Ugne Buraciene, the CEO of payabl., discusses the global payments trends that have emerged from the pandemic and where the cross-border commerce industry is heading in terms of growth.
Ugne has 14+ years of experience in banking and payments, through working with multiple global fintech companies. Her experience allowed her to develop expertise and acquire extensive knowledge and understanding of complex payments and banking ecosystems. These include knowledge in acquiring and issuing, banking and open banking, best industry practices, and key principles of international business operations with concrete focus on business development, marketing, and growth.
What are some of the cross-border payment trends that currently drive the global ecommerce market’s growth?
Cross-border trade has grown in the last two years and continues to do so, with global cross-border payment flows expected to reach USD 156 trillion in 2022. B2B transactions are expected to make up the largest share by far and account for USD 150 trillion. This monumental growth is being driven by consumers’ and businesses’ boosted appetite for digital payments as a result of the pandemic.
Merchants must reduce payment complexity, as consistency and smoothness of payment processing are among the most important factors helping them achieve a positive user experience.
One section of digital commerce reigns supreme: marketplaces. Overall, 41% of online spending globally is via marketplaces. This is due to the extreme convenience (64% of global shoppers say that they are excited by the prospect of buying everything through one retailer) and quality of the experience they offer to shoppers, including attractive pricing, delivery, service, product descriptions, online content – and the adoption of a large number of alternative payment methods and local solutions to cater to their audience. The need to reduce payment complexity as demand rises is another factor feeding the growth of global ecommerce. Merchants must reduce payment complexity as much as possible, as consistency and smoothness of payment processing are among the most important factors helping them achieve a positive user experience. It’s also advisable to have as few steps in the payment process as possible, and so merchants are adjusting their offered payment options to this end. Their diversified offering includes open banking and digital wallets as alternative payment methods, both of which will continue to grow exponentially in the coming years.
What are the countries where cash used to be king, and then it was strongly discouraged amid the pandemic? What should merchants consider when it comes to checkout options and customer behaviour in these countries?
In Europe, certain countries have been more affected than others. Ireland, Belgium, and Spain are prime examples, where an ECB survey found that more than 50% of respondents are using cash less than before the emergence of COVID-19. In Estonia, Latvia, and Malta, meanwhile, less than 25% said the same. Their reasons range from the convenience of online payments, greater availability and awareness of alternative payment methods, to fear of physical shopping and handling banknotes due to possible transmission risks. Another study found that Spanish and Italian consumers shopped online more during the pandemic than before, with Spain at 52% and Italy at 44%.
Merchants should be aware that this behaviour has a major impact on the evolving payment preferences of consumers and consider outcomes of this data collected specifically for their target markets when evaluating their existing checkout options and adding to them per region. Merchants should also be prepared to present a competitive advantage to brick-and-mortar businesses as high streets continue to reopen across Europe.
Apart from local payment methods and preferences, what should businesses look out for when they decide to expand their footprints in a certain region or country?
Merchants should consider the trends among their target markets that are shaping consumers’ preferences and leading to an increased appetite for cross-border shopping. This can confirm whether their investment in additional regions will provide sustainable or fleeting returns. These include price sensitivity, product availability, delivery preferences, sensitivity towards sustainability, and more, which may all have been temporarily impacted by the pandemic. For example, Spaniards and Italians shop online locally for environmental reasons. At the other end of the scale, the Nordic countries, although they typically have a high level of interest in sustainability compared to the European average, they import many products either through local companies or consumers themselves, due to the limited size and geographical position of the countries. These insights should shape merchants’ market entrance strategy and impact how they promote their competitive differentiators to gain ground on local competitors.
How can payabl. support businesses in staying competitive by handling both global and local payments?
We facilitate global payments through our full range of payment solutions, including card acquiring, alternative payment methods, and local solutions, as well as selected banking services such as IBAN accounts and prepaid cards. By utilising cutting-edge technology developed in-house, our dashboard offers merchants sophisticated risk management tools and detailed reporting capabilities to meet even the most complex technical requirements. Through the platform, users gain crucial visibility into transaction processing data at a granular level, as well as a complete financial overview for each MID activity. They may also capture and record all forms of fraud, through the provision of actionable data. Sales volume and chargeback analyses are also available at the click of a button. We proudly offer tailored services and 24/7 support to address any issues merchants may face around global and local payments, and we are working hard on a new set of offerings tailored to the needs of marketplaces and other ecommerce businesses.
What are, from your perspective, the trends shaping the future of cross-border payments, and how do your solutions tie in with these upcoming trends?
Digital wallets have consistently come out top as the frictionless payment method that consumers are comfortable with. While it is estimated that 12% of the global population currently uses digital wallet apps regularly while shopping, reports show that the adoption of mobile payments will surpass the use of credit cards and cash as soon as next year. Unsurprisingly, merchants are moving fast to respond to this market trend and meet global consumers’ preferences. We recently announced the addition of the three global leaders in the digital wallet space to our offering – Apple Pay, Google Pay and PayPal. Through one seamless integration, merchants can now implement these payment methods on their websites’ checkout pages through payabl. and reap the associated benefits. These methods are added to our 100+ alternative payment methods available to merchants, converting browsers to buyers, including bank transfer, mobile payment, and prepaid voucher technology.
With open banking solutions soon to be added to our portfolio, we aim to enable merchants to boost their business across the board and leverage emerging trends among global end-customers to achieve sustainable growth.