key-business-drivers-in-cross-border-ecommerce 2014

International Expansion into Emerging Markets 2014

PAYVISION Global Card Processing

Key Business Drivers and Opportunities in Cross-Border Ecommerce

Author:Keira McDermott | Payvision BV

PAYVISION 2

Key Business Drivers & Opportunities in Cross-Border Ecommerce 2014

Contents1. IntroductIon 4

1.1 About this white pAper 4

1.2 GlobAl eCommerCe fACts & fiGures 5

1.3 enGines for Growth - ‘the yeAr of mobile’ 6

2. Survey hIghlIghtS 9

2.1 the rise of Cross-border eCommerCe 9

2.2 the biGGest GAme-ChAnGer: mobile CommerCe 10

3. how to make croSS-border ecommerce profItable 14

3.1 foCus on lAnGuAGe first 14

3.2 mAke your Customer feel At home 15

3.3 look for GlobAl pArtnerships And networks 17

3.4 summAry 19

4. regIonal dIfferenceS 21

4.1 overview 21

4.2 reGionAl breAkdown - Cross-border eCommerCe in europe 24

4.2.1 Our surVEy sAys… 24

4.2.2 OVErVIEw Of ECOMMErCE In EurOPE 25

4.2.3 CrOss-BOrDEr ECOMMErCE In EurOPE: DrIVErs AnD ChAllEngEs 27

4.2.4 MAjOr PlAyErs 33

4.2.5 suMMAry 33

4.3 reGionAl breAkdown - Cross-border eCommerCe in north AmeriCA 34


4.3.2 OVErVIEw Of ECOMMErCE In nOrth AMErICA 35

4.3.3 CrOss-BOrDEr ECOMMErCE In nOrth AMErICA: DrIVErs AnD ChAllEngEs 36

4.3.4 MAjOr ECOMMErCE PlAyErs 39

4.3.5 suMMAry 40

PAYVISION 3


4.4 reGionAl breAkdown - Cross-border eCommerCe in AsiA 41


4.4.2 OVErVIEw Of ECOMMErCE In AsIA 42

4.4.3 CrOss-BOrDEr ECOMMErCE In AsIA: DrIVErs AnD ChAllEngEs 46

4.4.4 thE MAjOr PlAyErs 55

4.4.5 suMMAry 56

4.5 reGionAl breAkdown - Cross-border eCommerCe in lAtin AmeriCA 57


4.5.2 rEgIOnAl BrEAKDOwn - OVErVIEw Of ECOMMErCE In lAtIn AMErICA 59

4.5.3 CrOss BOrDEr ECOMMErCE In lAtIn AMErICA: DrIVErs AnD ChAllEngEs 61

4.5.4 thE MAjOr PlAyErs 64

4.5.5 suMMAry 64

4.6 reGionAl breAkdown - Cross-border eCommerCe in the pACifiC 65


4.6.2 OVErVIEw Of ECOMMErCE In thE PACIfIC 67

4.6.3 CrOss BOrDEr ECOMMErCE In thE PACIfIC: DrIVErs AnD ChAllEngEs 68

4.6.4 thE MAjOr ECOMMErCE PlAyErs 70

4.6.5 suMMAry 70

5. executIve Summary 71

5.1 whAt now And whAt next? 71

5.1.1 CrEDIt CArDs - thE CrOss-BOrDEr ECOMMErCE gluE 72

5.1.2 It Is All ABOut MOBIlE 72

5.1.3 gO AgAInst thE grAIn 73

5.1.4 KnOwlEDgE EquAls grOwth 73

6. about the publISherS and edItorS 74

6.1 About pAyvision 74

6.2 About CArdnotpresent 74

6.3 About the Author 75

6.4 About the editors 75

PAYVISION 4


introduCtion1. 1.1 About this white pAper

In 2014 ECOMMErCE turnED 20 yEArs OlD.

On August 11, 1994, sting’s album ten summoner’s tales was sold on netMarket for usD 12.48, a transaction commonly regarded as the first secure online purchase.1

fast forward to 2014 — ecommerce has exploded across the globe, and is still going strong. the landscape grows more competitive, and for businesses to continue driving value, and to stand out against a vast backdrop of successful players, one answer is to look across borders. this is particularly relevant when we consider the maturity of domestic markets, where compound annual growth rates are much lower than emerging markets, such as China.

thIs 2014 CrOss-BOrDEr ECOMMErCE whItE PAPEr Is thE rEsult Of A COllABOrAtIVE glOBAl surVEy By

CArDnOtPrEsEnt.COM AnD PAyVIsIOn. wE AsKED MErChAnts, MErChAnt sErVICE PrOVIDErs (MsPs), ACquIrErs, PAyMEnt sErVICE PrOVIDErs (PsPs), AnD COnsultAnts tO IDEntIfy thEIr KEy DrIVErs, AnD ChAllEngEs, In OVErsEAs ExPAnsIOn.

the survey identifies how our polled merchants generate cross-border profit, their preferred markets for driving growth, which markets hold more challenges, and why. this year, industry experts from hsBC, realex, EBAnx and sale-supply covering the us, Europe and China, as well as executives from a major card brand and a successful mobile payment app were also interviewed, giving their candid opinions on cross-border ecommerce as a profitable business.

1

Internet retailing

PAYVISION 5


GlobAl eCommerCe fACts & fiGureswOrlDwIDE BusInEss tO COnsuMEr (B2C) ECOMMErCE rEAChED usD 1.25 trIllIOn In 2013, AnD shOulD hIt usD 1.5 trIllIOn By thE EnD Of 2014, ACCOrDIng tO EstIMAtEs By EMArKEtEr.

while in 2013 the main contributing market continues to be north America at usD 431 billion, by the end of 2014 the Asia Pacific region is predicted to overtake the leading

spot, and make the largest contribution to global ecommerce. Indeed, China has already outstripped the us in ecommerce sales; usD 296 billion and usD 263 billion respectively.2

59

69

B2C ECOMMERCE SALES WORLDWIDE BY REGION 2013 AND 2014 PREDICTION IN USD BILLIONS

0 100 200 300 400 500 600

2014

2013

MIDDLE EAST AND AFRICA

LATIN AMERICA

EASTERN EUROPE

WESTERN EUROPE

NORTH AMERICA

ASIA PACIFIC

this dataset makes the Asia Pacific region a desirable choice for expanding business from Europe or north America, markets whose ecommerce growth is gradually slowing down. this is especially relevant when we consider the Chinese Pilot free trade Zone (ftZ), officially launched in september 2013; the Chinese government’s major initiative to open China up to the outside world from a trade perspective. this is set to dramatically boost both import and export cross-border ecommerce.

But while the Asian markets are certainly alluring, for many merchants the complications of expansion into the unknown outweigh the business opportunities.

In thIs whItE PAPEr wE IDEntIfy thEsE ChAllEngEs, AnD hIghlIght hOw tO turn An ECOMMErCE OBstAClE IntO An ECOMMErCE OPPOrtunIty.

2

Chinese Ministry of

Commerce

1.2

PAYVISION 6


enGines for Growth - ‘the yeAr of mobile’thE wOrlD Is ChAngIng. wE, As COnsuMErs, ArE MOrE COnnECtED tO Our sMArt, hAnDhElD DEVICEs AnD thE PEOPlE ArOunD us. wE ArE MOrE COnnECtED tO BusInEssEs, OthEr COnsuMErs, AnD OthEr COuntrIEs. wIth grOwIng IntErnEt AnD sMArtPhOnE PEnEtrAtIOn ACrOss thE glOBE, thE wOrlD Is lItErAlly At Our fIngErtIPs.

with more connected devices, consumers browse and shop in an omni-channel, multi-device world. gPs allows for loca-tion-based services and a more tailored, and valuable, consumer experience.

Mobile commerce alone contributed approx-imately usD 133 billion, or 10.6%, to global ecommerce in 2013. And this is set to boom; predictions estimate that mobile commerce will reach usD 516 billion by 2017, almost half of which will be driven from Asia.

60

70

WORLDWIDE MOBILE COMMERCE 2013 AND 2017IN USD BILLIONS

0 50 100 150 200 250

2017

2013


LATIN AMERICA

EASTERN EUROPE

WESTERN EUROPE

NORTH AMERICA

ASIA PACIFIC

1.3

PAYVISION 7


61

0 100 200 300 400 500

TOTAL ECOMMERCE

M-COMMERCE


LATIN AMERICA

EASTERN EUROPE

WESTERN EUROPE

NORTH AMERICA

ASIA PACIFIC

MOBILE COMMERCE AS A PROPORTION OF TOTAL ECOMMERCE IN USD BILLIONS

A generation of tech-savvy, connected individ-uals are growing older, with more disposable income and greater customer service expec-tations. social media as a form of commu-nication is well-established for this maturing group. Ecommerce is thriving through word-of-mouth, and a community of peer-based online consumers. the most successful players generate value through communication, brand equity and valuable content, where marketing is no longer a one way channel.

COnsuMErs ArE tAlKIng BACK, tAlKIng tO EACh OthEr, AnD DrIVIng trust.

with a more connected, tech-smart world comes innovation, driving demand for new technologies. this is evident in the evolution of online payment preference.

while credit cards still dominate the online payment sphere, the demand for alternative payments in domestic markets such as e-wal-lets, cloud-based payments and mPOs, is on the rise. these preferences vary considerably per region, and per country.

with faster communication channels, higher Internet penetration and a demand for new technologies, the world has become a smaller place. Consumers are no longer hindered by their own borders—they can browse a store front in any country they choose. If products overseas are cheaper, more trustworthy, or simply more ‘exotic’, consumers will be tempted. while alternative payments do exist, their rise poses problems for merchants with cross-border aspirations. Credit card, however, as the globally preferred online payment method, is the glue that binds these overseas markets together.

the curiosity of shopping cross-border has already reached a tipping point in some regions, where cross-border shopping, facilitated by common payment preferences, is no-longer unusual. In some cases it is significantly fueling growth.

1.3

PAYVISION 8


while AlternAtive pAyments do exist, their rise poses problems for merChAnts with Cross-border AspirAtions. Credit CArd, however, As the GlobAlly preferred online pAyment method, is the Glue thAt binds these overseAs mArkets toGether.

PAYVISION 9


But COnVErtIng tEMPtAtIOn IntO wIDEsPrEAD sAlEs, thus PrOfIt, ACrOss thE glOBE Is whErE thE IntrICACIEs lIE. unDErstAnDIng rEgIOnAl COnsuMEr nEEDs, thE PrECIsE CustOMEr jOurnEy

PrEfErEnCEs, ExPECtAtIOns, AnD CulturAl nOrMs Is CruCIAl tO hIgh ADOPtIOn AnD COnVErsIOn rAtEs, thus suCCEssful IntErnAtIOnAl ExPAnsIOn.

thE wOrlD Is A BOrDErlEss ECOMMErCE MArKEt sIMPly wAItIng tO BE tAPPED.

survey hiGhliGhtsthe rise of Cross-border eCommerCe I shAll BE tEllIng thIs wIth A sIgh sOMEwhErE AgEs AnD AgEs hEnCE: twO rOADs DIVErgED In A wOOD, AnD I — I tOOK thE OnE lEss trAVElED By, AnD thAt hAs MADE All thE DIffErEnCE. the road not taken – robert froSt, 1916

Cross-border ecommerce is no longer just an alluring—but largely unexplored—landscape. what was once daunting and exotic, is now far more commonplace.

660 rEsPOnDEnts PArtICIPAtED In thIs yEAr’s surVEy; A 45% InCrEAsE On 2013.

In 2013; 50% of our respondents confirmed they did not yet engage in cross-border ecommerce. In 2014 only 18% of our survey respondents admitted they continue to focus solely on domestic sales, believing cross-border ecommerce is more complex and less profitable.

2.1

2.

1.3

PAYVISION 10


WE FOCUS ON DOMESTIC SALES BECAUSE WE BELIEVE CROSS-BORDER MORE COMPLEX AND LESS PROFITABLE.

44.0%

24.8%18.2%

13.0%

N/A

NEUTRAL NO

YES

13Of all our survey respondents, the vast majority agree that selling their products or services overseas is profitable; with nearly 80% either agreeing or strongly agreeing.

SELLING OUR PRODUCTS AND SERVICES ACROSS BORDERS HAS PROVEN TO BE PROFITABLE.

N/ASTRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

45.1%14.0%

6.7%1%

1%

32.2%

12

As confirmed by nIck wallpe of Central Products, a us-based merchant of commercial kitchen supplies, cross-border ecommerce can be complex, but the benefits still outweigh the challenges.

“ we tend to do A mAnuAl proCess with inter-

nAtionAl CArd orders where we try to CAll

the issuinG bAnk And verify the billinG

Address. i’m tryinG to evAluAte options to

AutomAte it, but even with the proCess we

use now, [Cross-border eCommerCe] is worth

it. we wAnt As mAny orders As we CAn And As

mAny sAles As we CAn”

nIck wallpe, central productS

the biGGest GAme-ChAnGer: mobile CommerCeA strOng PlurAlIty Of Our rEsPOnDEnts, 37%, COnfIrMED thAt In thEIr OPInIOn, thE BIggEst gAME-ChAngEr tO CrOss-BOrDEr ECOMMErCE thIs yEAr COMPArED tO PrEVIOus yEArs Is thE grOwth Of mobIle commerce; thE PurChAsIng Of gOODs Or sErVICEs VIA A MOBIlE DEVICE.

2.2

2.1

PAYVISION 11


the biGGest GAme-ChAnGer to Cross-border eCommerCe this yeAr is the Growth of m-CommerCe – the purChAsinG of Goods or serviCes viA A mobile deviCe – ACCordinG to 37% of our respondents.

PAYVISION 12


COMPARED TO LAST YEAR, THE BIGGEST GAME CHANGER FOR CROSS-BORDER ECOMMERCE IS:

0 5 10 15 20 25 30 35 40

OTHER

DATA/SECURITY BREACHES

SME MARKET-ENTRY FACILITATION BY SHOPPING-CART PLATFORMS (E.G., SHOPIFY)

GREATER INSIGHT INTO INTERNATIONAL EXPANSION

THE ADOPTION OF MPOS

GROWTH OF M-COMMERCE

REDUCED REGULATION

this opinion is certainly in line with global trends, particularly when considering the growing purchasing power of emerging markets, some previously disconnected from ecommerce altogether. In some markets, first time Internet users are accessing via their smartphones.

Indeed, when asked more specifically about the rise of m-commerce, merchants and consultants strongly agreed that they witnessed explosive growth; 33.3% and 48% respectively.

0 20 40 60 80 100

CONSULTANTSMERCHANTS

N/A

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

WE HAVE SEEN EXPLOSIVE GROWTH IN MOBILE COMMERCE (BUYING ON THEIR PHONES OR TABLETS)

the lion’s share of our merchants, 83%, confirmed they now offer their customers the ability to shop and buy across multiple devices.

2.2

PAYVISION 13


14

WE OFFER OUR CUSTOMERS THE ABILITY TO SHOP AND BUY ACROSS MULTIPLE DEVICE OPTIONS. INCLUDING MOBILE.

NO

YES

83.9%16.1%

the same group also confirmed that optimizing their website checkout for multiple devices including tablets and mobiles, has indeed boosted their online sales.

ADAPTING OUR WEBSITE CHECKOUT PROCESS TO MULTIPLE DEVICES (INCLUDING MOBILE) HAS BOOSTED SALES

N/A

NEUTRAL

NO YES

15.0%

4.3%62.3%

18.4%

19the rise in mobile connectivity and communi-cation is intrinsically linked to how consumers engage with each other, and with brands.

the online marketplace is an increasingly open, global forum for online customers to express their opinions via social media and blogs. not only can consumers shop on the go, they can browse the storefronts of retailers around the

world and talk to other consumers comparing experiences, prices and product selection.

A loyal brand community generates awareness and global sales. Indeed, more than half (55%) of retail leaders have successfully expanded their customer base using social media.3

Our merchants agree with this trend; 58% confirm that incorporating social media into their ecommerce strategy boosted their online sales.

13

N/A

NEUTRAL

STRONGLY DISAGREE

DISAGREE

AGREE

STRONGLY AGREE

INCORPORATING SOCIAL MEDIA HAS BOOSTED ONLINE SALES.

5.3%21.0%

5.3%

0%16.1%

13.0%

23

3

Aberdeen group– social

Powers Activate:

Engineering social

Engagement to win the

hidden sales

Cycle,.2013

2.2

PAYVISION 14


how to mAke Cross-border eCommerCe profitAbleIt Is unIVErsAlly AgrEED thAt thE wOrlD Is MOBIlE. wIth MOrE COnnECtED DEVICEs, COnsuMErs CAn BrOwsE thE stOrEs Of MErChAnts BOth In thEIr Own MArKEts AnD OthErs, MAKIng COMPArIsOns AnD PurChAsIng DECIsIOns frOM thE PAlM Of thEIr hAnD.

with increased on-the-go purchasing, it stands to reason that adaptation to meet mobile needs is a quick-win. while requiring additional resources and budget, our survey respondents agree that such changes will result in boosted sales, both domestically and cross-border.

On tOP Of thIs, Our surVEy rEsPOn-DEnts hIghlIghtED OthEr strAtEgIC DECIsIOns thAt MAKE CrOss-BOrDEr ECOMMErCE truly PrOfItABlE.

3.

foCus on lAnGuAGe firstfrOM Our surVEyED MErChAnts, CrOss-BOrDEr ExPAnsIOn strAtEgIEs ArE rElAtIVEly sPlIt; 43% Of Our rEsPOnDEnts ChOsE nEIghBOrIng COuntrIEs fIrst, whErEAs 53.7% tArgEtED COnsuMErs wIth A COMMOn lAnguAgE AnD CulturE.

however, when we polled our merchants on how they drive cross-border sales, 49% agreed that common language is a more effective driver than geographical location or shared borders, compared to just 6.4% who disagreed.

this number is less than our survey 2013, when 70.3% agreed to this statement. yet it still

highlights a continued, if not declining, reser-vation by merchants to delve into mysterious markets such as Asia, where language and culture can hinder the ease of doing business.this opinion is in line with current cross-border ecommerce trade figures; the greatest flow of cross-border sales occur between the us and

3.1

PAYVISION 15


the uK, the global leaders for cross-border business-to-consumer (B2C) online shopping.4 these figures are considered in more depth in the regional sections of this white paper.

11

N/A

STRONGLY DISAGREE

DISAGREE

NEUTRALAGREE

STRONGLY AGREE

WE EXPERIENCED THAT HAVING A COMMON LANGUAGE WAS A MORE EFFECTIVE DRIVER OF CROSS-BORDER ECOMMERCE THAN SHARING A COMMON BORDER.

