ecommerce is profitable.
The main driver of cross-border ecommerce growth indicated by surveyed merchants was the accelerated development of online marketplaces. This was a change from last year, in which mobile commerce was considered the most important growth factor. Payvision’s research contends that marketplaces will control 39% of the world’s entire ecommerce market by 2020.
Despite the promising growth forecasts, several regulatory measures introduced by the EU pose major challenges, especially for international marketplaces. The upcoming revision to the Payment Services Directive (PSD2), which will take place in January 18, will require all merchants operating under a marketplace business model to acquire a payment institution license. The costs and effort associated with acquiring this license will undoubtedly have a major impact on the business activity of merchants. Payvision stresses that the most preferred solution will be to partner with a compliant solution provider.
“Acting as a link between buyers and sellers, online marketplaces have created an incomparable level of security and usability for the involved parties that better support merchants in their international expansion. However, these operators are currently confronted with regulatory changes predicted to severely impact their business. We are well-equipped to take away the regulatory complexity with SlicePay, our PSD2 compliant payment solution, and enable the marketplace to focus on growing their business across many regions and reaching new consumers.”
– Cheng Liem Li, CCO, Payvision Group
Modern developments in consumer technology like Artificial Intelligence (AI), machine learning, Internet of Things (IoT), data science, blockchain, and so forth, enable merchants to reach their cross-border customers in a way that was previously not possible. In addition, consumer expectations for shopping experience are now higher, which means merchants must continue to reinvent ecommerce strategies to meet their demands.
Another major takeaway from the report is the impact of business and geopolitical developments on global cross-border trade. With the UK and US facing political turmoil around Brexit and the Trump presidency, China has taken the lead and become the hub for the globalization of retail. China has invested heavily in the One Belt, One Road (OBOR) trade route, which will reportedly connect 62% of the world’s population.
- Cross-border ecommerce is growing faster than domestic ecommerce and ecommerce overall.
- While the US and UK seem to increasingly be looking inward, China is now the hub for globalization of retail.
- Consumer technology is the key to better customer experiences and intelligent usage of consumer data.