Brexit, China Weigh on Cross-Border E-Commerce: Report

Global uncertainty has caused merchants to question the extent of their cross-border e-commerce programs in 2016, according to the results of a study conducted by Payvision and After showing solid growth for three years, the fourth annual Key Business Drivers and Opportunities in Cross-Border Ecommerce report found around 30 percent of merchants strongly agreed that cross-border e-commerce is profitable, which was flat compared to last year. At the same time, the number of merchants who merely agreed with the statement was down from 41 percent to 38 percent. Global events could be the reason, according to the report’s analysis.

“This backwards step is most likely generated by economic uncertainty across the world: the unexpected economic slowdown in China and the Brexit vote, among others,” the report said. “Merchants have lost an air of confidence that was evident from last year’s survey, and until the full effects of the global shakeup are established, the industry will be tentative.”

The survey also found that sharing a language and culture is more important when choosing international markets for expansion than sharing a border. Nearly 60 percent of merchants agree or strongly agree that language is more important than proximity as a driver of e-commerce, eight percent more than agreed with the same statement last year. Service providers and payments industry consultants indicated they felt the same—58 percent said they would advise e-commerce merchants to focus first on countries that share their language/culture.

Both merchants and service providers consider m-commerce to be the biggest game-changer in cross-border e-commerce for the third year in a row. This year, however, more respondents than ever before identified data breaches and the effect they have on card-not-present fraud as the top concern. The rise of alternative payments was also seen as especially impactful this year, chosen as the biggest game-changer by 20 percent of respondents.

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