35%

14%21.0%

6.4%

23.6%

0%

21

Interestingly, the same group also confirmed that while they focus their strategy on regions

with similar languages and cultures, this focus is not the result of complicated localization or multi-lingual ecommerce. It seems the hesi-tation to expand into these markets is more perceptual than material.

12

N/A

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

WE MAINLY SELL INTO FOREIGN REGIONS / COUNTRIES THAT SHARE OUR LANGUAGE AND CULTURE BECAUSE IT IS TOO COMPLEX TO INVEST IN MULTI-LINGUAL ECOMMERCE.

20.4%35.48%

7.53%

18.29%18.3%

0%

22

4

ystats – global Cross-

Border Ecommerce,

2014

mAke your Customer feel At homeCrOss-BOrDEr shOPPErs ArE stIll ultIMAtEly DOMEstIC PurChAsErs, lOOKIng fOr A PrODuCt Or sErVICE BEyOnD thEIr Own BOrDErs, whAtEVEr thE MOtIVAtIOn.

Making online consumers feel at home is crucial. whether this is accomplished by local-izing currency and pricing or aligning language or imagery with cultural preferences, familiarity and trust is key to cross-border conversion.

48.3% of our survey respondents confirm that offering multi-currency options on their online store boosted their online sales.

16OFFERING MULTI-CURRENCY OPTIONS HAS BOOSTED OUR CROSS-BORDER SALES.

N/A

NEUTRAL

NO

YES

48.3%2.1%

16.1%

33.5%

26

Only 35% of our respondents admitted offering multiple currency options is complex, compared

3.2

3.1

PAYVISION 16


to 53.3% in 2013. this decrease implies barriers to cross-border activity are lowering.

24IT IS COMPLEX TO ADAPT OUR PLATFORM TO OFFER OUR CUSTOMERS MULTIPLE CURRENCIES.

N/A

NEUTRAL

NO

YES

35.4%

30.0%

14.0%

20.6%

34

just as customers feel more at home dealing in their local currency, learning a customer’s preference for online payment is time worth investing, according to our survey respondents.

within the regional breakdown of this white paper, we identify key markets and look at specific preferred payment methods.

61.2% of our survey respondents confirm they researched and analyzed the various preferred payment methods as part of their cross-border expansion, before offering a host of alternative payment methods.

14

NOT APPLICABLE

NOYES

BEFORE OFFERING MULTIPLE ALTERNATIVE PAYMENT METHODS WE FIRST RESEARCHED AND ANALYZED THE PREFERRED PAYMENT METHODS IN DIFFERENT REGIONS AND COUNTRIES.

61.2%15.2%

23.6%

24

48% also reported investing time and resources understanding local cultures, to understand their cross-border customers.

29BEFORE WE EXPANDED CROSS-REGIONALLY WE HAVE TO INVEST TIME AND RESOURCES TO UNDERSTAND LOCAL CULTURE AND CUSTOMER PREFERENCES.

N/A

NEUTRAL

NO

YES

48.4%

11.8%

18.3%

21.5%

39

Credit card, however, remains the most commonly preferred payment method. this is confirmed by 64.5% our survey respondents. gijs op de weegh, Chief Operating Officer at Payvision, comments on this existing trend.

“when lookIng at croSS-border ecommerce

from a paymentS perSpectIve, It IS worth

notinG thAt while reseArCh in AlternAtive

pAyments is CertAinly vAluAble, the

most robust Cross-border mArkets

Are those in whiCh Consumers Are

Confident Credit CArd users.

“tIme and reSourceS Spent on localIzed pay-

ment methodS haS value to ServIce one

pArtiCulAr mArket, but to Compete on A

wider, more GlobAl level, Credit CArds Are

the bridGe between the multiple mAr-

kets.” gIjS op de weegh, coo at payvISIon

15

N/A

NEUTRAL

NO

YES

WHILE ALTERNATIVE PAYMENTS HAVE BECOME POPULAR, CREDIT CARDS PREVAIL AS THE DOMINANT PAYMENT METHOD WORLDWIDE FOR SELLING CROSS-BORDER.

64.5%9.6%

15.0%10.9%

25

3.2

PAYVISION 17


look for GlobAl pArtnerships And networksfOr sOME MErChAnts, thE KnOwlEDgE, rEsOurCEs AnD InVEstMEnts nEEDED fOr CrOss-BOrDEr ExPAnsIOn ArE A ChAllEngE.

24% of our survey respondents noted a reluc-tance to engage in cross-border ecommerce due to complex foreign tax laws, and 23% admit a lack of knowledge regarding local regulation.

finding international partners with local knowl-edge reduces these risks for merchants, and turns cross-border complexity into a profitable initiative.

Indeed, betSy waterS from hsBC bank in new york confirms this opinion.

“there are adequate SolutIonS out there,

but to be able to offer a local currency

experienCe, merChAnts need to put

toGether severAl pieCes. they need

to determine how they Are GoinG to

mAke eACh CoG in the wheel work.

“one pIece IS currency converSIon; how they

convert that currency to hedge rISk. an-

other is inteGrAtinG with A GAtewAy thAt CAn

hAndle multiple CurrenCies. the third, And A

pretty importAnt one, is merChAnts need to

be Able to ACquire And settle in those Cur-

renCies. findinG the riGht pArtner CAn help

with fittinG those pieCes toGether properly

And is key to suCCess.” betSy waterS , head

tranSactIonal fx amerIcaS | hSbc bank uSa

Almost 45% of our merchants agree that part-nering with an international payment service provider has driven considerable business growth.

17AS A MERCHANT WITH CROSS-BORDER ASPIRATIONS, PARTNERING WITH AN INTERNATIONAL PAYMENT SERVICE PROVIDER HAS LED TO CONSIDERABLE BUSINESS GROWTH.

N/A

NEUTRALNO

YES

44.7%

23.6%

28.47%

3.23%

27

An executive from one of the major card brands confirms the importance of local partnerships, as well as a local social strategy to expand cross-border.

“merchantS need to underStand there are

potentIal partnerS and capabIlItIeS already

in plACe thAt CAn help them ACCelerAte

expAnsion in other mArkets. but if you wAnt

to penetrAte other mArkets And your brAnd

is not very well known, you need to develop

loCAl initiAtives And CommuniCAtion plAns.”

Online merchants are not the only stakeholders in the ecommerce chain that face challenges when considering cross-border expansion. for PsPs and acquirers, the intricacies of cross-border expansion can be complex.

In line with global trends, a massive 96% of our PsP and IsO respondents agree that increasing pressure is placed on payment service providers to offer extended services, multiple payment methods and new channels for mobile, in

3.3

PAYVISION 18


order for merchants to service a more global marketplace. these additional services are also expected to be available at increasingly lower costs.

42

52

PREVIOUSLY MERCHANTS FOCUSED ON ONE GEOGRAPHICAL REGION, NOW THEY ASK FOR EXTENDED SERVICES, A VARIETY OF PAYMENT METHODS AND NEW CHANNELS (EG MOBILE) TO SERVICE A GLOBAL MARKET.

N/A

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

59.0%

37.0%

1.2%1.2%

0%2.0%

Discussing this subject with the Compliance Director of a successful us-based mobile payment app business, it was agreed that merchants expect more in a demanding, increasingly cross-border environment.

“there are very few paymentS companIeS that

are able to offer a SeamleSS croSS-border

serviCe. the biGGest ChAllenGe is meet-

inG All the CompliAnCe requirements,

inCludinG CorporAte Cross-border, en-

terprise-wide CompliAnCe poliCies And

mAtChinG those up with whAt’s required

by the loCAl jurisdiCtion, And whAt mer-

ChAnts mAy wAnt in the loCAl jurisdiCtion.

there is no one-size-fits-All ApproACh to

this, but thAt’s whAt merChAnts expeCt.”

this, in turn, poses more problems for merchants, in particular the sMEs, who would like to expand cross-border.

“the larger proceSSorS that can offer

global ServIceS are exactly the oneS that

Are not inClined to Give the little Guy

the benefit of the doubt. they’re GoinG

to shut smAll merChAnts down, beCAuse

there is no impACt to their bottom line.”

the landscape grows more competitive for PsPs and IsOs; 78% of our respondents note that they struggle against startups or leaders from other areas of the ecommerce industry, slightly more than in 2013 at 76%. 60% agree that Internet giants like google and facebook are disrupting the market by moving into the payments domain.

52

62

PSPS FACE COMPETITION FROM START-UPS OR INDUSTRY LEADERS FROM OTHER SEGMENTS OF THE ECOMMERCE INDUSTRY.

N/ANEUTRAL

NO

YES

78.0%

4.0%

2.0%16.0%

43

53

PSPS ARE FACING MORE COMPETITION FROM INTERNET GIANTS LIKE GOOGLE AND FACEBOOK MOVING INTO THE PAYMENT DOMAIN.


DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

45.0%

15.0%

23.0%

13.0%

4.0%0%

77% of our PsPs agree that, while they aim for direct membership in card schemes, this involves time consuming technical integration, requiring specific expertise. this opinion is shared by over 15% more of our respondents than in 2013.

Connecting to Payvision, offering a global acquiring network, could be an interesting option to tackle these challenges.

3.3

PAYVISION 19


48

58

PSPS AIM FOR DIRECT MEMBERSHIP IN CARD SCHEMES BUT THIS INVOLVES TIME CONSUMING, TECHNICAL INTEGRATION, REQUIRING SPECIFIC EXPERTISE.

N/A

NEUTRAL

NO

YES

77.0%

13.0%

4.0%

6.0%

faced with both increased competition, and technical challenges, connecting to a global acquiring network can decrease such complex-ities and costs. An overwhelming 88% of our respondents agree; to provide merchants with

cross-border expansion capabilities, PsPs and IsOs should connect to a global acquiring network. this majority opinion is up from 71% in 2013.

46

56

IN ORDER TO PROVIDE MERCHANTS WITH CROSS-BORDER ECOMMERCE EXPANSION PSPS / ISOS NEED TO CONNECT TO A GLOBAL ACQUIRING NETWORK.

N/ANEUTRAL

NO

YES

88.0%

5.0% 3.0%4.0%

summAryIn OrDEr tO sErVICE COnsuMErs AnD CustOMErs On A glOBAl sCAlE, Or tO ExPAnD frOM A DOMEstIC stAnDPOInt, Our surVEy rEsPOnDEnts hIghlIght CErtAIn ADAPtAtIOns AnD strAtEgIC DECIsIOns thAt CAn ultIMAtEly DrIVE grEAtEr VAluE.

with more consumers connected by smart-phones and tablets, our merchants agree that spending resources on optimized platforms for mobile browsing is a surefire win. In an increasingly communicative marketplace, driven by increased mobile Internet pene-tration, building a solid community enhances consumer preference, ultimately driving more business.

to reach out to consumers beyond domestic borders, our survey respondents agree that an initial focus on language and culture is a more profitable business driver than prox-imity. Beyond that, if a target market indeed has different languages and cultures, time

spent on research into local preferences is absolutely vital.

Making cross-border consumers feel at home wins trust and drives conversion. use of local currencies has been confirmed to result in higher sales. Preferred payment methods will increase familiarity and a better checkout expe-rience for overseas consumers, according to our survey respondents.

yet it is important not to lose sight of payments from a global perspective; credit card is the most commonly preferred and accepted form of online payment, thus binding the most successful markets together.

3.4

3.3

PAYVISION 20


fInAlly, MAKIng COnnECtIOns tO IntErnA-tIOnAl PArtnErs, wIth lOCAl KnOwlEDgE AnD A glOBAl ACquIrIng nEtwOrK, wIll sIgnIfICAntly lOwEr CrOss-BOrDEr COMPlExIty. wIth shArED KnOwlEDgE AnD

grEAtEr InDustry trAnsPArEnCy, thE EntIrE CrOss-BOrDEr VAluE-ChAIn fOr MErChAnts, PsPs, IsOs, IssuErs AnD ACquIrErs wIll BE MOrE PrOfItABlE.

3.4

PAYVISION 21


reGionAl differenCes4. overview ChInA - A gAP In thE MArKEt fOr fOrEIgn PlAyErs?

wE hAVE lOOKED At thE lAtEst ECOMMErCE fACts frOM A glOBAl PErsPECtIVE; It Is COMMOnly AgrEED thAt thIs Is thE yEAr fOr thE EMErgIng AsIA rEgIOn–In PArtICulAr ChInA–tO tAKE CEntEr stAgE. AsIA wIll DrIVE glOBAl ECOMMErCE grOwth, rEPrE-sEntIng A POwErful COnsuMEr fOrCE. nOw Is thE rIght tIME tO lOOK EAst fOr OVErsEAs BusInEss.

By comparing the regional population figures to their contribution to global ecommerce, we can see that north America and western Europe are similar in terms of ecommerce contribution versus population.

yet the sheer number of people in the Asia Pacific region compared to the regional contri-bution to global ecommerce indicates the huge potential value of this region.

62

POPULATION COMPARED TO ECOMMERCE CONTRIBUTION

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000

POPULATION IN MILLIONSECOMMERCE IN USD BILLIONS


LATIN AMERICA

EASTERN EUROPE

WESTERN EUROPE

NORTH AMERICA

ASIA PACIFIC

As part of our survey, we asked our respon-dents the regions in which they are focusing their cross-border strategy. Interestingly, only a small plurality of 31% agreed that emerging markets were their focus. 18% agreed that they would be keen to expand to China, but do not

believe the market is open to foreign players. 24.7% were neutral on the subject.

yet, as mentioned in the introduction, with the current Chinese ftZ schemes to open China up to foreign import and export trade, in reality

4.1

PAYVISION 22


cross-border ecommerce presents a tremen-dous opportunity.

30EMERGING (BRIC) MARKETS ARE OUR PRIMARY FOCUS WHEN CONSIDERING CROSS-BORDER ECOMMERCE IS FOREIGN REGIONS.

N/A

NEUTRAL NO

YES

31.1%

18.2%

35.8%

14.9%

40

41

31WE ARE EAGER TO EXPAND INTO CHINA BUT WE BELIEVE THE MONOPOLIZED CHINESE LANDSCAPE IS NOT OPEN TO FOREIGN PLAYERS.

N/A

NEUTRAL NO

YES

18.4%

15.0%

41.9%

24.7%

thEsE rEsults InDICAtE A POtEntIAl gAP In thE MArKEt fOr OVErsEAs ExPAnsIOn tO ChInA. In lIght Of thE hugE grOwth, wIth thE rIght APPrOACh AnD KnOwlEDgE, nOw MAy BE ExACtly thE tIME tO tAP IntO thE AsIAn POwErhOusE, wIth lEss COMPEtItIOn frOM fOrEIgn BusInEssEs.

we asked specific regions about their cross-border strategy, and the results were more telling.

In europe thE MAIn rEgIOns fOr CrOss-BOrDEr ExPAnsIOn ArE OCEAnIA

– AustrAlIA, nEw ZEAlAnD AnD thE PACIfIC – AnD nOrth AMErICA, BOth wIth A 52% MAjOrIty shArE.

4.1

33

43

0 10 20 30 40 50 60

NO STRATEGY

SUB-SAHARAN AFRICA

NORTH AMERICA

MIDDLE EAST AND NORTH AFRICA

LATIN AMERICA

OCEANIA

ASIA

ON WHICH COUNTRIES OUTSIDE OF EUROPE DO YOU FOCUS YOUR CROSS-BORDER STRATEGY

PAYVISION 23


when questioned about China specifically, Europeans are relatively split on whether expanding to China would be profitable. Only 14.2% said yes, whereas 19% were against the potential value of this market, and 19% were neutral on the subject.

45

35CROSS-BORDER ECOMMERCE WITH CHINA WOULD BE MORE PROFITABLE THAN OTHER MARKETS.

N/A

NEUTRAL

NO

YES

14.2%

19.0%

19.0%

48.7%

In Europe, 25% believe that local legislation is the main barrier to entry to China.

In north amerIca, Our rEsPOnDEnts rEPOrt thAt thEIr MAIn fOCus fOr CrOss-BOrDEr ECOMMErCE Is EurOPE wIth A 64% MAjOrIty VOtE. AsIA Only rECEIVED 31%, lEss thAn lAtIn AMErICA Or OCEAnIA.

4.1

41

ON WHICH REGIONS OUTSIDE OF NORTH AMERICA DO YOU FOCUS YOUR CROSS-BORDER STRATEGY

0 10 20 30 40 50 60 70 80

NO STRATEGY

SUB-SAHARAN AFRICA


LATIN AMERICA

EUROPE

OCEANIA

ASIA

Our north American respondents were even less in favor of expansion into China. Only 11% believe it is more profitable than other regions. Barriers to entry were evenly split between legislation, logistics and language, each with 24% vote. this even split indicates confusion and caution about the Chinese market in north America.

however, with time and resources invested in research about local preferences and suppliers in addition to the latest government ftZ legis-lation boosting cross-border ecommerce in and out of China, concerns are less pertinent, barriers are lower, and profitability consider-ably greater.

PAYVISION 24


49

39AS AN AMERICAN RETAILER, CROSS-BORDER ECOMMERCE WITH CHINA WOULD BE MORE PROFITABLE THAN OTHER INTERNATIONAL MARKETS.

N/A

NEUTRAL

NO

YES

11.0%

29.0%

35.0%25.0%

now we will look at the specific regions in more detail; how our respondents consider each region, the current ecommerce landscape, and the cross-border ecommerce opportunities and major players.

reGionAl breAkdown - Cross-border eCommerCe in europe

4.2

our survey sAys…

frOM thE rEsults Of Our surVEy, thE EstABlIshED But lArgEly DIVIDED MArKEt In EurOPE Is A POPulAr ChOICE fOr CrOss-BOrDEr ECOMMErCE.

In nOrth AMErICA, EurOPE wAs thE rEgIOn Of ChOICE fOr CrOss-BOrDEr ExPAnsIOn Of 64% Of rEsPOnDEnts. Our lAtIn AMErICAn rEsPOnDEnts AlsO COnfIrMED thAt, AftEr nOrth AMErICA, It wAs thEIr tOP rEgIOn, rECEIVIng 50% Of thE VOtE.

Europeans are confident cross-border shop-pers, so it is understandable that our survey indicates a strong preference for expansion in this region. It also signifies that focus on this region can be profitable, not only by engaging the European powerhouses uK and germany, but also the potential emerging markets to the south and East.

yet the preference of cross-border expansion to the diverse European market indicates significant competition, and a certain level

of saturation. for online merchants to stand out in this region, particularly in the mature markets, product offerings need to be unique or hold something of very specific value.

whIlE sPEnDIng lEVEls AnD IntErnEt PEnEtrAtIOn rEMAIn hIgh, sOME AsPECts Of EurOPEAn ECOMMErCE grOwth, EsPECIAlly In thE uK, gErMAny AnD frAnCE, ArE slOwIng DOwn. PuttIng fOCus On EAstErn EurOPE, thE grOwIng MArKEts Of EurOPE, COulD PrOVIDE A MOrE unIquE, VAluE-DrIVEn CrOss-BOrDEr OPPOrtunIty

4.2.1

4.1

PAYVISION 25


overview of eCommerCe in europe

10% Of thE wOrlD’s POPulAtIOn lIVEs In EurOPE, A wEll-COnnECtED MArKEt whErE 75% Of COnsuMErs ArE IntErnEt usErs.

