Driven by the continued expansion in global e-commerce, cross-border payments are growing fast. Wholesale, B2B and B2C cross-border payments are expected to reach a combined value of USD290 trillion by 2030 (compared with USD190 trillion in 2023). Consumer cross-border payments are expected to undergo the fastest growth over the coming years, expanding by roughly 80 percent between 2023 and 2030. (Source: Statista)
Global businesses need a powerful cross-border payments strategy that addresses performance, compliance, and convenience, in order to enjoy sustained, profitable growth – especially as they expand beyond developed markets into emerging markets.
A pathway to global growth
Once e-commerce businesses have established themselves in developed markets – with their stability, established infrastructure, and solid consumer bases – they typically move on to target high-growth markets.
High-growth markets are characterized by:
Untapped potential – unlike mature markets, these markets have not reached saturation, and offer e-commerce businesses access to a vast pool of new customers.
Explosive growth – many of these markets boast impressive Compound Annual Growth Rates (CAGRs). For example, the Latin American region is forecasted to have a CAGR of 23% in the coming years (source: PCMI).
This makes high growth markets key to any long-term growth strategy. However, entering these markets requires a robust cross-border payment strategy, with a strong element of localisation that ensures e-commerce businesses address the individual characteristics – and challenges – of each market effectively.
Three key expansion challenges … and how to address them
There are three main challenges faced by global businesses as they enter new markets.
Local regulations – each country has its own financial regulations, compliance requirements, and legal frameworks. It is crucial that e-commerce businesses navigate the regulatory landscape of each target market individually. Compliance with anti-money laundering (AML) laws, data protection regulations, and tax obligations is essential to avoid legal risks and build trust with customers and partners.
Payment performance – low approval rates, high interchange fees, and currency exchange fluctuations can all have a significant impact on e-commerce businesses’ profitability, and discourage cross-border purchases.
To enhance transaction approval rates and customer satisfaction, global businesses need to offer local payment methods and support multiple currencies. Processing payments via local acquirers can increase the likelihood of transaction approvals, and optimise processing costs. This localised approach builds trust with customers, and ensures smoother payment experiences.
Convenience – expanding into a new market is complex and time-consuming. It involves additional integrations, reporting, and remittances, making the process more intricate than it may initially appear.
Simplifying operations through a single integration point enables e-commerce businesses to manage payments across multiple markets efficiently. A centralised remittance model, with a single PSP contract, can reduce administrative overhead and make it easier to scale operations.
Tailored approach
A one-size-fits-all payment strategy will not work in today’s globalised markets. Each market demands a tailored approach, taking regulations, payment preferences, and local customs into consideration. This is why many e-commerce businesses turn to an experienced Payments Service Provider (PSP), like Worldline, to help them navigate these complexities and provide tailored solutions for each market.
Our approach is to partner with local PSPs or acquirers worldwide, following an in-depth market analysis to understand local payment preferences, compliance requirements, and processing needs. Through these local partnerships and in-market payment experts, Worldline offers end-to-end solutions that cater to the complex requirements of cross-border payments. These solutions optimise approval rates, reduce costs, and minimise foreign exchange (FX) risks, all while managing fund exchange and remittance efficiently.
Additionally, Worldline’s centralised reporting and reconciliation technology provides e-commerce businesses with easy access to payments data, enabling them to monitor performance and make adjustments to their payment systems as needed.
Real-world success stories
Worldline’s tailored solutions have helped global businesses achieve significant business goals.
In South Korea, a large online retailer increased its approval rates by up to 20%, while a leading game developer saw an improvement of up to 5%. By partnering with a local PSP, Worldline enabled local card processing, increased approval rates, and eliminated cross-border surcharges.
Click here to find out more about Worldline’s global payments solutions.
