Seamless Payments in a Digital World
Online transactions are reshaping the payments landscape. As the pandemic-driven shift to e-commerce accelerates, consumer preferences and expectations are evolving. Merchants who adapt quickly could unlock new opportunities and revenue streams. To succeed, they must pay attention to the finer details.
Central to that is ensuring seamless transactions. When customers attempt to make purchases on e-commerce websites, each transaction must be authorized by the consumer’s card network and their card’s issuing bank. Declined authorizations deter them from completing their purchases. Thus, selecting the right payments partner is crucial for boosting authorization rates and, in turn, conversion rates and revenue volumes.
Merchants must also cater to consumer expectations. While convenience, security, acceptance and processing speed are baseline expectations regardless of payment method, consumers expect more from international e-commerce sites; 31% prefer a payment method that lets them shop securely from anywhere and 21% seek purchase protection, according to PayPal’s 2021 Borderless Commerce Report.1 Both are important for merchants who aim to tap into the rapidly growing cross-border commerce market.
Cross-border online shopping became an embedded habit during the Covid-19 pandemic, with more than half those surveyed for PayPal’s Borderless Commerce Report saying they had purchased at both domestic and international sites last year.2 The report showed that 22% of consumers in the 13 markets surveyed became more comfortable with cross-border shopping since the pandemic.3 Coupled with the number of new online shoppers and higher total spending per shopper, that sentiment bodes well for cross-border merchants.
To capitalise on this opportunity, merchants must ensure they offer the payment options that consumers desire. Doing so increases conversion rates. Smartphones, for instance, were the preferred device for online shopping across all markets surveyed.4 As people use them to shop on the go, they expect faster transactions. Digital wallets make that possible by reducing data entry on small handheld devices, expediting the purchase process. Globally, the number of unique digital wallet users is on track to exceed 4.4 billion by 2025, up from 2.6 billion in 2020.5 Mobile wallets continue to lead this growth.
While the payments landscape will continue to evolve, consumer preferences and adoption rates of new payment methods will vary by market. Thus, it’s important for merchants learn more about specific markets to determine which payment preferences and shopping innovations make sense. Access PayPal’s Borderless Commerce Report to learn more about the payments landscape in 13 of the world’s most vibrant e-commerce markets for your cross-border journey.
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