Ecommerce in Europe continues to grow. In 2013, 30.5% of the world’s ecommerce sales came from this region5 and revenue from ecommerce grew 16.3% to usD 481.6 billion. this is 15% more than the previous year.6

yEt, thE EurOPEAn ECOMMErCE MArKEt tODAy Is VEry MuCh A gAME Of twO hAlVEs.

On one side we have western and Central Europe, where three global ecommerce powerhouses sit – the uK, germany and france. these three countries alone contributed 69% of European online sales in 2013.7 however, growth in these regions is slowing down as saturation points are being reached. Business growth outside of these regions is the next logical step.

On the other end of the scale we have Eastern and southern Europe, where connectivity, Internet penetration and ecommerce pene-tration still remains low. yet growth in these regions is high, sales in Eastern Europe have grown by 47.7%, and thus represents significant potential.

the uk Is thE lArgEst ECOMMErCE MArKEt In thE rEgIOn, wIth usD 152 BIllIOn In OnlInE sAlEs8, AnD 73% ECOMMErCE PEnEtrAtIOn9. thE uK sEEs frEquEnt usE Of MOBIlE COMMErCE; 27% Of All OnlInE trAnsACtIOns, wOrth usD 5 BIllIOn, OrIgInAtED On A MOBIlE DEVICE.10 thE COMPArAtIVEly lOw VAluE, hOwEVEr, InDICAtEs thAt Only lOw COst ItEMs ArE BEIng PurChAsED VIA MOBIlE, At PrEsEnt.

Online consumers in the uK prefer credit and debit card payments online; 40% and 35% respectively. Consumers are comfortable with cards and use them frequently, therefore alter-native payment penetration remains low.

63

4.0%

73

ONLINE PAYMENT PREFERENCE IN THE UK %

21.0% OTHER

PAYPAL

DEBIT CARD

CREDIT CARD

40.0%

35.0%

germany Is thE sECOnD lArgEst MArKEt In thIs rEgIOn, wIth usD 66.4 BIllIOn In OnlInE sAlEs11 AnD 77% ECOMMErCE PEnEtrAtIOn.12 MOBIlE COMMErCE sAlEs In gErMAny rEAChED OVEr 10% Of tOtAl OnlInE rEtAIl sAlEs In 2013, wOrth usD 5.9 BIllIOn.13

Payment preference in this market shows a marked difference from the uK, however. 60% of german online transactions are with online payment service providers, including PayPal, sOfOrt, ClickandBuy and giropay. Credit card makes up only a 10% share.14

5

eMarketer

6

gfK - European B2C

E-commerce report,

2014

7

Centre for retail

research, Online

retailing: Britain,

Europe and the us,

2014 and Ecommerce

Europe

8

IMrg-Capgemini

- eretail sales Index,

2014

9

Office for national

statistics, Internet

Access - households

and Individuals, 2013

10

IMrg-Capgemini eretail

sales Index, 2014

11

the german

E-Commerce and

Distance selling trade

Association (BEVh) -

B2C-studie 2013

liegen Vor - Interaktiver

handel, 2013

12

BItKOM – trends in

Ecommerce – Consumer

Behaviour and Online

shopping, 2014

13

ystats.com gmbh & Co.

Kg – global

M-Commerce,

smartphones and

tablets, 2014

14

BItKOM,

2014

4.2.2

PAYVISION 26


66

76

ONLINE PAYMENT PREFERENCE IN GERMANY %

ADVANCE PAYMENTDIRECT TRANSFER

CREDIT CARD

PURCHASE ON ACCOUNT

ONLINE PAYMENT SERVICES

40.0%

29.0%

10.0%

9.0% 6.0%

france Is thE thIrD lArgEst MArKEt In thE rEgIOn wIth A VAluE Of usD 51.1 BIllIOn15, AnD 34 MIllIOn frEnCh OnlInE COnsuMErs, 59% Of thE POPulAtIOn. MOBIlE ACCOuntED fOr 11% Of sAlEs, APPrOxIMAtEly usD 1.9 BIllIOn.

Credit and debit cards are also a preferred online payment option in france with 60% preference; a number of online customers use Carte-Blue (a debit card that can also be used as a credit card).

67

77

ONLINE PAYMENT PREFERENCE IN FRANCE %

CASHOTHER

BANK TRANSFER

PAYPAL

CREDIT AND DEBIT CARDS

57.0%

25.0%

9.0%

7.0% 2.0%

looking towards the emerging markets of Europe; russia, Poland in the east, and spain and Italy to the south, we see a different ecom-merce story.

ruSSIa lEADs thE EurOPEAn EMErgIng MArKEts, wIth usD 18 BIllIOn ECOMMErCE VAluE, But Only 21% ECOMMErCE PEnEtrAtIOn. MOBIlE DEVICE trAffIC COnstItutEs ArOunD 7% Of All

trAffIC, wIth A MOBIlE COMMErCE VAluE Of usD 1 BIllIOn. COMPOunD AnnuAl grOwth rAtE (CAgr) Of ECOMMErCE Is 28.3% frOM 2008 tO 2013.

In russia cash is king; 69% of online purchases are paid in this way. Credit card makes up the next proportion, but only 10% of all purchases.16

68

78

ONLINE PAYMENT PREFERENCE IN RUSSIA %

OTHER

CARD ON DELIVERY

E-MONEY

OFFLINE / PREPAID

CREDIT CARD

CASH

69.0%

10.0%

10.0%

5.0%

4.0% 2.0%

poland Is AnOthEr grOwIng MArKEt In EAstErn EurOPE. ECOMMErCE sAlEs In 2013 wErE VAluED At usD 5.5 BIllIOn, AnD ECOMMErCE PEnEtrAtIOn wAs 32%. whIlE MOBIlE COMMErCE VAluE rEMAIns lOw At usD 341 MIllIOn, ECOMMErCE CAgr wAs 19.6% frOM 2008-2013.

Cash is also the preferred online payment method in Poland but less so than russia; 45% of online purchases are paid as such. real-time online bank transfer took another significant proportion at 35%.17

69

79

ONLINE PAYMENT PREFERENCE IN POLAND %

OTHERREGULAR BANK TRANSFER

CREDIT / DEBIT CARDS

REAL-TIME BANK TRANSFER

CASH ON DELIVERY

45.0%

35.0%

10.0%

7.0% 3.0%

15

fEVAD (la fédération

du e-commerce et de la

vente à distance) -

rapport d’activité

2013/2014

16

Payvision – Cross-

Border Ecommerce

report, russia, 2014

17

Payvision – Cross Border

Ecommerce report,

Poland, 2014

4.2.2

PAYVISION 27


SpaIn Is OnE Of thE EurOPEAn MArKEts wIth thE grEAtEst POtEntIAl. stIll In rECOVEry frOM thE grIPs Of fInAnCIAl CrIsIs, sPAnIsh COnsuMErs ArE huntIng fOr ChEAPEr PrICEs. OnlInE sAlEs In 2013 wErE usD 18.5 BIllIOn18, wIth 32% Of thE POPulAtIOn shOPPIng OnlInE. MOBIlE COMMErCE Only MAKEs uP 6% Of tOtAl COMMErCE In sPAIn CurrEntly, But thE 66.5% grOwth In thE nuMBEr Of MOBIlE shOPPErs In 2013 DEMOnstrAtEs thIs sECtOr’s untAPPED POtEntIAl.19

In spain, interestingly, the preferred online payment method is credit and debit cards, making up 37% of purchases. 20

70

80

ONLINE PAYMENT PREFERENCE IN SPAIN %

OTHER

INSTALLEMENTSMOBILE

INVOICE

INTERNET BANKING TRANSFER

MICROPAYMENT SERVICES

CASH ON DELIVERY

CREDIT AND DEBIT CARD

37.0%

23.0%22.0%

7.0%

4.0%3.0%

3.0% 1.0%

More ecommerce data on specific European countries, can be found in our infographics library.

18

statista - B2C

e-commerce sales in

spain from 2012 to

2017, 2014

19

Comscore

20

Payvision – Cross Border

Ecommerce report,

spain, 2014

4.2.2

Cross-border eCommerCe in europe: drivers And ChAllenGes

DEsPItE MultIPlE lAnguAgEs tO CIrCuMnAVIgAtE, EurOPE Is wEll tunED In tO CrOss-BOrDEr ECOMMErCE As A VIABlE PrOfIt DrIVEr. suPPOrtED By InItIAtIVEs tO CrEAtE A sInglE OnlInE rEtAIl InfrAstruCturE, sAlEs AttrIButED tO OVErsEAs IMPOrt AnD ExPOrt In EurOPE As A PErCEntAgE Of tOtAl ECOMMErCE wAs 12.5% In 2013. thIs Is PrEDICtED tO DOuBlE In VAluE By 2018.21

the Digital Agenda 2020 is the first of a collection of schemes under the Europe 2020 umbrella, designed to drive overall economic growth in Europe. the Digital Agenda aims to propel economic growth through digital tech-nologies, not only by improving and stabilizing broadband connectivity but also by creating jobs in the digital sphere. Ecommerce lies at the heart of this program, as two of the initiative’s goals state that 50% of the population should be buying online and 20% of the population should be buying online cross-border by 2015.22

thE sInglE EurOPEAn PAyMEnt ArEA (sEPA) Is A sChEME lAunChED By thE EurOPEAn BAnKIng InDustry, DEsIgnED tO strEAMlInE PAyMEnts BEtwEEn BusInEssEs AnD MErChAnts In thE EurOZOnE. As wEll As IMPrOVIng BAnKIng sErVICEs In EurOPE, It AIMs tO sIMPlIfy thE COnDItIOns By whICh PAyMEnts CAn BE MADE AnD rECEIVED, MAKIng OnlInE shOPPIng A MOrE fAVOrABlE, AnD fAMIlIAr, ExPErIEnCE wIthIn EurOPE.

21

eMarketer, 2014

22

http://ec.europa.eu/

digital-agenda/about-

our-goals

4.2.3

PAYVISION 28


spAin, As A europeAn Cross-border mArket, holds the most promise. while m-CommerCe only mAkes up 6% of totAl spAnish eCommerCe, the 66.5% Growth in mobile shoppers indiCAtes the seCtor’s untApped potentiAl.

PAYVISION 29


however, the majority of our European respon-dents, 43%, do not feel strongly either way on whether sEPA and other initiatives have led to business growth. this can be attributed largely to a lack of governance, involvement of busi-nesses and structure around the migration of systems to sEPA. the final migration deadline of 1st february 2014 was missed, as well as the 6-month extension period. skepticism certainly surrounds the initiative, as indicated by our survey, and profitability has yet to be fully realized.

44

34SEPA AND OTHER EU INITIATIVES TO STIMULATE CROSS-BORDER ECOMMERCE WITHIN EUROPE HAVE BEEN EFFECTIVE AND LED TO BUSINESS GROWTH.

N/A

STRONGLY DISAGREE

DISAGREENEUTRAL

AGREE

STRONGLY AGREE

5.0% 43.0%

9.5%28.0%

5.0%

9.5%

As per the theme across Europe, the uK fuels the cross-border ecommerce engine, being the most popular destination in Europe for cross-border shoppers. yet British export significantly outweighs import; the uK having an expansive, varied domestic market from which to shop.

thanks to their popularity, and the trust in British products around the world, and common use of the English language, online merchants export to numerous markets both in Europe, and worldwide. the uK is in fact one of the largest export markets in the world, the highest proportion going to the us and China.23 yet despite the comparatively one-sided nature of the uK cross-border market, global ecom-merce is predicted to grow to usD 46.7 billion by 2020, and the uK is expected to have a 60% piece of that pie.24

thE tOP DEstInAtIOn COuntrIEs fOr CrOss-BOrDEr ECOMMErCE PurChAsEs By BrItIsh OnlInE COnsuMErs ArE usA At 70% AnD ChInA At 23%25.

64

CROSS-BORDER ECOMMERCE IMPORTS IN THE UK % UK BUYING FROM

0 10 20 30 40 50 60 70 80

IRELAND

GERMANY

HONG KONG

CHINA

US

23

PayPal - the Modern

spice routes, 2013

24

Econsultancy -

Ecommerce Platforms

Buyer’s guide, 2014

25


Kg – global Cross-

Border B2C

Ecommerce, 2014

4.2.3

PAYVISION 30


65

CROSS-BORDER ECOMMERCE EXPORTS FROM THE UK % UK SELLING TO

0 10 20 30 40 50

BRAZIL

AUSTRALIA

CHINA

US

OthEr COuntrIEs In EurOPE ArE wOrth nOtIng fOr thEIr CrOss-BOrDEr trEnDs. gErMAny, OnE Of thE EurOPEAn POwErhOusEs, Is A POPulAr DEstInA-tIOn fOr CrOss-BOrDEr shOPPIng, PArtICulArly wIth thE nOrDICs, As wEll As hAVIng A sIZABlE MArKEt Of 33 MIllIOn gErMAn COnsuMErs thAt hAPPIly shOP OVErsEAs.

the nordics are noteworthy for their cross-border activity; 56% of consumers from this region purchase overseas, mostly from the uK, the us and germany.

the netherlands and Belgium, while small in size, are active cross-border shoppers. Belgium in particular, with its language mix, shared borders and comfort with credit card use, saw an impressive usD 380 million cross-border ecommerce value in 2013. the netherlands in particular is notable for its cross-border export efforts. Offering their Belgian neighbors next day delivery, Dutch merchants offer a service comparable to domestic merchants.

france is the third most popular destination for cross-border online shopping in Europe, topped only by the uK and germany. 25% of french sites export, generating 10% of their sales internationally, supported by international demand for french fashion and beauty brands, as well as french wine.26

france, as a destination for cross-border expansion, offers a unique opportunity. while less prone to spontaneous purchases, french online consumers spend a long time researching, reading reviews and making comparisons. the result of this is the lowest return rate in Europe, around 10%, a note-worthy figure when considering cross-border return-management and customer care.

sPAIn Is stIll EMErgIng As A strOng ECOMMErCE DrIVEr In EurOPE. sPAnIsh CrOss-BOrDEr ExPOrts ArE lOw, But DrIVEn By A DEsIrE tO lOOK fOr lOwEr PrICEs, COuPlED wIth thEIr frEquEnt usE Of CrEDIt CArD, sPAnIsh COnsuMErs hAVE stArtED shOPPIng OVErsEAs MOrE frEquEntly.

Indeed, 43% of spanish online shoppers, some 20 million people, shop on overseas sites. the most popular destinations are the uK, China and germany.

the sheer size, and potential ecommerce power of russia can no longer be ignored. Despite a low ecommerce penetration rate, cross-border imports more than doubled in russia in 2013, and traffic to overseas sites quadrupled.27 Cross-border sales amounted to usD 2 to 3 billion in 2013; 18% of total russian ecom-merce. 40% of cross-border sales are generated

26

ystats – Europe

Cross-Border B2C

Ecommerce, 2014

27

ystats – Europe

Cross-Border B2C

Ecommerce, 2014

4.2.3

PAYVISION 31


from the us, another 40% from China, and up to 8% from the uK.

russia saw a 30% increase in online sales in 2013, a figure that still only makes up 2% of total retail at present.28 As connectivity grows, and younger generations become more tech-savvy, the potential value in this market is quite remarkable.

while the figures look promising, there are still some limitations to expansion within Europe.

while the majority of European markets are within the European union (Eu), merchants cannot forget the countries that sit outside the Eu, such as turkey, Albania and Iceland. we spoke to Mladen aMidžic from trilix, a payment and supply-chain technology provider for digital-goods merchants, based in Croatia, a country who only joined the Eu in 2013. he commented on the subject of non-Eu markets.

“our bIggeSt challenge IS communIcatIng

wIth varIouS cuStomS offIceS In countrIeS

outside the eu. for Countries Around CroAtiA

like serbiA, bosniA or mACedoniA, whiCh Are

not members of the europeAn Community, we

hAve to provide A loCAl system. it’s not the

most effiCient wAy for us to operAte. from

our two dAtA Centers in europe we Could

serve Any CompAny in the world. insteAd, for

retAilers in those non-eu Countries, unit

priCe for distribution of e-Goods Are hiGher

thAn they should be.” Mladen aMidžic, Trilix

As previously mentioned, Europe is also an incredibly popular global choice for cross-border ecommerce. this fact in itself contributes to the limitations of this region. Competition is high, as is consumer expectation. Consumers have their preferred online merchants, and the presence of some major players dominate the market.

thE rIsE Of AltErnAtIVE PAyMEnts AlsO POsEs ChAllEngEs In EurOPE fOr CrOss-BOrDEr ExPAnsIOn, InCrEAsIng thE COMPlExIty Of ExPAnDIng IntO thE VArIED MArKEts. wE sPOKE wIth PAyMEnts COnsultAnt, ErwIn PEtsCh, BAsED In AustrIA, whO COnfIrMED thE COMPlICAtIOns surrOunDIng thE rIsE Of AltErnAtIVE PAyMEnts frOM A CrOss-BOrDEr PErsPECtIVE.

“there IS Such a huge varIety of alternatIveS

In europe. from a payment provIder’S per-

speCtive, how to offer your merChAnt A

Comprehensive set of pAyment methods

thAt will Comfort most Consumers is A

mAjor ChAllenGe. the more methods you

offer, the more impACt it hAs on your Costs.”

erwIn petSch, paymentS conSultant

thIs lEADs us BACK tO thE nOtIOn Of CrEDIt CArD As A MAIn DrIVEr fOr CrOss-BOrDEr ECOMMErCE. whIlE AltErnAtIVE PAyMEnts sErVICE DOMEstIC MArKEts, thEy DO nOt EAsIly fACIlItAtE CrOss-BOrDEr ECOMMErCE. thIs Is EsPECIAlly rElEVAnt In A VArIED lAnDsCAPE suCh As EurOPE.

On top of this, the vast array of languages and cultures can make a pan-European presence complex, there is certainly no ‘one size fits all’ approach to this region, so businesses need to be adept at catering to multiple preferences.

28


border Ecommerce

report russia, 2014

4.2.3

PAYVISION 32


we spoke to róbert SztípIty, the CEO of shop.Builder; an online sports supplement retailer based in hungary. sztípity is facing this problem.

