Most US business lack the critical tools to fuel global expansion, a report by Rapyd has shown.
As the 2019 State of Cross-Border eCommerce: U.S. Merchant Outlook report uncovers, 91% of US business units prioritise cross-border sales as a key growth area but struggle to execute on the opportunity.
Nearly 50% of US companies surveyed currently have 80% or more of their ecommerce revenue coming from North America, revealing that the cross-border opportunity, has not been fully tapped by US merchants. However, modern, global merchants struggle to manage risk, reduce costs, and implement technology that can provide connectivity and redundancy while optimising the customer experience. 30% of respondents cited cybersecurity as the top risk in cross-border payments.
Less than one-third of merchants have fully implemented basic industry tools for cross-border success such as “local customer support” (27%) and “local card scheme acceptance” (25%) across relevant geographies. Moreover, only 18% have fully implemented local cash acceptance or COD for online transactions in relevant geographies.
Poor user experience also contributes to the sub-optimal conversion rates for cross-border buyers. Cross-border ecommerce conversion rates slip when digital properties such as apps and websites fail to localise the user experience.
Other key findings:
merchants are prioritising cross-border sales: 91% of merchants say that cross-border sales are a “moderate” to “high priority” over the next year, 46% of respondents believe they have fully penetrated existing markets, 56% are looking to expand outside the US, and 44% are pursuing cross-border payment capabilities citing concerns about lagging competitors; only 5% of US merchants listed cross-border sales as a low priority;
online merchants prioritise mobile experience and global payments: 20% of respondents cited improving their mobile customer experience as the highest priority, followed by 13% who cited, “increasing payment methods,” and 10% who cited expanding “cross border selling initiatives”;
US merchants are bullish on North American sales over the next year: 51% expect their North American revenue to increase over the next year while 24% believe they are missing the EU cross-border opportunity;
US merchants eye APAC and LATAM for growth: 38% of merchants expect growth from LATAM in 2020, 41% are expecting growth in APAC, while in LATAM, Brazil will remain the largest retail ecommerce market;
cybersecurity leads merchants’ cross-border risk concerns
creating engaging local customer experiences tops merchants’ cross-border challenges: 38% cited local customer experiences as their top challenge, including building a local digital presence, website/URL, language and currency presentation as well as understanding local regulations; 22% of respondents cited acquiring new customers in local geographies as their top operational challenge;
offering local card scheme acceptance is critical to cross-border success: local card and debit network acceptance was cited very important most often at 64%.