By Ralph Dangelmaier, BlueSnap
Today, cross-border e-Commerce is worth roughly $300 billion and is predicted to triple in the next two years. The 10 fastest growing countries in terms of e-Commerce growth rates and market share, as of 2014, are: China, U.S., UK, Japan, Germany, France, South Korea, Canada, Russia, and Brazil.
Countries With the Largest e-Commerce Market Share and Fastest e-Commerce Growth Rates
Advertisement
For merchants hoping to capitalize on this global growth trend in e-Commerce, expand their international reach and increase sales, it is vital that they implement a checkout and payment process that can support global shoppers. And working with a payment processing provider that offers this global support is the first, and most important step. Yet, because not all payment gateway providers offer the same level of global support, it is crucial that merchants vet their options before choosing a provider.
The Two Primary Obstacles To Conversion
Offering a local experience for every shopper is key to driving conversions, or more plainly put, sales. Unfortunately, many e-Commerce merchants do not have the correct processes or strategies in place to do so. And their payment gateway provider is not able to offer the support or implement the processes required to convert on an international level. So the payment gateway provider doesn’t mention conversion rates and merchants miss out on a massive opportunity to increase sales.
Checkout Friction + Payment Processing Declines = The Abandonment Problem
There are three primary obstacles that merchants need to address when considering their global customers: checkout friction, consumer confidence and payment processing declines. Together these three issues create the abandonment problem. And most merchants don’t even realize they have it . Yet, when the abandonment problem is remedied merchants can see up to a 42% increase in sales.
To remedy the abandonment problem, and retain customers, merchants must ensure that their checkout pages and payment processes are optimized for both domestic and international shoppers. For example offering a variety of payment types is critical when targeting a multi-country market. While in China the most popular online payment method is AliPay, in Canada PayPal is preferred, and in Russia cash payments make up the majority of sales. Merchants that don’t deal in multiple payment types risk losing potential sales from shoppers who prefer or are perhaps limited to one form of payment.
To fully optimize the checkout process, merchants need to eliminate friction and foresee barriers that may hinder payment processing in each region.
In addition to limited payment types offered, other examples of friction in the checkout process could include:
- Failure to offer local language and currency at checkout;
- Not offering coupons; and
- Too many steps/fields for shoppers to go through.
Examples of payment processing declines that should be avoided are:
- Limited connections to acquiring banks;
- Currency mismatches;
- Aggressive fraud rules; and
- Lack of retry & failovers.
Illustrating the real impact these points of friction can have on a business is one US merchant who saw a 16% increase in sales after switching to the local currency. Prior to the switch their e-Commerce site had a payment conversion rate of 82% when shoppers from Canada were paying in USD. When they switched the currency to CAD, that conversion rate jumped to 98%.
Identifying The Problems
But before merchants can begin to fix or enhance their global experience for shoppers they must understand where they currently stand — how much friction is currently in their checkout process and what is causing payment declines.
In order to help merchants do this, BlueSnap created the Checkout Conversion Calculator. This tool rates an e-Commerce merchant’s checkout and payment process, giving them two scores between 0 and 100 along with recommendations for improvement.
Merchants are then able to take their scores and compare them against their peers by referencing the Checkout Conversion Index — an index created from the checkout conversion scores of 650 U.S.-based e-Commerce sites of all sizes across 14 merchant categories.
The opportunity for e-Commerce merchants to grow revenue in today’s rapidly expanding global market is huge. But it is only possible with the right payment gateway provider who can provide total global support for a fully optimized checkout and payment process.
Ralph Dangelmaier is the CEO of BlueSnap, where he is leading the charge to establish BlueSnap as the payments leader in e-Commerce. He has more than 25 years of experience in strategy, marketing, sales, and revenue, product, SaaS, development and delivery services for a global customer base.