“we Sell to the whole eu, but we concen-

trate on neIghborIng countrIeS to hungary.

the different lAnGuAGes in europe Are A

biG issue for eCommerCe And provide us

with A lot of Complexity. we deCided to

hAve domAin nAmes for eACh Country. we

built our own And mAintAined our own

in-house trAnslAtion. we Are now stAndinG

At the point where findinG Good trAnslA-

tors for other lAnGuAGes is beCominG A

problem.” róbert SztípIty, Shop.buIlder

the landscape is certainly diverse, thus complex, in Europe for cross-border enterprise. with resources spent on localization, coupled with a primary focus on markets that are comfortable using credit cards, expansion into this region can be an extremely profitable decision. Especially when local partnerships are sourced.

when talking with Stephen mcdonough from realex, an acquirer in Dublin, he also confirmed this notion, particularly for small and medium enterprises where brand familiarity is lower. Partnerships are the fundamental to cross-border success.

“ If you’re a merchant reSIdent In the uk and

now you’re SellIng locally Into germany,

you hAve your GermAn website, you hAve

your fulfillment tAken CAre of in GermAny,

you hAve your tAx CorreCt for the mArket

And you’ve deCided whAt pAyment method

you wAnt to tAke. but how do you ColleCt

your funds from the GermAn mArket? do

you need to open A GermAn bAnk ACCount

or do you Give your pAyment provider

the Ability to ACCept the pAyment on

your behAlf And settle the funds bACk

into the merChAnt’s bAnk ACCount?

“how you get paId IS one of the more

Important conSIderatIonS that merchantS

don’t understAnd GoinG into the proCess.

“ [the Smaller merchantS] really Struggle

goIng croSS-border and really need the

AssistAnCe And ConsultAtion to mAke A

suCCess of it.” Stephen mcdonough, realex

But while cross-border ecommerce is not always straightforward, only merchants who tackle the challenges will reap the rewards. jeroen leenders, Managing Director of sale-supply, a global e-business services company helping merchants expand internationally, explains this tradeoff.

“croSS-border ecommerce IS certaInly eaSIer

SaId than done, but nowadayS the world IS

A smAller plACe And there Are prospeCts

for merChAnts willinG to tAke the risk.

opportunities exist beyond europe,

espeCiAlly in the emerGinG briC Counties,

where Consumers Are beCominG more And

more ConneCted viA their mobile deviCes.

“the key to SucceSSful croSS-border expan-

SIon IS a good product offerIng and faIr

priCes, Coupled with exCellent loCAlizA-

tion, to GAin overseAs Consumer trust. we

help CompAnies reAlize their Cross-border

potentiAl every dAy. with resourCes invest-

ed in understAndinG these mArkets, those

who tAke the risk, tAke the Glory.” jeroen

leenderS, managIng dIrector, SaleSupply

4.2.3

PAYVISION 33


mAjor plAyers

thE EurOPEAn CrOss-BOrDEr MArKEt Is fACIlItAtED By sOME MAjOr, trustED PlAyErs.

Amazon within Europe operates in the uK, france, germany, Italy and spain. from these sites, Amazon ships to all Eu member states, and declared an international (non-us) sales increase of 13.9% year over year in 2013 to usD 29.9 billion, making up 40.2% of Amazon’s total sales.29 Providing customers with a familiar and reliable customer experience, Amazon has accelerated European faith in cross-border shopping.

AsOs.com is a noteworthy player in the Euro-pean cross-border ecommerce space. winner of the ‘2013 Cross-Border Award’ in the Euro-pean Ecommerce Awards, AsOs provides free shipping to customers in 234 countries and territories worldwide from the uK. International sales make up 62% of total sales30, and in 2013 AsOs launched their Chinese language site, bringing the total language sites to 9.

29

Internet retailer

30

telegraph.co.uk

4.2.4

4.2.5 summAry

EurOPE Is A tOP ChOICE fOr CrOss-BOrDEr ECOMMErCE BusInEss. wIth 10% Of thE wOrlD’s POPulAtIOn lIVIng In thIs rEgIOn AnD A gOOD lEVEl Of COnnECtIVIty, thE PurChAsIng POwEr Is COnsIDErABlE.

this is evident both in our survey results, and in global ecommerce data. 12% of European ecommerce was attributed to import and export from overseas, facilitated by major players such as Amazon and AsOs, despite multiple languages and varied cultures.

wIth sChEMEs suCh As thE DIgItAl AgEnDA 2020, AnD sEPA, stEPs ArE CErtAInly BEIng tAKEn tO grOw thE EurOPEAn DIgItAl ECOnOMy, AnD strEAMlInE CrOss-BOrDEr PurChAsIng AnD sEllIng.

today the market is divided, with western and Central European markets leading the way. the heartbeat comes from the uK, germany and france, who alone contributed almost 70% to the total European ecommerce value. however

growth in these regions is slowing, where domestic saturation points are being reached. Competition in these markets is high, where domestic availability is greater than other coun-tries, driving less desire for consumers to look across borders.

the Eastern and southern markets of Europe are demonstrating significant growth, however, largely driven by increased mobile connectivity. these markets could make for a less-crowded business prospect.

spain in particular is a market to consider. unlike other developing markets in Europe, spanish online consumers are comfortable credit card users, and with lower domestic availability are comfortable looking online for overseas bargains.

PAYVISION 34


reGionAl breAkdown - Cross-border eCommerCe in north AmeriCA

our survey sAys…

thE us AnD CAnADA, A rEgIOn unIfIED By OnE MAIn lAnguAgE, Is thE PrIMAry ChOICE fOr CrOss-BOrDEr COMMErCE frOM Our surVEy PArtICIPAnts. Our EurOPEAn surVEy PArtICIPAnts PlACED nOrth AMErICA In jOInt fIrst PlACE wIth thE OCEAnA rEgIOn, BOth At 52% PrEfErEnCE, AnD nEIghBOrIng lAtIn AMErICAn rEsPOnDEnts MADE It thEIr tOP ChOICE 75% Of thE tIME.

Our respondents within the us are reason-ably split in terms of their focus; 47% of us merchants agree that their focus is on Canada within north America, rather than the latin American region. 37% disagree, but only 6% are neutral, indicating that there is a strong feeling in both directions.

48

38AS AN AMERICAN RETAILER OUR PRIMARY FOCUS FOR CROSS-BORDER ECOMMERCE IS CANADA RATHER THAN LATIN AMERICA.


DISAGREE

NEUTRAL AGREE

STRONGLY AGREE

6.0% 30.0%

30.0%

10.0%7.0%

17.0%

when discussing overseas expansion plans with Danny fraser from the us based business web.com, a seller of web domains and services, he explained his rationale, and the challenges he is facing.

“we juSt opened up and Started proceSSIng

to canada and are In the proceSS of lookIng

At lAtin AmeriCA.

“marketIng IS really drIvIng what

geographIeS we are lookIng to expand Into.

web.Com is the primAry sponsor of the

feeder series for the pGA (professionAl Golf

tour), so the plACes the tour is GoinG Are

the plACes we wAnt to be AvAilAble. those

Are drivinG the deCisions. they do some

tourinG in europe And those will be next on

the list but probAbly not until next yeAr.

“we choSe to expand Into canada fIrSt be-

cauSe we already have a local preSence. but

even with thAt, it wAs not smooth. the

ContrACtinG with our proCessinG wAsn’t

As seAmless As one would hAve thouGht. it

wAs more of An ordeAl lookinG At priCinG

And how to tie it to the u.s. ContrACt. we

used our existinG proCessor, but it still

wAsn’t simple.” danny fraSer, web.com

4.3.1

4.3

PAYVISION 35


with strong year-on-year performance in this region, it is clear why the majority of the world looks to north America for cross-border oppor-tunities. the us is a consumer-driven nation of big spenders, with plenty of credit cards in their wallets, the cross-border ecommerce bridge.

while the use of alternative payments is growing more popular, making cross-border selling more complex for us merchants, 64.5% of our surveyed merchants agreed the globally preferred online payment is still credit card.

similarly to Europe, our respondents’ feelings about expanding into north America were

mixed. On one hand, there are opportunities and potential profits to be made, testified by the number of businesses that have success-fully expanded into this region. unlike Europe, the culture and language is similar across the region. It has been possible for businesses to penetrate a unified market with one uniform strategy and minimal efforts in localization.

But on the other hand, competition in north America is intense. Product offerings should be well considered to stand out in a market of consumers accustomed to shopping around and getting the best deal.

overview of eCommerCe in north AmeriCA

nOrth AMErICA hAs lOng BEEn thE glOBAl ECOMMErCE gIAnt. wIth A MArKEt 529 MIllIOn strOng, APPrOxIMAtEly 7% Of thE wOrlD POPulAtIOn, sAlEs frOM thIs rEgIOn In 2013 AMOuntED tO usD 431 BIllIOn, A usD 51 BIllIOn InCrEAsE On thE PrEVIOus yEAr.31 wIth A 78.6% IntErnEt PEnEtrAtIOn In thE rEgIOn, nOrth AMErICA Is wEll COnnECtED COMMunIty.

the uS sPECIfICAlly wItnEssED tOtAl rEtAIl sAlEs tO thE tunE Of usD 4.5 trIllIOn Is 2013, AnD ECOMMErCE MADE uP A sIgnIfICAnt PrOPOrtIOn Of thIs fIgurE; usD 263 BIllIOn, 17% Of tOtAl rEtAIl.32

Ecommerce penetration of the over-14 popu-lation is around 75.8%, and almost 80% of all Internet users shop online. Mobile is a popular channel; mobile devices are held by 110% of the population (many users have more than one device), with smartphones in the majority, owned by 69%.33 sales via a mobile device totaled usD 42.1 billion in 201334, and are predicted to reach usD 86 billion in 2014.35

American consumers are hot on credit and debit cards; they account for a 40% and 29% share of online payments, respectively. Alter-native payments are also gaining traction, with 18% preferring to pay through e-wallets, PayPal or google Checkout.36

31

eMarketer

32

eMarketer

33

Comscore

34

eMarketer

35

forrester research Inc

36


Border Ecommerce

report usA, 2013

4.3.2

4.3.1

PAYVISION 36


71

81

ONLINE PAYMENT PREFERENCE IN THE US %

STORE CARDSPREPAID OR GIFT CARDS

ALTERNATIVE PAYMENTS

DEBIT CARD

CREDIT CARD

40.0%

29.0%

18.0%

8.0% 5.0%

yet the long-standing ecommerce front runner was overtaken by the booming Chinese market in 2013. where the us is seeing reduced growth, 13.5% in 2013, from 16% in 2012, Chinese consumers are growing confident, and witnessing more mature online payment systems coming into play, such as AliPay and tenpay, as well as a growing popularity for universally accepted credit card payments.

canada, On thE OthEr hAnD, Is A yOuthful ECOMMErCE MArKEt. In 2013, ECOMMErCE sAlEs wErE just unDEr usD 20 BIllIOn, AnD COnsErVAtIVE PrEDICtIOns ExPECt thIs VAluE tO rEACh usD 35.7 BIllIOn In 2014.37 whIlE thIs fIgurE Is sIgnIfICAntly lOwEr thAn Its hEAVywEIght nEIghBOr, thE

fACt thAt AlMOst hAlf Of thEsE OnlInE sAlEs wErE MADE CrOss-BOrDEr MAKEs CAnADA An IntErEstIng MArKEt tO COnsIDEr.

smartphones are owned by 47% of the popu-lation, and sales via a mobile or tablet contrib-uted usD 1 billion, accounting for 5%, to the total ecommerce value.

Canadians, like their American neighbors, are also comfortable using credit cards, with a 58% preference share, contributing to the cross-border shopping power of Canada.38

72

82

ONLINE PAYMENT PREFERENCE IN CANADA %

CASH ON DELIVERYDEBIT CARD

PAYPAL

CREDIT CARD

52.6%

42.0%

3.0% 2.4%

More specific ecommerce data on north America can be found in our infographics library.

37

eMarketer

38


Border Ecommerce

report Canada, 2013

Cross-border eCommerCe in north AmeriCA: drivers And ChAllenGes

thE us Is thE lArgEst MArKEt wOrlDwIDE fOr CrOss-BOrDEr ECOMMErCE, BOth IMPOrt AnD ExPOrt. thE grEAtEst flOw Of CrOss-BOrDEr sAlEs OCCur BEtwEEn thE us AnD thE uK, MAKIng thEM thE glOBAl lEADErs fOr CrOss-BOrDEr B2C OnlInE shOPPIng.39

A relative similarity in language and culture, as well as online payment preference facilitates

this strong exchange. Both markets are confi-dent and frequent credit card users.

39


Border Ecommerce,

2014

4.3.2

4.3.3

PAYVISION 37


A major driver for online consumers in north America is convenience, valued by consumers over price. In such a mature market, customer expectations are high, and service must be exceptional to convert consumers. Mobile commerce significantly contributes to this need

for convenience; online shopping now sits in the palm of the consumer’s hand.

In the us alone there are 34.1 million cross-border shoppers, who spent usD 40.6 billion in 2013.40 they mostly purchase from the uK (49%) and China (39%).

73

83

CROSS-BORDER ECOMMERCE IMPORTS IN THE US % US BUYING FROM

0 10 20 30 40 50

AUSTRALIA

HONG KONG

CANADA

CHINA

UK

the us is also a global leader for export, being a top choice for cross-border shopping from the majority of countries across the globe, including China with an 84% share of cross-border purchases from that region, and the uK at 70%. strong infrastructure and logistics provide a driver of cross-border ecommerce growth.

Demand for us products was worth around usD 23 billion in 2013, a value expected to grow to usD 83 billion by 2018. 41

40

PayPal – the Modern

spice routes, 2013

41


spice routes, 2013 and

Postnord Ecommerce in

Europe, 2014

4.3.3

PAYVISION 38


74

84

CROSS-BORDER ECOMMERCE EXPORTS FROM THE US % US SELLING TO

0 20 40 60 80 100

SPAIN

FRANCE

THE NORDICS

CANADA

GERMANY

AUSTRALIA

UK

CHINA

One of the major drivers for ecommerce, both domestic and cross-border, in the us is the holiday season. A massive 25% of all retail spending is generated in november and December. holiday sales in the us reached 46.5 billion in 2013, up 10% from 2012.

In 2013 the biggest shopping day was Cyber Monday, the first Monday after thanksgiving. sales reached usD 1.7 billion on this day alone. Black friday generated usD 1.2 billion.42

75

85

REVENUE GENERATED BY KEY DATES IN THE US, IN USD BILLIONS

0,0 0,5 1,0 1,5 2,0

GREEN MONDAY

CYBER MONDAY

BLACK FRIDAY

THANKSGIVING

Mobile commerce is once again a central facili-tator to these figures. During the 2013 holiday season, 29% of ecommerce orders were placed on a mobile device. Brain Monahan, the VP of Marketing at wal-Mart, confirmed that over

half of Black friday traffic came from mobile devices.43

In Canada, the usA’s nascent neighbor, the cross-border purchasing power is quite remark-able; 45% of online purchases in 2013 were

42

Comscore

43

Brian Monahan, VP of

Marketing at wal-Mart,

speaking at the Ad Age

Digital Conference.

4.3.3

PAYVISION 39


from non-Canadian websites.44 Certainly not an insignificant figure when we compare to the us, the global leaders in cross-border ecommerce, who only attributed 15.4% of their online retail spend from cross-border purchasing.45

the preferred destination for cross-border purchasing is the us, understandably, where common language and proximity play a key role.46 lower prices and greater product offer-ings in the us also contribute to Canadian ease with online shopping from their neighbor.

76

86

REVENUE GENERATED BY KEY DATES IN THE US, IN USD BILLIONS

0 5 10 15 20 25 30 35

EUROPE

ASIA

US

while there are plenty of reasons to expand in north America, the region of big spenders, there are some limitations that should also be considered.

the us is a strong but mature market, in which only 15.4% of ecommerce can be attributed to cross-border. while this is still a significant sum, it is still worth noting that American consumers

can get a vast array of products and services in their own domestic market. Coupled with a need for second-to-none convenience and experience, the us can be a challenging domain for new players. It may be that Canada, the vastly smaller market of the region, would be more open to foreign players offering a better product at the right price

44

eMarketer

45


spice routes, 2013

46

eMarketer

4.3.3

mAjor eCommerCe plAyers

AMAZOn Is A MAjOr PlAyEr In thE ECOMMErCE MArKEt Of BOth CAnADA AnD thE us, yEt thE PrODuCt OffErIngs AnD PrICEs ArE fAr suPErIOr On thE AMErICAn VErsIOn, DrIVIng CAnADIAn CrOss-BOrDEr shOPPIng IntErEst.

Canadians can purchase products from the us Amazon site with a price tag 50% lower or more. Even when duty and taxes are added, the price is still favorable. how-to websites, such as CrossBordershopping.ca, have been created for the sole purpose of aiding Canadian consumers through the process of purchasing cross-border,

providing price comparison tools and outlining grey areas such as return policies, taxes and restrictions.47

the American marketplace eBay.com has a large global presence and product offerings, with both consumer to consumer (C2C) and

47

http://www.

crossbordershopping.ca/

4.3.4

http://www.crossbordershopping.ca/

http://www.crossbordershopping.ca/

PAYVISION 40


4.3.4 B2C. eBay in particular have created a gap in the cross-border ecommerce marketplace for small and medium enterprises (sMEs). Consumers overseas can visit a storefront that they recognize with payment options they trust.

eBay alone facilitated over usD 45 billion in cross-border ecommerce import and export trade and payments in 2013, indeed 97% of all

us commercial sellers on eBay export, 81% to more than five countries.48

the us Department of Commerce and eBay have recently entered into a partnership to further educate the market, and drive cross-border trade in the us. us businesses are realizing that while their domestic market is slowing, there is great purchasing potential in the rest of the world.49

48

eBay – us Marketplace,

2014

49

http://www.commerce.

gov/news/press-

releases/2014/02/26/

us-department-

commerce-and-ebay-

inc-announce-

partnership-promote-

us-e

summAry

thE nOrth AMErICAn MArKEt, thE lOng-tErM glOBAl lEADEr Of ECOMMErCE, Is CErtAInly thE MOst POPulAr DEstInAtIOn fOr BOth ExPOrt AnD IMPOrt CrOss-BOrDEr trADE. thIs Is thAnKs tO A lArgEly unIfIED lAnguAgE AnD CulturE, A frEquEnt AnD COMfOrtABlE usE Of CrEDIt CArDs, AnD A wIDE PrODuCt OffErIng.

