The cross-border payment industry is the vital lifeblood of the global economy, helping to facilitate the growth of global e-commerce as well as the growth of intricate supply chains across international borders. Following the outbreak, increase in mobility of online products and services, the rise of online consumers’ demand and an increase in B2B payments all have played a role in the increasing importance of the international cross-border payment sector , as well as the businesses who depend on it.
The leading global consultancy company, Boston Consulting Group, estimates that the global payment revenue is projected to increase year-on-year by almost 9.5 percent in 2022. This is in contrast to their forecast of 6.9 percent in the last report, which is a rapid increase despite the global issues of the past twelve months.
It is no surprise that there are enormous growth opportunities for ecommerce companies as well as the global cross-border payment business. As an example, for instance, the rate of growth in e-commerce outside of the two major markets which are China along with the United States – is expected to boost the value of cross-border transactions up to $250 trillion in 2027 According to Bank of England.
But, the industry faces several major challenges in the coming twelve months. The risk of an overall slowdown as well as inflation and interest rate hikes are expected to affect costs and consumer confidence. Many sellers and retailers on the internet feel the pinch in their profit margins. For example Amazon’s recent price hike for fulfillmentcomes in the midst that has seen unprecedented volatility in the market for many online sellers who depend upon the market.
How can e-commerce merchants prepare for the growth of 2023? These are the three most important developments they can anticipate from their partners across borders in order to control the risks of payment to boost growth in a competitive trading environment.
- One-stop shop for financial support
Traditionally, entrepreneurs of e-commerce and sellers have relied on banks for managing the entire cross-border transaction, in addition to funding to expand their businesses as well as secure inventory and recruit employees.
However, online retailers have had difficulty securing the funds they need from traditional lenders. As per CB Insights, Q1 of 2022 was the lowest total of financing to ecommerce businesses since the year the year 2000. In addition it was reported by the World Bankfound that worldwide, Small to Medium Enterprises (SMEs) are left with unmet financing requirements of around $5.2 trillion annually, that is close to 1.5 times the amount of loans available to this type of business.
Payments providers that cross borders are in a position to fill this gap and assist e-commerce sellers gain access to the flexibility of funding as well as establish digital processes that enable them to effectively trade internationally.
2023 will see an increase in the amount of companies that transact across borders develop new fintech partnerships to offer the much-needed financial options for online retailers to expand their business and expand into new regions.
- Support for go-to-market integration
Alongside helping e-commerce businesses in expanding and growing and expand, the cross-border payment providers could be instrumental in accelerating the time to market. Merchants will be able to count on their partners in order to launch new products on marketplaces online and to market their websites to customers all over the world faster and more effectively.
Innovative cross-border payment providers are strategically investing in the development of high-value, integrated services that aid in the growth of e-commerce businesses.
Marketing internationally remains one of the biggest issues that affect sales and profits of e-commerce sellers. Forrester Studies estimates that half of sales go unaccounted for because customers are unable to find the information they’re searching for on online stores. Furthermore, a investigation of the global market discovered the majority of consumers prefer content that is in their home language and 40% of them will not buy from a site in another language.
To tackle this challenge, LianLian Global recently invested in AI ContentBot, a content creator ContentBot which gives its customers the most modern AI writer that provides launch services for products in 18 different languages, customized to the requirements of online sellers. In the end, LianLian Global addresses the difficulties and language barriers that come when launching international products and on new markets, which is driving the expansion and growth of trade across borders.
In 2023, sellers of e-commerce will likely see more important integrated services offered by their payment providers that operate across borders as the industry moves towards combining a variety of ecommerce services into a single, manageable platform.
- The risk of supplier payments
There’s nothing more frustrating for the seller of an online store than repeat inability to pay suppliers to purchase inventory that is needed.
Making business connections with suppliers from all over the world isn’t easy without the proper cross-border payments partner to check and verify the legitimacy of their partners. This is the reason that many international payment providers are investing in innovative processes to aid ecommerce sellers reduce risk associated with payments to suppliers, including money laundering and fraud.
For example, LianLian Global’s complete business payment network and world-class Know Your Customer (KYC) process allows the company provide online merchants worldwide and entrepreneurs in the e-commerce industry with the most transparent, compliant and secure cross-border payment solutions to China and essentially providing the first cross-border payment guarantee for the country. Customers also get an extra layer of security speed, speed, and cost-effective pricing. LianLian Global removes all the “middlemen” or correspondent banks, thereby eliminating payments delays as well as the extra expenses of holding and sending the transfer.
Due to the digital revolution, triggered in part by Covid pandemic Online transactions have grown dramatically in online marketplaces. This has led to a rising need for payments that are frictionless and are safe and reliable.
The trends mentioned in this article are all pointing towards the speed of cross-border transactions becoming more secure, economical and optimized for online sellers. For merchants and providers of payment the expansion of international market could provide long-term opportunities for business growth. Collaboration with third-party service providers in order to enhance security of payments or to increase efficiency in operations, could make the process of innovation and modernization in this field much faster and simpler.