Statista reports the number of global online shoppers between 2014 and 2018 jumped by 36%, growing from 1.32 billion to 1.79 billion people.
According to Braintree, PayPal’s mobile web payment system, cross-border shoppers also want their shopping experience to be simple and painless.
Cross-border challenges for merchants
Merchants serving these discriminating and valuable customers can find the payments landscape a big challenge.
It’s not different languages, different laws, and cultural differences. There are also huge differences in preferences for checkouts, for types of payments, shipping preferences and knowing what to provide to make paying for the product easiest.
In fact, 77% of online shoppers abandoned shopping carts at some point during 2018 according to Sale Cycle. The Baymard Institute says one of the biggest reasons for cart abandonment is checkout processes that are too long or complicated.
One big way to increase cross-border sales
Braintree partnered with research firm PYMNTS.com and looked in-depth at 183 global companies in 10 countries along with nearly 50 attributes relating to ease of use, access to information, payments, and shipping.
The research showed that companies scored an average of 58.1 on an index of 0 to 100 in Q3 2017, a small increase of 2% from Q1 one of the same year.
According to the report, “this modest increase conceals great news: The data suggests that the strategy for optimizing cross-border commerce might be simpler than previously thought.”
When it comes to payment options, less is more
Previously, merchants thought that operating internationally meant adopting regional or local payments options, adding to complexity through regulations, refunds, returns, and resolving disputes.
“The data shows that just having the top three payment methods allows merchants to handle most international transactions. Visa and Mastercard were used by 94% of merchants while PayPal was used by 79.8% of merchants. A large determinant of merchants’ success on the X-Border Index was whether they offered the top credit cards plus PayPal.”
Having too many payment options actually hurt merchants’ customer scores. Performance decreased strongly after 10 or more payments options were offered.
The numbers suggest that to serve cross-border buyers best, more local payment methods aren’t necessarily needed. “The top payments providers have already pioneered international markets and developed relationships with consumers there. In Australia, for example, PayPal has more than 7 million active accounts — almost one-fifth of the population.”
A practical approach to cross-border payments
Picking Visa, Mastercard, and PayPal — along with a few regional payment options, such as Alipay in China or iDEAL in the Netherlands may be enough payment options.
Braintree suggests merchants focus more closely on the checkout experience, making it simpler, faster and easier to use.
Reducing the number of clicks to complete a purchase will go a long way toward reducing online cart abandonment. PYMNTS.com notes that the average number of clicks to buy online in Q3 2017 dropped by 11 clicks from 20.3 in 2015.
We think Braintree’s research is onto something with a big payback for merchants who can rethink their cross-border payments protocols.
You can read more of Braintree’s payments research report here.