In Canada, while the spend values are lower, 45% of online purchases were made cross-border compared to only 15.4% in the us. understandably, these purchases are mostly made in the neighboring us, where prices are lower and selection is higher. But the comfort with which Canadians shop cross-border could make an interesting business proposition for other overseas merchants.

the us is the source of power in this region; the global leader for import and export ecom-merce, mostly trading with the uK, the Euro-pean leader. American consumers, the kings of convenience, saw mobile commerce contrib-uting heavily to this. this was a particularly significant driver of holiday sales; the strongest north American ecommerce season.

hOwEVEr, grOwth In thE us MArKEt Is slOwIng. In 2013 thE us wAs OVErtAKEn By ChInA In ECOMMErCE VAluE tErMs.

AMErICAn MErChAnts, nOw fACIng A DOMEstIC slOwDOwn, CAn CErtAInly sEE thE VAluE Of PursuIng A BusInEss BEyOnD thEIr BOrDErs, tO KEEP thE MOMEntuM Of ECOMMErCE grOwth.

4.3.5

http://www.commerce.gov/news/press-releases/2014/02/26/us-department-commerce-and-ebay-inc-announce-partnership-promote-us-e

PAYVISION 41


reGionAl breAkdown - Cross-border eCommerCe in AsiA

4.4

our survey sAys…

Our surVEy rEsPOnDEnts shOwED A lACK Of EnthusIAsM fOr ExPAnsIOn IntO AsIA, An IntErEstIng rEVElAtIOn whEn wE COnsIDEr thE rIsE In POwEr Of AsIA, AnD thE PurChAsIng POtEntIAl Of thIs MArKEt.

Only 11% of our north American respondents and 14.3% of our European respondents believe that expansion into Asia, specifically China, would be profitable.

45

35CROSS-BORDER ECOMMERCE WITH CHINA WOULD BE MORE PROFITABLE THAN OTHER MARKETS.

N/A

NEUTRAL

NO

YES

14.2%

19.0%

19.0%

48.7%

49

39AS AN AMERICAN RETAILER, CROSS-BORDER ECOMMERCE WITH CHINA WOULD BE MORE PROFITABLE THAN OTHER INTERNATIONAL MARKETS.

N/A

NEUTRAL

NO

YES

11.0%

29.0%

35.0%25.0%

It is no secret that Asia will be a driving force for ecommerce growth in 2014 and beyond. when

we asked our survey respondents about the barriers to entry into this blooming market, the opinions were mixed.

In north America it was an even split between local legislation, logistics, and language and culture, each at 24%. European survey respon-dents, however, are more cautious in terms of Chinese legislation, indicating a 25% majority.

the Chinese are not unaccustomed to shopping outside of their own borders. there are now 18 million Chinese cross-border shoppers, spending usD 35 billion in 2013. not an insignificant sum. yet for the major markets of Europe and north America, aspects of Asian business are so different, it presents an entirely different puzzle to solve than other global markets. this challenge is off-putting for a large number of merchants.

thIs lACK Of EnthusIAsM, whIlE CAusIng A lEMMIng AttItuDE Of, “If thEy ArEn’t gOIng tO DO It, nEIthEr wIll wE”, Is An OPPOrtu-nIty wAItIng tO BE sEIZED. If BusInEssEs ArE BOlD EnOugh tO ClAIM A PIECE Of thE AsIAn PIE, thE PrOfIts COulD BE hugE.

4.4.1

PAYVISION 42


4.4.2 overview of eCommerCe in AsiA

thE AsIAn ECOMMErCE MArKEt Is A DIVErsE lAnDsCAPE, AnD OnE thAt Is BurstIng wIth POtEntIAl. It Is AntICIPAtED thAt 2014 wIll BE thE yEAr thAt AsIA tAKEs CEntEr stAgE.

Asia makes up a massive 55.6% of the world population, with 1.2 billion Internet users, 31.7% penetration in the region. the online sales in this region were up usD 82.7 billion from 2012, to usD 383.9 billion in 2013, growth driven mostly by China, India and Indo-nesia.

thE AsIAn MArKEts VAry InCrEDIBly. frOM thE rIsIng lEADEr ChInA, AnD DEVElOPED jAPAn, tO thE InfAntIlE yEt BOOMIng MArKEts Of InDIA AnD InDOnEsIA. All MArKEts ArE PrOjECtED tO wItnEss sIgnIfICAnt grOwth, fACIlItAtED By BEttEr COnnECtIVIty, A MAturIng gEnErAtIOn Of tECh-usErs AnD InCrEAsED MOBIlE PEnEtrAtIOn.

for some consumers, mobile Internet is their first experience online. shipping and payment options become more mature, and online consumer trust is growing.

Digital wallets have a substantial share of total ecommerce payments in the Asia-Pacific region, though still behind credit and debit card. use of credit cards in the Asia-Pacific region is certainly on the rise; cards in circulation totaled over 5 billion at the end of 2013, up almost 17% from 2012. China unionPay has the majority share of over 50%, beating Visa and MasterCard.

this trend towards credit card spending brings Asia in line with the rest of the world; credit cards bind the markets and bring substantial cross-border ecommerce potential.50

AsIA Is unDIsPutEDly thE nExt MArKEt tO wAtCh.

chIna Is At thE hEArt Of AsIAn ECOMMErCE, AnD nOw fOr thE fIrst tIME thE glOBAl lEADEr In ECOMMErCE. wIth OnlInE sAlEs tO thE tunE Of usD 296 BIllIOn In 2013,51 stIll Only 14% Of thE ChInEsE POPulAtIOn ArE BuyIng OnlInE.

Online B2C retail has grown at a staggering 116.5% CAgr from 2008 to 2013.52 we can only begin to imagine the purchasing potential as ecommerce gains further traction.

the Beijing Electronic Commerce Association (BECA) confirms this explosive growth. As it stands today, there are over 29,000 companies focusing solely on ecommerce, including B2B, C2C and B2C. they are facilitating over 2.35 million direct ecommerce jobs and over 16.8 million indirect jobs. the cross-border share of overall foreign trade is 10%. .

M-commerce is the tour de force for China; mobile shopping reached usD 27.4 billion in 2013, up 168.6% year on year. It is projected to exceed usD 161.8 billion by 2017.53

AliPay, an alternative payment provider, takes the lion’s share of online transactions; 60% of Chinese consumers choosing this method of payment. the online payment system owned by Alibaba group is in fact the world leader with usD 150 billion transaction volume in 2013. 100 million registered mobile users have completed more than 2.78 billion transac-tions.54

this payment preference is not an insignifi-cant detail for businesses looking to enter the Chinese market; credit cards still make up a

50

ystats - Asia-Pacific

Online Payment

Methods - first half

2014

51

Chinese Ministry of

Commerce

52

Euromonitor

International – Internet

retailing in China, 2014

53

iresearch Consulting

group – 2014 China

Ecommerce report,

2014

54

Alipay official weibo

announcement

http://weibo.com/alipay

PAYVISION 43


in ChinA there Are over 29,000 CompAnies foCusinG solely on eCommerCe, fACilitAtinG over 2.35 million direCt And over 16.8 million indireCt eCommerCe jobs. on top of this, the Cross-border shAre of overAll foreiGn trAde is 10%, ACCordinG to the beijinG eleCtroniC CommerCe AssoCiAtion (beCA).

PAYVISION 44


minority preference for online payments. But this proportion is on the rise; China is one of the world’s fastest growing credit card markets as consumers gradually accept the credit consumption concept, coupled with a growing desire to shop cross-border. Chinese online consumer credit card penetration reached 82% at the end of 2013.55

77

87

ONLINE PAYMENT PREFERENCE IN CHINA %

OTHER CREDIT CARDS

CHINA UNION PAY CREDIT CARD

CASH ON DELIVERY

ALIPAY

60.0%

20.0%

11.0%

9.0%

japan Is AnOthEr AsIAn MArKEt wOrth PAyIng AttEntIOn tO. OnlInE rEtAIl tOtAlED usD 44 BIllIOn56 In 2013, AnD OVErAll ECOMMErCE Is VAluED At ClOsE tO usD 118 BIllIOn.57 75% Of thE jAPAnEsE POPulAtIOn ArE PurChAsIng OnlInE.

Mobile is another interesting trend impacting japanese commerce. japan rates 3rd globally in total app usage, at an average of 40 apps per phone, and ranks highest globally in paid app usage at 18 apps per phone.58 In 2013 22% of online shopping was conducted through mobile devices. this amounted to approximately usD 9.7 billion. 59

japanese consumers are credit card fans, with nearly 60% preferring to pay with this method. the second choice, interestingly, is to pay at a Konbini (convenience store) at 16.6%.60 this highlights the omni-channel need for conve-nience in this market.

78

88

ONLINE PAYMENT PREFERENCE IN JAPAN %

OTHER

BANK TRANSFER

ELECTRONIC CURRENCY

INVOICE OR BILLING RECEIPT

KONBINI

CREDIT CARD

59.6%11.6%

16.6%

4.7%

3.5%4.0%

SIngapore, whIlE A COnsIDErABly sMAllEr ECOMMErCE MArKEt COMPArED tO thE ChInEsE AnD jAPAnEsE gIAnts, Is A nAtIOn Of wEll-COnnECtED, tECh-hAPPy COnsuMErs. sIngAPOrE AlsO stAnDs Out wIth rEgArDs tO CrOss-BOrDEr ECOMMErCE.

Ecommerce sales in 2013 totaled usD 1.3 billion with 89% of the population shopping online. But mobile, as per the trend across Asia, is where singapore’s potential lies; mobile penetration is an overwhelming 156%. smart-phones are owned by 88% of the population and tablet penetration is high, at almost 50%. Mobile commerce was valued at usD 259 million.

Mobile is a popular form of C2C spending in singapore. Apps such as Carousell allow for mobile based C2C selling and purchasing, and drive the mobile commerce industry. this particular app has over 500,000 products listed on the app, and on Android it has between 50,000 to 100,000 total installs, major indica-tors of the app’s popularity.61

Cash and credit card both hold a comparable share of online payment preference at 40% and 39% respectively.62

55

iresearch Consulting

group – 2014 China

Ecommerce report,

2014

56

Euromonitor


retailing in japan, 2014

57

statista

58

frost & sullivan - japan

ICt outlook, 2014

59

Euromonitor

International - Internet

retailing in japan, 2014

60


Border Ecommerce

report, 2014

61

techinAsia

62


Border Ecommerce

report singapore, 2014

4.4.2

PAYVISION 45


79

89

ONLINE PAYMENT PREFERENCE IN SINGAPORE %

OTHER

PRE-PAID CARD

ELECTRONIC PAYMENT

DEBIT CARD

CREDIT CARD

CASH

40.0%

39.0%

14.0%

3.0%

2.0%2.0%

In IndoneSIa, stIll A sMAll, EMErgIng MArKEt, COnnECtIVIty — A DIrECt DrIVEr fOr ECOMMErCE grOwth — hAs grOwn sIgnIfICAntly OVEr rECEnt yEArs. MOBIlE PEnEtrAtIOn Is 117% AnD InDOnEsIAns tOP thE AsIA PACIfIC rEgIOn wIth MOrE thAn hAlf (54.5%) Of sMArtPhOnE usErs usIng thEIr DEVICE tO shOP. thE InDOnEsIAn ECOMMErCE MArKEt Is VAluED At APPrOxIMAtEly usD 1 BIllIOn, wIth MOBIlE COMMErCE At usD 8.5 MIllIOn.

Bank transfer is the preferred online payment method in Indonesia, with a 57% share. Cash on delivery is also popular, at 28%.63 Interestingly, one of the most popular ecommerce sites in Indonesia is facebook, where users commonly post ads and link out to payment providers.

80

90

ONLINE PAYMENT PREFERENCE IN INDONESIA %

OTHER

CREDIT CARD

CASH ON DELIVERY

BANK TRANSFER

57.0%

28.0%

7.0%8.0%

the ecommerce market in India is incredibly immature. Currently, only 11.4% of the popula-

tion is connected to the Internet and under 2% of the population shops online64. Ecommerce value, however, was usD 16 billion in 201365, a figure comparable to that of Canada or spain. with only 2% of the population driving this figure, India is a country full of untapped ecom-merce potential.

Ecommerce sales in India have grown at a staggering 460% since 2009. with 75% of online shoppers under the age of 35, it is obvious from where the growth engine is being fuelled.66 Mobile commerce is yet to fully take flight, with 5% of ecommerce made via a mobile device in 2013 with a total value of around usD 800 million.67 But considering that almost as many Indians own a smartphone, 10% of the population, as are connected to the Internet, mobile could be the key to unlock this market.

In India, cash on delivery and rechargeable cash cards are the preferred payment methods at 37.5% share. Mobile payments account for 4% of all transactions, further indication that mobile is a vital facilitator for ecommerce.

81

91

ONLINE PAYMENT PREFERENCE IN INDIA %

E-WALLET

DIRECT DEBIT

MOBILE

CREDIT CARD

BANK TRANSFER

CASH ON DELIVERY OR RECHARGABLE CASH CARD

37.5%

29.3%

24.0%

4.0%

3.7%1.5%

South korea, On thE OthEr hAnD, Is tEChnOlOgICAlly-sMArt. 71.1% Of thEIr 50 MIllIOn POPulAtIOn ArE shOPPIng OnlInE68, A fIgurE Only MArgInAlly BEhInD thE EurOPEAn ECOMMErCE gIAnt, thE uK, whErE 73% Of thE 64 MIllIOn POPulAtIOn shOP OnlInE.

63


Border Ecommerce

report Indonesia, 2014

64

Internet retailer

65

IBnlIve.com

66

Comscore

67

estatsIndia

68

statistics Korea -

E-commerce and Cyber

shopping survey in

2013

4.4.2

PAYVISION 46


yet south Korean ecommerce sales in 2013 were valued at usD 10.2 billion, a mere 6% of the uK value. south Korea does not lack the capital; it is among the top 15 countries in the world ranked by gDP, only 9 places behind the uK.69 while the numbers show that this market holds remarkable potential, the discrepancy in value shows us that confidence in frequent, high-value spending is simply not yet in place.

Mobile, again, is a major driver in south Korea. Valued at 2.8 billion, almost 30% of total ecommerce.70 this value is set to reach usD 9.7 billion in 2014. Indeed, the Korean mobile commerce market has grown at a CAgr of 154.7% since 2011, 2.5 times faster than the us. 71

Koreans prefer to pay online by credit cards which account for nearly 75% of the market. Money transfer is second, but with only a 19.9% share.72

82

92

ONLINE PAYMENT PREFERENCE IN SOUTH KOREA %

OTHERE-MONEY

MONEY TRANSFER

CREDIT CARD

74.9%19.9%

1.6% 3.6%

More specific ecommerce data on Asian coun-tries can be found in our infographics library.

69

united nations statistics

Division. 2013.

70

statistics Korea -

E-commerce and Cyber

shopping survey in

2013 and in the fourth

quarter 2013, 2014

71

sK Planet, 2014

72

ystats – global

Alternative Payment

Methods, 2014

Cross-border eCommerCe in AsiA: drivers And ChAllenGes

thE AsIA rEgIOn Is OPEnIng uP tO CrOss-BOrDEr ECOMMErCE, BOth IMPOrt AnD ExPOrt. just As thE ECOMMErCE lAnDsCAPE VArIEs InCrEDIBly ACrOss thIs VAst rEgIOn, sO DOEs thE PArtICIPAtIOn AnD MOtIVAtIOn In CrOss-BOrDEr shOPPIng.

singapore continues to be a leading cross-border ecommerce country in Asia, with the highest share of transactions (55%), consider-ably higher than japan and south Korea (18% and 25% respectively). 73 the main drivers for shopping overseas are lack of availability in their domestic market and greater choice overseas rather than lower prices, a consideration when expanding into this region.

Preferred purchases are overwhelmingly media-related; books and movies as well as music and video games.

Online consumers in singapore mostly shop from the usA, accounting for 55% of all cross-border purchases. American online consumers are less likely to purchase from singapore, however; only 25% of ecommerce exports go to this market. Indeed, the cross-border export market is considerably lower than the import, approximately 20%, made up mostly of trav-el-related purchases.

73


Border B2C

E-Commerce 2014

4.4.3

4.4.2

PAYVISION 47


84

94

CROSS-BORDER ECOMMERCE IMPORTS TO SINGAPORE % SINGAPORE BUYING FROM

0 10 20 30 40 50 60

OTHER

CHINA

EU

JAPAN

SOUTH KOREA

US

83

CROSS-BORDER ECOMMERCE EXPORTS FROM SINGAPORE % SINGAPORE SELLING TO

0 5 10 15 20 25 30

OTHER

CHINA

EU

SOUTH EAST ASIA

US

But while singapore leads the way for cross-border in Asia, other regions are catching up.

In China, cross-border sales are growing considerably. Overseas shopping via Alipay, the third-party payment platform under Alibaba, grew by 117% in 2013, compared to the 64.7% growth for domestic online shopping.

thErE ArE nOw 18 MIllIOn ChInEsE CrOss-BOrDEr shOPPErs, AnD thEy sPEnt usD 35 BIllIOn In 2013. thE PrEfErrED DEstInAtIOn Is wEstErn EurOPE.

4.4.3

PAYVISION 48


85

95

CROSS-BORDER ECOMMERCE IMPORTS TO CHINA % CHINA BUYING FROM

0 2 4 6 8 10 12

TAIWAN

JAPAN

KOREA

EASTERN EUROPE

WESTERN EUROPE

yet export makes up the vast majority of cross-border ecommerce transactions in China (90%).

Chinese online merchants export mostly to japan, the us and russia.74

86

96

CROSS-BORDER ECOMMERCE EXPORTS FROM CHINA % CHINA SELLING TO (B2B AND B2C)

0 5 10 15 20 25

INDIA

SOUTH EAST ASIA

EU

RUSSIA

US

JAPAN

Business opportunities certainly exist for foreign merchants in China, where there is significant demand for western products (and not only luxury, high-end items). Products that place consumer emphasis on trust, such as maternity and baby products are popular. Over-seas spending in China has increased ten-fold since 2010. Indeed, 50% of these purchases from overseas are baby milk formulas and health supplements. 75

74

the Beijing Electronic

Commerce Association,

2014

75

China Internet watch

4.4.3

PAYVISION 49


87

97

CHINESE ONLINE OVERSEAS SHOPPING MARKET IN USD BILLIONS

0

5

10

15

20

25

20142013201220112010

Driven largely by mistrust for domestic prod-ucts, an industry known as haitao, literally ‘ocean search’—searching and purchasing online abroad—is on the rise in China. the industry is currently dominated by unregulated small-scale, informal businesses such as Chinese expats selling back to China. But these statistics present interesting opportunities for the right businesses interested in expanding into China.

Indeed, when considering that the results of our survey indicate the Chinese market is too complicated for many businesses operating outside China, there is a current gap in the market waiting to be filled by the right interna-tional merchant. with time invested in interna-tional partnerships, providing local insight and knowledge, barriers to entry are considerably lower.

One of the latest facilitators and drivers for Chinese overseas trade, both import and export, is the set-up of the pilot cities for cross-border ecommerce.

six cities within China—Zhengzhou, shanghai, Chongqing, ningbo and two operating in hangzhou—will be the focus of the project, where favorable economic and foreign trade

conditions exist. the local customs bureau and other related government agencies have simpli-fied their clearance procedures and boosted the process for tax rebates, foreign exchange settlement and other services. this aims to standardize and drive cross-border ecommerce trade, both in and out of the country.

thE ShanghaI free trade zone (ftZ) OffICIAlly CAME IntO ExIstEnCE In thE lAttEr hAlf Of 2013. thIs gOVErnMEnt PlAn AIMs tO furthEr OPEn ChInA uP tO thE OutsIDE wOrlD frOM A trADE PErsPECtIVE.

thIs InItIAtIVE hAs AlrEADy BEEn InCrEDIBly suCCEssful. Only fully OPErAtIOnAl sInCE MAy Of thIs yEAr, q.CIty, A quAlIty-lIfEstylE CIty funDED By ZhEjIAng qIAnshEng hOlDIng grOuP As PArt Of thE PIlOt CItIEs InItIAtIVE, AlrEADy hAnDlEs OVEr 10,000 PACKAgEs A DAy.

4.4.3

PAYVISION 50


ChinA sits At the heAd of the eCommerCe tAble, with usd 296 billion vAlue in 2013. yet only 14% of Chinese Consumers Are buyinG online. if we were to see even A smAll perCentAGe inCreAse, the impACt on vAlue would be huGe. reCent initiAtives Are lowerinG the bArriers for eCommerCe import And export in ChinA, to fACilitAte fAvorAble foreiGn trAde Conditions.

PAYVISION 51


rolf vISSer, Chairman of the Cross-Border Ecommerce Community (CBEC), comments on the pilot cities initiative.

“we have recently focuSed our attentIon on

aSIa, In reSponSe to the IncreaSIng market

opportunities, so i hAve spent A siGnifiCAnt

Amount of time in ChinA over the pAst

yeAr. i sAw first-hAnd An eCommerCe

lAndsCApe Completely ACCessible to

foreiGn plAyers. on A reCent trip to

ChinA, visitinG the pilot Cities, i met qiAn

ChAnGshenG, the ChAirmAn of q.City. it

opened my eyes to the opportunities for

merChAnts lookinG to import into ChinA.

“wIth a focuS on exceptIonal chIneSe

cuStomer experIence, not only are foreIgn

merChAnts supported with Chinese

trAnslAtion And eCommerCe plAtforms, q.City

Also tAkes CAre of Customs CleArAnCe, tAx,

stoCk mAnAGement And produCt promotion.

on top of this, produCts Are displAyed, free-

of-ChArGe, in An immACulAte showroom for

Consumers to touCh And feel And delivered

next dAy to Consumers. merChAnts CAn

reCeive Comprehensive reports to mAnAGe

their supply And demAnd, And to understAnd

their Chinese Consumers’ trends.

“wIth thIS level of Support, enterIng chIna

could not be eaSIer, and q.cIty IS juSt one

exAmple of the mAny pilot Cities i visit-

ed. hAvinG personAlly seen the operAtion,

i Am An eyewitness to the fACt thAt the

europeAn And AmeriCAn merChAnt Con-

Cerns of yesterdAy Are no lonGer relevAnt

todAy.” rolf vISSer, chaIrman of the cbec

Banks within the zone can now conduct renminbi cross-border settlements for trans-actions, and the sale of banned items such as video consoles will be permitted in the zone. the ftZ will permit yuan convertibility and unrestricted foreign currency exchange, and a tax-free period of 10 years for the businesses

in the area as a means to simplify the process of foreign investment.76

the ftZ will also assist and drive cross-border sales to and from China. Indeed, as one of the first measures, the general Administration of Customs (gAC) launched a cross-border ecom-merce platform, buyeasi.com.

On top of recent government initiatives to drive cross-border trade, China’s ecommerce market is significantly boosted by singles Day on november 11th, or 11.11. singles Day was originally intended to facilitate single people connecting and celebrating with other singles. Over the years, and particularly on 11th november 2011, the celebration was taken to another level, seeing widespread internet promotions and online sales for single people. singles day became the Chinese equivalent of Cyber Monday.

“ In 2013, SIngleS day waS an onlIne ShoppIng

phenomenon, reachIng a SaleS volume of

ApproximAtely usd 5.8 billion in one dAy.

on A reCent trip to ChinA, i listened to An

AlibAbA Group exeCutive introduCe the

history of the AnnuAl event And the ev-

er-GrowinG demAnd for produCts Around

the world by Chinese Consumers. i reAlized

the potentiAl business this CelebrAtion

presents for overseAs merChAnts is inCred-

ible,” rolf vISSer, chaIrman of the cbec

76

ChinaDaily.com

4.4.3

http://www.chinadaily.com

PAYVISION 52


97

SINGLES DAY VERSUS CYBER MONDAY (IN USD BILLIONS)

0 1 2 3 4 5

CYBER MONDAY (THE US)SINGLES DAY (CHINA)

2013

2012

2011

2010

2009

[REFERENCE 78 - TO THE

BLOOMBERG BUSINESS WEEK]

japan, a wealthy nation with an aging popula-tion, sees just under 20% of online consumers shopping overseas. Average levels of savings in japan, excluding fixed assets, stand at usD 156 thousand. for older consumers, the average is even higher, some usD 244 thousand. 60% of these savings are liquid, available in the bank.

japanese online consumers purchased usD 146 million in online products from the us, and usD 9.8 million from China. In fact, seeing the potential business between China and japan, this year japan Post and China Post entered into an agreement to handle cross-border purchases from each market, to further facil-itate cross-border shopping to and from both markets.77

while these figures are encouraging, it is worth noting that japanese consumers are sensitive to reading content in their own language. 99% of japanese consumers only understand websites in japanese. localization, therefore, is incredibly important when considering expan-sion into this market.

South korea is another Asian market seeing a growing trend towards cross-border ecom-merce. Indeed, overseas credit card spending grew 15.4% in 2013, considerably greater than the increase in domestic credit card spending of 3.2%.78 Imports through ecommerce websites rose 47% in 2013, to a value of approximately usD 1 billion.79 the us accounted for 75% of cross-border B2C ecommerce purchases made by online shoppers in south Korea in 2013.80 Other destinations for cross-border spending are japan, Indonesia, China and germany

77

Evigo, 2014

78

Bank of Korea, 2014

79

Korea Customs service,

2014

80


Kg – global Cross-

Border B2C Ecommerce

report, 2014

4.4.3

PAYVISION 53


89

99

OVERSEAS CREDIT SPENDING GROWTH V DOMESTIC IN SOUTH KOREA, % 2013

0 5 10 15 20 25

DOMESTIC

CROSS-BORDER

south Korean overseas spending is fuelled by vastly higher prices in the domestic market. retailers in south Korea have agreements with manufacturers that allow them to charge a premium for both domestic and foreign prod-ucts. Prices can be inflated by as much as 90% in the domestic market.

But a boom in mobile connectivity has facili-tated a greater transparency in overseas retail for tech-savvy Korean consumers. retailers are no longer protected by consumer ignorance about their premium-priced goods.

As A DIrECt rEtAlIAtIOn tO thEIr ExPEnsIVE DOMEstIC MArKEt, A grOwIng COllECtIOn OVErsEAs shOPPErs, Or jIcgoojok – lItErAlly A trIBE Of DIrECt BuyErs – ArE CIrCuMVEntIng thEIr

lOCAl rEtAIlErs AnD BuyIng PrODuCts frOM OthEr COuntrIEs. thEn thEy’rE BlOggIng ABOut thEIr ExPErIEnCEs, sPrEADIng thE wOrD tO OthEr COnsuMErs.

Even with import tax, shipping fees and waiting times, the experience of online purchasing cross-border is more favorable for south Korean consumers.

IndoneSIan cross-border activity is also one that has witnessed growth, again fuelled by greater mobile connectivity. Interestingly Indonesians, unlike the japanese, are not so put off by lack of localization. the most visited ecommerce site in Indonesia is Amazon.com, despite no local language settings or currency. eBay is 4th place. 81

88

98

TOP 5 VISITED ECOMMERCE SITES IN INDONESIA BY RANK

0 1 2 3 4 5

LIONAIR.CO.ID

EBAY.COM

BHINNEKA.CO.ID

LAZADA.CO.ID

AMAZON.COM

the cross-border market has been fuelled by Chinese and Korean ecommerce players targeting Indonesia. however, like the rest of

Asia, the majority of imports come from the us and the uK.83

81

VelaAsia.com

83


Border Ecommerce

report Indonesia, 2014

4.4.3

http://www.velaasia.com

PAYVISION 54


IndIa, despite its ecommerce market imma-turity, is seeing interesting trends towards cross-border ecommerce, particularly export. At present, cross-border ecommerce outweighs domestic ecommerce and 95% of cross-border ecommerce trade in India is export.84

Indian online merchants have tapped into the potential of export using PayPal as a payment facilitator. growth has been seen in export to the usA (20%), uK (12%) and Australia (31%), as well as Canada and germany. Almost all (98%) commercial merchants in India are using eBay as their main driver for export, and reaching on average 31 different markets.85

Indian consumers are purchasing cross-border too. the use of English is on the rise in India, in particular with younger generations who are more connected to the Internet and mobile devices, a major driver for growth in this region.

unsurprisingly, in line with global trends, Indian online consumers mostly purchase from us and China.86

however, cross-border purchasing in India is limited by low disposable income levels, a pref-erence for cash on delivery payments (only 25% of households possess credit or debit cards), and extremely complex tax measures owing to lack of a uniform gst.87

thE AsIAn rEgIOn CErtAInly OPEns DOOrs AnD PrEsEnts POtEntIAl OPPOrtunItIEs. But thErE ArE A nuMBEr Of ChAllEngEs DIsCOurAgIng BusInEssEs frOM ExPAnDIng IntO thEsE MArKEts. lAnguAgE AnD CulturE VArIEs InCrEDIBly frOM OnE COuntry tO thE nExt, As DO CustOMs AnD trADItIOns thAt CAn BE quItE AlIEn, AnD thErE-fOrE DAuntIng, tO wEstErn BusI-nEssEs.

logistics are a specific challenge in Asia, as immature infrastructure and unreliable postal

systems can be complex for businesses to navigate. Postal services can be slow, and geographical coverage of express delivery or courier companies is often limited to major cities. Couriers are also comparatively expen-sive, decreasing the attractiveness (or the value) of ecommerce transactions.

chIna has some 35,000 express delivery companies, historically making delivery costs extremely varied. now the state Council in China has agreed to liberalize the domestic parcel market, allowing foreign competitor entry and industry mergers.

Dhl is now expanding its coverage in Asia by developing their China-Europe multimodal rail service, to significantly reduce delivery times and complexities.

Preferred payment methods in some regions can be a discouraging factor, particularly in the emerging markets like India where a preference for cash-based payments take precedence.

hOwEVEr, wIth tIME AnD BuDgEt InVEstED In rEsEArCh On COnsuMEr CulturE, AnD PArtnErIng wIth An IntErnAtIOnAl nEtwOrK wIth KnOwlEDgE AnD ExPErtIsE, thEsE ChAllEngEs CAn BE OVErCOME. In PArtICulAr whEn COnsIDErIng rECEnt InItIAtIVEs suCh As thE ftZ, ChInA hOlDs OnE Of thE grEAtEst CrOss-BOrDEr OPPOrtunItIEs In thE wOrlD thIs yEAr.

84

eBay Inc. - the promise

of the global

Empowerment network,

2013

85

eBay Inc. - the promise

of the global

Empowerment network,

2013

86

shopyourworld.com and

iresearch - China Cross

Border e-commerce

report, 2013

87

Borderfree Index

4.4.3

PAYVISION 55


the mAjor plAyers

In AsIA thErE ArE A nuMBEr Of MAjOr ECOMMErCE PlAyErs thAt ArE fACIlItAtIng CrOss-BOrDEr ECOMMErCE grOwth.

EBAy AnnOunCED thAt rEVEnuE frOM IntErnAtIOnAl MArKEts COnstItutED ABOut 53% Of OVErAll rEVEnuEs, uP frOM 52% A yEAr AgO. ExPOrts frOM ChInA VIA EBAy ArE AlsO grOwIng sIgnIfICAntly By COnnECtIng ChInEsE MErChAnts tO MIllIOns Of wOrlDwIDE COnsuMErs.88

China’s Alibaba group, founded in 1999, domi-nates the Chinese domestic market, with a collection of ecommerce businesses, including B2B, B2C and C2C platforms, as well as online payment services through Alipay. two of Alibaba’s online portals handled usD 170 billion in 2012, more than Amazon and eBay combined.89

On september 19th of this year, Alibaba group holding ltd made its Initial Public Offering (IPO), securing its place as the world’s largest-ever stock flotation. shortly after opening for trade, Alibaba shares reached usD 99 per share, up more than 45% from its IPO price. Although share prices have slipped back after the initial offering, the market still believes the company is more valuable today than facebook or Amazon.

AliExpress, Alibaba’s global ecommerce site focused on export, is a strong driving force for cross-border ecommerce, enabling consumers worldwide to buy direct from Chinese exporters. One of the largest markets is russia, but it is also popular with Brazilian and American online shoppers. the platform allows consumers around the world to buy directly from Chinese wholesalers and manufacturers.

tmall.com, also part of the Alibaba group, with a focus on import, is a third party platform featuring both domestic and international brands for Chinese consumers. tmall is the largest retail platform in China, in gross merchandise terms, according to iresearch.

Alibaba is tackling the hot topic of logistics, one of the biggest barriers to cross-border ecommerce in and out of Asia. this year it announced an investment in singPost, a provider of mail and retail logistics not only in singapore, but across the whole APAC region, a project to further enable Asian cross-border logistics.90

jD.com or jingdong Mall is a Chinese ecom-merce site comparable to Amazon in the us and Europe, with a focus on consumer electronics, making up 85% of their revenue. unlike Amazon, jD.com focuses mostly on first party business. jD.com, while concentrating their business mainly on the Chinese market, has a number of overseas customers looking to purchase cross-border, so international expan-sion is on their list of priorities.

light in the Box is a popular online discount retailer, selling products from China to consumers around the world. while facilitating the high demand for low-cost Chinese products, consumers have experienced tricky returns policies and varying degrees of quality in some cases.

Another major player in Asia is rakuten Ichiba japan, a japanese based ecommerce giant, with additional presence in Indonesia; rakuten Belanja. rakuten reports that order volume and

88

Marketrealist.com

89

Ecommerce in China:

the Alibaba

phenomenon - the

Economist, 2013

90

Internetretailer.com,

2014

4.4.4

PAYVISION 56


revenue from rakuten’s online marketplace in Indonesia are more than doubling every year, led by demand for gadgets, fashion accessories and toys.91

the market place platform rakuten global Market allows a central location for the export of japanese products around the world. this year rakuten and Alipay, the electronic payment service affiliated with China’s Alibaba group, announced a tie-up allowing a smoother

checkout experience for rakuten’s Chinese customers.

tOwArDs thE EnD Of 2013 A nEw sChEME wAs lAunChED tO AllOw OVErsEAs rEtAIlErs tO sEll On thE rAKutEn MArKEtPlACE PlAtfOrM, wIth nO PhysICAl PrEsEnCE In jAPAn. whIlE OVErsEAs PrEsEnCE Is stIll sMAll, rAKutEn Is PursuIng A wIDEr glOBAl PlAtfOrM.

91

financial times, 2014

4.4.4

summAry

AsIA Is thE EMErgIng gIAnt Of ECOMMErCE, hAVIng wItnEssED ExPlOsIVE grOwth ACrOss KEy MArKEts. It Is AntICIPAtED thAt 2014 Is thE yEAr thAt AsIA tAKEs CEntEr stAgE.

AsIA As A rEgIOn Is hugE In POPulAtIOn VAluE; OVEr 55% Of thE wOrlD’s POPulAtIOn lIVE In thIs ArEA, wIth 3.1 BIllIOn IntErnEt usErs. ChInA sIts At thE hEAD Of thE tABlE, wIth usD 296 BIllIOn ECOMMErCE VAluE In 2013. yEt, Only 14% Of ChInEsE COnsuMErs ArE CurrEntly BuyIng OnlInE. If wE wErE tO sEE EVEn A sMAll PErCEntAgE InCrEAsE, thE IMPACt On VAluE wOulD BE hugE.

with greater mobile connectivity and market transparency, the Asian market is also becoming more comfortable with cross-border shopping. thanks to increased use of credit cards, and driven by mistrust in domestic products, the process of haitao, or ocean search, is not uncommon in China. savvy consumers are looking for trustworthy items such as baby formulas and beauty products in overseas markets. In south Korea, domestic retail prices are so inflated, a growing number of jicgoojok, or army of direct buyers, are buying directly from overseas merchants to save money.

On top of this, recent government initiatives are looking to lower the barriers for ecommerce import and export. In particular in China, the launch of the pilot cities is to facilitate favorable foreign trade conditions. the shanghai free trade Zone allows the sale of banned products, as well as unrestricted currency exchange. the ftZ is a means to drive cross-border sales to and from China.

yet In spite of Asia’s huge growth and massive potential for cross-border business, merchants from the west are cautious when it comes to cross-border expansion into Asia. language and cultural differences are an important concern, as well as logistics and legislative barriers. this is confirmed by our survey results, only 11% of north American respondents, and just over 14% of European respondents believe that expansion into China would be profitable, while initiatives such as q.Ctiy in hangzhou prove quite the opposite.

these apprehensions indicate that the market is less competitive at present, there is a poten-

4.4.5

PAYVISION 57


tial gap in the market for a forward-thinking, international business. yet this gap is set to narrow, as confirmed by our survey; merchants grow less cautious of expanding into different languages and cultures. now is the time to tackle this market, before many others do too.

whIlE OBstAClEs DO stIll ExIst, wIth thE tIME AnD rEsOurCEs InVEstED In rEsEArCh, lOCAlIZAtIOn AnD fOrMIng lOCAl PArtnEr-shIPs, In PArtICulAr tO A glOBAl ACquIrIng nEtwOrK, AsIA COulD BE thE MArKEt tO BrIng ABOut hugE PrOfIt.

reGionAl breAkdown - Cross-border eCommerCe in lAtin AmeriCA

4.5

our survey sAys…

lAtIn AMErICA, As A DEstInAtIOn fOr CrOss-BOrDEr ECOMMErCE, Is CErtAInly On thE rADAr Of Our surVEy PArtICI-

PAnts. In EurOPE, lAtIn AMErICA hAs 38% PrEfErEnCE, thIrD PlACE AftEr nOrth AMErICA AnD OCEAnIA.

33

43

0 10 20 30 40 50 60

NO STRATEGY

SUB-SAHARAN AFRICA

NORTH AMERICA


LATIN AMERICA

OCEANIA

ASIA


In north America, the percentage is higher, with 41% focused south of the border, second only to Europe as the main region of focus. Of our us survey participants specifically, 37%

demonstrate a preference of latin America as a region of expansion over Canada, despite higher language barriers and logistical challenges.

4.5.1

4.4.5

PAYVISION 58


the mAin fACtor drivinG lAtin AmeriCAns to Go online is soCiAl mediA, in pArtiCulAr fACebook, so soCiAl mediA should plAy A role in Any overseAs merChAnt’s strAteGy.

PAYVISION 59


41


0 10 20 30 40 50 60 70 80

NO STRATEGY

SUB-SAHARAN AFRICA


LATIN AMERICA

EUROPE

OCEANIA

ASIA

the potential of lAtAM as a consumer power has not gone unnoticed, and it would seem the potential value of entering the market goes some way to outweigh the challenges for merchants, interestingly more so than the global powerhouse of Asia.

yet the ecommerce landscape is still unpre-dictable, and in many ways underdeveloped in latin America, providing barriers to entry to some merchants. we spoke to Mike schramm

from Autodesk, a California based software manufacturer. he has faced challenges picking up cross-border ecommerce in Brazil.

“we do a pretty brISk buSIneSS In brazIl In

our reSeller channel, but we haven’t real-

ly CrACked the Code online, whiCh hAs

been A little bit ConfoundinG to us be-

CAuse there is A lot of eCommerCe GoinG

on there.” mIke Schramm, autodeSk

4.5.1

reGionAl breAkdown - overview of eCommerCe in lAtin AmeriCA

thE lAtAM rEgIOn Is stIll VEry MuCh An EMErgIng ECOMMErCE MArKEt. MAKIng uP 9% Of thE wOrlD POPulAtIOn, In 2013, OnlInE sAlEs frOM thE whOlE rEgIOn tOtAlED usD 48.14 BIllIOn. whIlE thIs wAs thE sECOnD lOwEst wOrlDwIDE By rEgIOn, It Is EstIMAtED thAt ECOMMErCE wIll rIsE AlMOst 20% tO usD 58 BIllIOn.92

Mobile is yet another emerging trend across the lAtAM countries, and overall smartphone

penetration is expected to reach almost 30% by

92

eMarketer, 2014

4.5.2

PAYVISION 60


the end of 2014, and grow further to 44% by 2017.93

thE lEADEr Of thE lAtAM rEgIOn By A wIDE MArgIn Is brazIl. IntErnEt COnnECtIVIty Is stIll rElAtIVEly lOw; Only 51.6% PEnEtrAtIOn. ECOMMErCE In 2013 wAs VAluED At usD 12.8 BIllIOn, AnD thErE ArE sIgns Of sIgnIfICAnt grOwth. 51.3 MIllIOn Of 199 MIllIOn COnsuMErs MADE At lEAst OnE DIgItAl PurChAsE lAst yEAr, A 21.6% yEAr-OVEr-yEAr InCrEAsE AnD AlMOst thrEE tIMEs thE AMOunt rECOrDED In 2009.94

unlike Internet penetration, mobile penetration is high at 136%, 26.8% of which are smart-phones95, the highest smartphone penetration rate in lAtAM.96 we can see yet again the common global theme that mobile connec-tivity is driving ecommerce growth in emerging markets.

Mobile commerce accounts for under 5% of all ecommerce in the country at present, but with over 40% of Brazilian mobile users accessing the Internet via a mobile, these numbers have much greater potential.97 Currently 15% of online consumers shop via their mobile.98

Brazilian online consumers prefer credit cards to purchase online accounting for a 79% share. Boleto Bancario, a type of pro-forma invoice issued by the bank, is second with 24%.99

90

100

ONLINE PAYMENT PREFERENCE IN BRAZIL %

OTHERONLINE DEBIT

BOLETO BANCARIO

CREDIT CARD

79.0%24.0%

4.0% 3.0%

mexIco Is nOw thE sECOnD lArgEst ECOMMErCE MArKEt In lAtIn AMErICA AftEr BrAZIl, ACCOuntIng fOr 14.3% Of tOtAl sOuth AMErICAn OnlInE sAlEs.100 IntErnEt PEnEtrAtIOn Is lOwEr thAn thE lAtAM lEADEr At 43.6% AnD ECOMMErCE sAlEs In 2013 wErE usD 5.1 BIllIOn101.

Ecommerce penetration is considerably behind Brazil, with only 8.4 million Mexican consumers shopping online.102 But the compound annual growth of Internet retail in Mexico was a weighty 58.8% from 2008 to 2013103, compared to 17.6% in Brazil over the same period.104

Mexican shoppers, while seeing a slightly lower smartphone penetration rate of 23%105, are the most engaged in mobile commerce of all latin American countries, with 17% of Internet users shopping on mobile in 2013.106

Cash is still the marginally preferred online payment option in Mexico, with 32% share. Credit card is a close second at 28%.107

91ONLINE PAYMENT PREFERENCE IN MEXICO %

OTHER

BANK TRANSFER

DEBIT CARD

CREDIT CARD

CASH

32.0%

28.0%15%

15.0%

10.0%

93

EtC Digital, 2014

94

ebit - relatório

webshoppers, 29th

Edition, 2014

95

eMarketer, 2014

96

European travel

Commission Digital

Portal, 2014

97

ebit - relatório

webshoppers, 29th

Edition, 2014

98

Ericsson Consumerlab:

M-commerce in latin

America, 2013

99


Border Ecommerce

report Brazil, 2014

100

la Asociación Mexicana

de Internet (AMIPCI),

2014

101

Euromonitor

International - Internet

retailing in Mexico,

2014

102

forrester research -

latin America Online

retail forecast, 2013 to

2018, 2014

103

Euromonitor


retailing in Mexico,

2014

104

Euromonitor


retailing in Brazil, 2014

105

eMarketer

106

ystats - latin America

B2C Ecommerce report,

2013

107


Border Ecommerce

report Mexico, 2014

4.5.2

PAYVISION 61


argentIna Is thE thIrD strOngEst COuntry In lAtAM rEgIOn. AlthOugh IntErnEt COnnECtIVIty Is slIghtly hIghEr thAn thE lEADIng COuntrIEs At 59.9%, ECOMMErCE sAlEs AMOuntED tO Only usD 1.8 BIllIOn. thIs fIgurE, hOwEVEr, DEMOnstrAtEs A grOwth Of 48.5%, In 2013108.

use of mobile shopping is lags behind the lAtAM leaders, however; 11% of Argentinians shop on their mobile devices.

Credit card (online, rather than on collection) is the preferred online payment method in Argen-tina, with 56.2% of online shoppers choosing this payment method.109

92ONLINE PAYMENT PREFERENCE IN ARGENTINA %(OVER 100% AS MULTIPLE ANSWERS)

PAGOMISCUENTAS.COM OR LINKPAGOS.COM

BANK TRANSFER

CREDIT OR DEBIT CARD ON COLLECTION

ALTERNATIVE PAYMENTS (MERCADO PAGO, PAYPAL, DINEROMAIL)

CASH VIA PAGO FACIL OR RAPI PAGO

CASH ON DELIVERY

CREDIT OR DEBIT CARD ONLINE

56.2%

34.4%22.9%

16.7%

4.2%11.5%

5.2%

More specific ecommerce data on latin Amer-ican countries can be found in our infographics library

108

Electronic Chamber

Association (CACE),

2014

109

ystats - global Online

Payment Methods,

2014

4.5.2

Cross border eCommerCe in lAtin AmeriCA: drivers And ChAllenGes

thE lAtIn AMErICAn rEgIOn, whIlE COMPrIsIng A nuMBEr Of DIffErEnt COuntrIEs wIth DIffErEnt CulturEs AnD PrEfErEnCEs, Is nEArly unIfIED By OnE lAnguAgE; sPAnIsh. yEt thE lAtAM lEADEr, BrAZIl, gOEs AgAInst thE grAIn whErE 99% Of thE 199.3 MIllIOn POPulAtIOn sPEAK POrtuguEsE.

In this fast growing market, cross-border online shopping plays a significant role. In countries where domestic ecommerce is underdeveloped such as Colombia, Paraguay and Venezuela, the majority of online purchases are cross-border, driven by a desire for western products, and better availability in other markets such as the us. the region is certainly open to cross-border opportunities.

It has been noted that the main factor driving latin Americans to go online is social media, in particular facebook, so social media should play a role in an overseas merchant’s strategy.

facebook is the number one site when it comes to time spent online, with around 179 million users, growing from 116 million users in june 2011.110 19% of facebook’s user base lives in latin America.

In Brazil, the number of cross-border online shoppers is forecasted to reach almost ten million by 2018, this equates to 53% estimated annual growth over the next five years, expen-diture surging by +546%.111

M-commerce is once again a factor driving this growth; the value of Brazil’s mobile cross-

110

social Media today,

2014

111

ystats – Brazil B2C

Ecommerce report,

2014

4.5.3

PAYVISION 62


border transactions is expected to increase to nearly usD 2.5 billion in 2018.112

Currently in Brazil, the most popular products for cross-border ecommerce purchases are

computer hardware and personal electronics,113 with Brazilian consumers mostly purchasing from us and China, 79% and 48% respec-tively.114

93

BRAZILIAN ONLINE CONSUMERS PURCHASING OVERSEAS %

0 10 20 30 40 50 60 70 80

CANADA

HONG KONG

CHINA

UK

US

In Mexico, the statistics are impressive when it comes to cross-border opportunities; 50% of Mexican consumers shop on overseas websites115, 70% of this trade coming from the us.

Argentina, however, tells a different tale in terms of cross-border ecommerce. the number of online shoppers in Argentina purchasing from foreign websites doubled in 2013, however, the country’s authorities placed regulatory restrictions on cross-border trade in january 2014.

rather than embracing the potential business, in order protect the local economy, Argentina’s government has introduced new restrictions limiting citizens to two purchases of goods from foreign ecommerce websites each year. the Administration of Public revenue (AfIP) has also set a value limit that means consumers will be able to buy usD 25 worth of goods from websites abroad each year.116

rudolf booker, CEO at Payvision comments on this latin American trend.

“the attItude towardS croSS-border ecom-

merce In latIn amerIca, In partIcular argen-

tinA, is A stArk ContrAst to thAt of AsiA.

ArGentineAn merChAnts Are lookinG to

proteCt their eConomy by disCourAGinG

Cross-border eCommerCe, And to keep their

CApitAl in the domestiC mArket. Chinese

Authorities, however, see internAtion-

Al eCommerCe As A meAns to boost their

eConomy And drive Growth, henCe reCent

initiAtives to open up the Chinese mAr-

ket And fACilitAte Cross-border spend-

inG.” rudolf booker, ceo at payvISIon.

the latin American market still presents a great opportunity. the biggest emphasis, however, is securing local partnerships to provide the vehicle to entry.

112


spice routes, 2013

113

ystats - latin America

B2C E-Commerce

report, 2013

114

ystats - global Cross-

Border B2C

E-Commerce, 2014

115

worldPay - global

Online shopper report,

2013

116

Post and Parcel, 2014

4.5.3

PAYVISION 63


we spoke to nIcole wIckSwat from EBAnx, an acquirer based in Brazil. she explains the huge opportunity, but also the acute need for local partnerships to succeed, in this market.

“the majorIty of merchantS know they need

a partner In brazIl. merchantS who are

lookinG into settinG up their own loCAl

entity Are leArninG thAt it is not the most

Cost effeCtive option. i try to emphAsize

how biG the opportunity in brAzil is Above

All else. Consumers prefer to buy online

beCAuse brAzil hAs the most expensive

iphone, the most expensive plAystAtion And

often produCts Aren’t AvAilAble loCAlly. the

opportunity is stronG And is only GrowinG.

“ I don’t thInk merchantS underStand the

fInancIal burden they would take on by

estAblishinG An entity here themselves.

they don’t understAnd how tAx effiCient

it is to hAve A brAziliAn pArtner. they

Also don’t understAnd how stronG

the demAnd is for their produCts.

“ It really IS that SImple. deSpIte all the

uncertaInty, there IS no reaSon not to be

here.” nIcole wIckSwat, ebanx

Despite this, there are still a number of restric-tions in the lAtAM region today, important factors when considering expansion into this area.

first, Internet penetration and connectivity are still very low across the region; under 40%. In addition to this, payment preferences across the region are mixed; credit cards are popular in the stronger markets, but vast number of the population still have no credit card and prefer cash-based payments.

On top of this, logistics and infrastructure are both still underdeveloped in many areas, posing problems for fast and reliable delivery. taxation structure is varied across the region, giving yet more complications for businesses to overcome before entry.

Most of all, ecommerce fraud rates are also high in latin America, resulting in low consumer confidence. Brazil ranks 1st in latin America for incidents of card penetration and criminal abuse of compromised accounts. Over the last 5 years, more than 33% of Brazilian credit card holders have reported fraudulent activity.117

hOwEVEr, rECEnt fIgurEs InDICAtE thAt COnfIDEnCE Is IMPrOVIng. ACCOrDIng tO A surVEy By CâMArA BrAsIlEIrA DE COMérCIO ElEtrônICO; 70% Of BrAZIlIAns stAtED thEy ArE MOrE wIllIng tO shArE PAyMEnt AnD BAnK InfOrMAtIOn wIth OnlInE rEtAIlErs, thAnKs tO nEw sECurIty MEthODs AnD IDEntIty VErIfICAtIOn tEChnIquEs.

117

Aite group, 2013

4.5.3

PAYVISION 64


the mAjor plAyers

CrOss-BOrDEr ECOMMErCE In lAtIn AMErICA Is DrIVEn thrOugh A fEw MAjOr PlAyErs In thE InDustry.

traetelo.com, or ‘Bring it!’ in English, was the first cross-border marketplace that focused on the latin American region.

Aiming to facilitate sales from the us to the lAtAM market, but with an unreliable logistics landscape to navigate, traetelo.com has part-nered with Dhl Express. the purpose of the partnership is to increase the flow and reliability of ecommerce imports into latin America. the most popular markets are reported to be Brazil,

Chile, Venezuela and Peru, where sales have grown 200% annually.118

AlsO MErCADO lIBrE, thE ECOMMErCE MArKEtPlACE Of lAtIn AMErICA AnD lEADIng ECOMMErCE PlAtfOrM In thE rEgIOn, sAw usD 3 tO 5 BIllIOn sAlEs frOM CrOss-BOrDEr sAlEs. thIs rEPrEsEnts 10% Of thEIr BusInEss, BrAZIl AnD MExICO BEIng thE PrOMInEnt PArtnErs.119

118

Evigo

119

Mercadolibre

4.5.4

summAry

thE lAtIn AMErICAn MArKEt, DEsPItE lAnguAgE AnD CulturAl COMPlExItIEs AnD unDErDEVElOPED InfrAstruCturE, Is rElAtIVEly hIgh On thE AgEnDA fOr OVErsEAs ExPAnsIOn.

the region ranks third by European merchants, after north America and the Pacific, and second place after Europe for north American merchants. yet this region does not come without some complexities and uncertainty.

with a good sized population of 588 million accounting for 9% of the world population, the number of potential cross-border consumers in not insignificant. Connectivity is a major driver; smartphone penetration is expected to reach almost a third of all consumers by end of 2014 and social media drives consumers online.

with lower domestic availability, and often underdeveloped ecommerce platforms, more latin American consumers are shopping online

from other counties, in particular the us, but also China, where product selection is greater.the high use of credit cards in strong lAtAM markets is a cross-border ecommerce cata-lyst. some major ecommerce players such as traetelo.com and Mercado libre are the current vehicles driving the cross-border trend.

yEt thE fIgurEs shOw thAt thE MArKEt Is nOt yEt sAturAtED. POtEntIAl BusInEss COulD BE sIgnIfICAnt fOr OVErsEAs MErChAnts wIllIng tO InVEst In MOBIlE OPtIMIZAtIOn, A lOCAlIZED sOCIAl strAtEgy, AnD ABOVE All A lOCAl PArtnErshIP.

4.5.5

PAYVISION 65


reGionAl breAkdown - Cross-border eCommerCe in the pACifiC

4.6

our survey sAys…

thE PACIfIC rEgIOn, AlsO KnOwn As OCEAnIA, COMPrIsIng AustrAlIA AnD nEw ZEAlAnD As thE POwEr huBs, AnD A nuMBEr Of sMAllEr PACIfIC IslAnDs InCluDIng fIjI, sAMOA, tOngA AnD thE COOK IslAnDs, Is CErtAInly On thE rADAr Of Our surVEy PArtICIPAnts In tErMs Of CrOss-BOrDEr ECOMMErCE ExPAnsIOn.

In Europe particularly, this region is considered to be of highest importance, equal with north America, both at 52% preference.

33

43

0 10 20 30 40 50 60

NO STRATEGY

SUB-SAHARAN AFRICA

NORTH AMERICA


LATIN AMERICA

OCEANIA

ASIA


In north America the focus on Oceania is marginally less than the top choice of Europe, but considered to be of equal importance as latin America, both with 41% preference.

4.6.1

PAYVISION 66


41


0 10 20 30 40 50 60 70 80

NO STRATEGY

SUB-SAHARAN AFRICA


LATIN AMERICA

EUROPE

OCEANIA

ASIA

It is clear this region is not unpopular with our survey recipients for cross-border ecommerce trade. languages and cultural traditions are not dissimilar to Europe and the us, giving the region an edge in these places over Asia and latin America. Both Australia and new Zealand are developed, connected countries with purchasing power, and this has not gone unnoticed by savvy overseas businesses.

But still the Pacific is certainly not a first choice for many. A number of barriers discourage online merchants from overseas expansion into this region, such as distance, a significantly lower consumer base to target, and a lower Internet speed than other developed countries.

yEt AustrAlIAns AnD KIwIs ArE COMfOrt-ABlE OVErsEAs sPEnDErs, DrIVEn By lACK Of OffErIng In thE DOMEstIC MArKEt, COMfOrt usIng CrEDIt CArDs, InCrEAsED DEVICE COnnECtIVIty AnD MOBIlE COMMErCE. wIth lEss CrOss-BOrDEr COMPEtItIOn thAn thE POwErful AnD POPulAr EurOPEAn Or nOrth AMErICAn MArKEts, fOr MErChAnts wIth MOBIlE-OPtIMIZED PlAtfOrMs AnD gOOD lOgIstICs PArtnErs, thE OPPOrtunItIEs In thIs rEgIOn ArE COnsIDErABlE.

4.6.1

PAYVISION 67


overview of eCommerCe in the pACifiC

thE PACIfIC rEgIOn, whIlE lArgE In lAnDMAss, COMPrIsEs Only A sMAll nuMBEr Of thE tOtAl wOrlD POPulAtIOn; 0.5%. IntErnEt PEnEtrAtIOn Is AlsO A MEAgEr 68%, DrIVEn MOstly By AustrAlIA At 89% AnD nEw ZEAlAnD At 88%. IslAnDs suCh As sAMOA, tOngA AnD fIjI ArE COnsIDErABly lOwEr; 9.2%, 24.9% AnD 27.8% rEsPECtIVEly. But thE gOOD nEws Is thAt ECOMMErCE Is A suCCEssful ECOnOMy In thE PACIfIC, nAMEly In AustrAlIA AnD nEw ZEAlAnD.

australia as an ecommerce market is booming; 89% of the population are online, and e-stores are opening at an incredible pace; up 200% since 2010. Ecommerce is not an uncommon activity; more than 50% of Australian consumers shop online.120 Interestingly, Australian shoppers are comfortable with higher end purchases, spending more per order than anywhere else in the world; usD 129.4 average in 2013.

Australians are well connected consumers. Mobile penetration is high at 130%121, with 65% of the population using smartphones, up from 37% in 2011.122 Mobile commerce is also driving online purchasing, 30% of Australians are shopping via their mobile devices, and m-commerce sales accounted for over usD 6 billion in 2013.123

In Australia, the preferred online payment is bank transfer with 43.7% share, but almost 30% prefer credit cards. Of the 7.81 million who bought, sold or shopped online in Australia, 52% paid with a credit card, certainly giving the region an additional driver in cross-border opportunities.124

94ONLINE PAYMENT PREFERENCE IN AUSTRALIA %

ALTERNATIVE PSPS

BPAY

CREDIT CARD

BANK TRANSFER

43.7%

28.8%

22.7%

4.8%

In new zealand ECOMMErCE Is EnjOyIng A sIMIlAr suCCEss; OVEr hAlf thE POPulAtIOn Buys OnlInE rEAChIng A tOtAl Of just OVEr usD 3 BIllIOn In 2013. thIs Is fOrECAst tO grOw tO usD 4.9 BIllIOn By 2017.125

the market, in line with global trends, is driven largely by mobile commerce. there are now 650,000 people shopping on their smartphones (up 127% year on year) and 414,000 on their tablet, a 73% increase. 60% of the population owns a smartphone, and 41% of this group made a purchase via their device. 58% of tablet owners made a purchase through their device.

Cross-border online shopping is a trend in new Zealand, with over one third of all sales gener-ated across from overseas websites. In fact, the

120

Paul Budde

Communications –

Australia Digital

Economy, Online

retailing, trends and

statistics, 2014

121

Paul Budde

Communications –

Australia Mobile

Communications –

statistics and forecasts,

2013

122

google - Our Mobile

Planet: Australia

understanding the

Mobile Consumer, 2013

123

Paul Budde

Communications –

Australia Digital

Economy, Online


statistics, 2014

124

ystats - global Online

Payment Methods

report, 2013

125


B2C E-Commerce

Market 2014

4.6.2

PAYVISION 68


growth rate of cross-border shopping outpaces local online sales, driven by strong use of credit cards online.

MOrE sPECIfIC ECOMMErCE DAtA On PACIfIC COuntrIEs CAn BE fOunD In Our InfOgrAPhICs lIBrAry

Cross border eCommerCe in the pACifiC: drivers And ChAllenGes

AustrAlIA, whIlE A tEChnOlOgICAlly-ADVAnCED COnsuMEr BAsE wIth A gOOD lEVEl Of OnlInE shOPPIng, Is unDErDEVElOPED frOM An OnlInE rEtAIl PErsPECtIVE. whIlE OVEr 50% Of AustrAlIAn rEtAIlErs hAVE A wEBsItE, Only 33% ACCEPtED OrDErs OnlInE In 2013, A sIgnIfICAnt MIss In A COuntry wIth hIgh IntErnEt AnD ECOMMErCE ADOPtIOn.

the good news, in light of this, is for overseas businesses looking to penetrate Australia. with a strong global brand awareness, Australians are more frequently looking cross-border to satisfy their online consumer needs; 79% of Australians who shop online currently purchase from overseas sites to some extent, and an estimated 45% of Australian online expenditure goes to overseas-based web-sites.126

Australian consumers spent approximately usD 5.6 billion on overseas purchases under usD

900 in the last financial year. And overseas spending is still growing thanks to the strength of the Australian dollar; online spending in the international market has grown 15.5% per year since 2005, while domestic online sales have grown by only 10%.127

the top cross-border categories were clothes, shoes and accessories, followed by books, with Australians mostly purchasing cross-border from the us, the uK and China.128

95

AUSTRALIAN CONSUMERS PURCHASING OVERSEAS %

0 10 20 30 40 50 60 70 80

CANADA

HONG KONG

CHINA

UK

US

126

frost & sullivan -

Australian & nZ Online

shopping Market report,

2013

127

Paul Budde

Communication -

Australia Digital

Economy, Online


statistics, 2014

128


spice routes, 2013

4.6.3

4.6.2

PAYVISION 69


new Zealand consumers are no strangers to shopping on cross-border sites either, with limited selection and availability in their domestic market. In 2013, 34% of ecommerce sales came from cross-border imports, double that of 2011.129 A sum to the tune of usD 1.3 billion.130

Despite the proximity to new Zealand, Australia is not the preferred destination for Kiwi online consumers from overseas. the majority of imports come from the us, the uK and the

rest of Europe, before Australia, thanks to the underdeveloped retail landscape in both regions.

fOr OVErsEAs BusInEssEs lOOKIng tO ExPAnD IntO thE PACIfIC, It Is nOtEwOrthy thAt thE DOMEstIC OnlInE rEtAIl lAnDsCAPE DOEs nOt MAtCh thE OnlInE COnsuMEr ExPECtAtIOn, Or nEEDs. 18.4% Of OnlInE shOPPErs frOM AustrAlIA AnD nEw ZEAlAnD COnfIrM thAt thEy Only CArE whEthEr An OnlInE rEtAIlEr Is AustrAlIAn If thEy wAnt IMMEDIAtE DElIVEry.

96

NEW ZEALAND CONSUMERS PURCHASING OVERSEAS %

0 5 10 15 20 25 30

OTHER

AUSTRALIA

REST OF EUROPE

UK

US

the results of the survey, corroborated by other ecommerce data, show the Pacific region is certainly not an unpopular choice for cross-border ecommerce trade from both Europe and north America. this is largely due to the similarities in western language and culture, and housing the strong, developed countries of Australia and new Zealand, both whose consumers have a fair amount of disposable income and connectivity.

yet the Pacific is not a first choice for many; therefore overseas competition would be lower than the powerful and popular European or north American markets. some limitations do hinder this region, which could go some way to explain why the Pacific is not a unanimous top choice for cross-border ecommerce around the globe.

Proximity to other countries makes this region a less desirable choice for entry; both Australia and new Zealand are relatively isolated from other global regions. Almost 7,500 miles lie between los Angeles and sydney, and 10,500 between london and sydney.

On top of this, the population is dispersed and the purchasing power is limited by the number of consumers in this region; approximately 36 million people. this is in stark contrast to Asia’s huge 4.3 billion or Europe’s 733 million.

finally, thanks to their relative isolation and wide population distribution, broadband speeds in Australia and new Zealand are significantly slower than many other developed countries; 40th and 46th place respectively.

129


B2C E-Commerce

Market, 2014

130

nielsen - Online retail

report, 2014

4.6.3

PAYVISION 70


yEt, thE PurChAsIng POwEr Of thIs rEgIOn Is wOrth nOtIng, AnD wIth thE MEDIOCrE lEVEls Of fOCus frOM OthEr CrOss-

BOrDEr BusInEssEs DuE tO thEsE ChAllEngEs, BArrIErs tO Entry COulD CErtAInly BE lOwEr.

the mAjor eCommerCe plAyers

In nEw ZEAlAnD, trADE ME Is thE lArgEst MArKEtPlACE fOr B2C AnD C2C PurChAsIng. tOwArDs thE EnD Of 2013, trADE ME trAnsItIOnED tO A CrOss-BOrDEr PlAtfOrM, By PArtnErIng wIth ChAnnEl ADVIsOr, EnCOurAgIng IntErnAtIOnAl BusInEssEs frOM OVErsEAs tO EntEr A MArKEt whErE DEMAnD Is hIgh But DOMEstIC sElECtIOn Is stIll lIMItED.

trade Me is well adopted by new Zealand consumers, and has 3 million members out of a population of 4.5 million people.

eBay and Amazon are the most popular ecom-merce sites in Australia, facilitating a growing desire for purchases from the us and the uK.

yet domestic retailers are certainly on the rise, and traditional retailers such as woolworths, Big w, Coles, jB hi-fi, target and harvey norman have made their way to the top 10 most popular shopping websites.131131

ystats - Australia &

new Zealand B2C

E-Commerce Market

2014

4.6.4

summAry

thE PACIfIC, whIlE rElAtIVEly IsOlAtED frOM thE rEst Of thE wOrlD, AnD hOlDIng A sMAll PErCEntAgE Of thE tOtAl wOrlD POPulAtIOn, Is A POPulAr ChOICE fOr CrOss-BOrDEr ExPAnsIOn.

European merchants consider it as important as north America for overseas ecommerce, and as important as latin America for north Amer-ican merchants, second only to Europe. the driving forces of the region are Australia and new Zealand. Drivers for overseas ecommerce in this region include similarity in language and culture to large global markets, good Internet

penetration in key markets, and high mobile connectivity. Indeed, mobile is the driving factor for ecommerce in this region, both domestically and overseas.

the significant business driver for overseas ecommerce, however, is the lack of retail ecom-merce adoption from a domestic perspective.

4.6.5

4.6.3

PAYVISION 71


Only 33% of web shops take orders online, resulting a mismatched level of consumer expectation in their domestic markets. Both Australian and new Zealand consumers prefer to buy from the us, where the ecommerce landscape is far more developed.

CrOss-BOrDEr sPEnDIng Is CErtAInly grOwIng, rEPrEsEntIng BusInEss OPPOrtunItIEs fOr MErChAnts wIllIng tO OVErCOME thE lOgIstICAl COMPlICAtIOns Of A VAst, unDErPOPulAtED AnD IsOlAtED rEgIOn.

exeCutive summAry5.

whAt now And whAt next?thE BuyIng AnD sEllIng Of gOODs VIA thE IntErnEt–ECOMMErCE, As wE KnOw It–hAs ExIstED fOr twO DECADEs nOw, AnD As An InDustry Is MOrE suCCEssful thAn EVEr, sIgnIfICAntly COntrIButIng tO thE tOtAl glOBAl ECOnOMy.

But with growth slowing in the major markets of north America and western Europe, merchants are looking for ways to continue the momentum of their online businesses.

the solution is to look beyond domestic borders – cross-border ecommerce.

while cross-border ecommerce is more common now than it once was, merchants are still anxious when it comes to driving profit through overseas expansion. Our updated 2014 survey results reveal some interesting insights on how merchants, PsPs and acquirers believe

cross-border ecommerce has changed, and how they make a cross-border ecommerce business profitable.

Our IntErPrEtAtIOn Of thEsE rEsults DrAw sOME fInal concluSIonS On thE MAIn DrIVErs, AnD hOw tO truly CAPItAlIZE On IntErnAtIOnAl grOwth.

5.1

4.6.5

PAYVISION 72


Credit CArds - the Cross-border eCommerCe Glue

whAt Is hAPPEnIng nOw?

In established markets, growth rates are slowing down and domestic saturation points are being reached. Merchants are now looking at cross-border ecommerce to drive further business growth.

whIlE thE rIsE Of AltErnAtIVE PAyMEnts wIns DOMEstIC sAlEs, ACrOss MultIPlE MArKEts AltErnAtIVE PAyMEnt PrEfEr-EnCEs VAry COnsIDErABly. thIs MAKEs CrOss-BOrDEr ECOMMErCE fAr MOrE COMPlEx fOr MErChAnts.

glOBAl CrOss-BOrDEr grOwth rEquIrEs A DIffErEnt PErsPECtIVE.

whAt tO DO nExt?

KEEP A glOBAl PErsPECtIVE.

Despite the multiple alternative payment methods in the ecommerce domain, the most commonly preferred online payment is still credit card. Indeed, the most successful cross-border ecommerce markets are those in which consumers are comfortable with this form of payment.

Credit card is the glue that binds the ecom-merce markets together.

thIs PErsPECtIVE DOEs nOt lIMIt OVErsEAs ExPAnsIOn tO thE MOst EstABlIshED MArKEts, whErE CrEDIt CArDs ArE thE hIstOrICAlly PrEfErrED PAyMEnt MEthOD.

It AlsO hIghlIghts ExCItIng OPPOrtunItIEs In EMErgIng MArKEts whErE CrEDIt CArDs ArE A POPulAr ChOICE fOr PAyMEnt, suCh As sPAIn, CAnADA, BrAZIl, sOuth KOrEA, AnD fInAlly ChInA. nOw Is thE tIME tO tAP IntO thEsE grOwIng MArKEts.

5.1.1

it is All About mobile


Mobile commerce is universally agreed to be a huge game-changer to global ecommerce, both domestically and cross-border. from the convenience-driven markets of us where the world, and all the stores within it, can sit in the palm of your hand, to emerging markets of Indonesia and India where consumers are being exposed to the Internet, and the pleasures of online shopping, for the first time via their mobile device.

A MOBIlE wOrlD COnnECts COnsuMErs tO BrAnDs AnD tO EACh OthEr; MAKIng thE glOBE A sMAllEr PlACE.

whAt tO DO nExt?

gO MOBIlE.

spending resources on mobile optimiza-tion is a simple but effective solution to get at low-hanging fruit, especially in emerging markets where smartphones are as popular as desktops. In turn, growing an effective and localized social community, where loyal consumers will interact.

thIs DrIVEs trust AnD COnsuMEr PrEfErEnCE, AnD wIll ultIMAtEly wIn MOrE sAlEs.

5.1.2

PAYVISION 73


Go AGAinst the GrAin


Our survey revealed that the majority of merchants, while more comfortable with cross-border activity than last year, are cautious when it comes to the exotic markets of the East. Most prefer to drive growth through markets where languages and cultures are similar, and infrastructure is developed. while this is sound advice on cross-border expansion, it does reveal a gap in the market.

whAt tO DO nExt?

DOn’t wAIt fOr sOMEOnE ElsE tO gEt thErE fIrst.

the potential lies in the emerging markets now, in particular those where credit cards

are already a popular payment choice. latin America demonstrates considerable potential, but it is the Chinese market opening up the most possibilities for overseas merchants. with vast numbers of consumers, minimal compe-tition and recent government schemes, the doors are certainly opening. there is growing confidence in cross-border spending, largely thanks to increased mobile connectivity and m-commerce.

with assistance from international partners, a notion considered to be of utmost importance in international expansion, and the support of a global acquiring network, now is the time to jump these hurdles.

BrEAKIng frEE Of thE MOlD gIVEs rIsE tO A unIquE OPPOrtunIty tO BE At thE frOnt Of thIs glOBAl quEuE, AnD tO DrIVE ExCEP-tIOnAl CrOss-BOrDEr BusInEss grOwth.

5.1.3

knowledGe equAls Growth

fOr MAny COMPAnIEs, CrOss-BOrDEr ECOMMErCE Is An APPEAlIng BusInEss DrIVEr, But thE COnCEPt Is DAuntIng. thE BIggEst BArrIEr fOr MAny MErChAnts Is A BAsIC lACK Of InfOrMAtIOn.

the simple question of, ‘how do I sell from here, to there?’ is an intimidating one for merchants who are inexperienced with cross-border trade. transparency and knowledge sharing is a means to lower these barriers. In the Eu and China, government e-learning platforms support this need for greater clarity around cross-border ecommerce.

the Cross-Border Ecommerce Community (CBEC) is a global knowledge hub to educate the ecommerce market. the CBEC focuses on sharing research and expertise from collab-orating partners, connecting the dots on all regional knowledge platforms, and collectively driving cross-border ecommerce growth.

5.1.4

PAYVISION 74


About the publishers And editors

6.

About pAyvisionfounded in 2002 by rudolf booker, Payvi-sion is a fast growing, independent Payment solution Provider specialized in global Card Payments for the ecommerce market. Payvi-sion offers acquiring Banks, agents, Payment service Providers, IsO, MsPs and their merchants a secure PCI Dss compliant, PsD licensed international payment processing network enhanced with innovative technology. Over the past decade, Payvision has consistently expanded its geographical footprint across the continents, resulting in vast knowledge and insight in the complexity of Card Payments and ecommerce in a global market subject to great

challenges such as unprecedented technological innovation, changing business needs and an increasingly demanding regulatory landscape.

Payvision’s experience in the different interna-tional regions has resulted in a global network of global acquiring banks, connecting over 300 trusted business partners with more than 5000 web merchants worldwide, for which we process over 100 million transactions a year.


6.1

About CArdnotpresentcardnotpreSent.com is an independent voice generating original news, information, education and inspiration for and about the companies and people operating in the card not present space—one of the only sources of content focused solely on this growing segment of the payments industry. Our only product is information. Our only goal is to provide it in an unbiased manner to our subscribers. the company’s media platforms include the Card-notPresent.com portal, the hub for news, infor-mation and analysis about the payments issues that most affect merchants operating in the space; the CnP report, an e-newsletter deliv-

ering that focused information directly to your email inbox twice a week with no extraneous clutter; the CnP Expo, an annual gathering of the leading companies in the space from the smallest ecommerce websites and technology providers to global retailers and payment processors; and the CnP Awards, an annual event honoring the products and solutions CnP merchants rely on most to increase sales.

6.2

PAYVISION 75


About the AuthorkeIra mcdermottKeira McDermott is a B2B Content writer for Payvision. Prior to becoming a part of the Payvision marketing department, she worked

for Belkin as an Online Marketing specialist. Keira is the author of the latest Payvision infographics, available for download on the Payvision website.

6.3

About the editorsrolf vISSerrolf Visser is the Vice President of global Marketing at Payvision, an independent global card processor for the ecommerce industry. In an expanding cross-border ecommerce market, Payvision is one of the fastest-growing global acquiring networks, connecting Acquiring Banks, PsPs, IsOs and their merchants to OnE global Acquiring Platform, based on a non-competitive partnership model.

rolf is also the Chairman of the CBEC (Cross-Border Ecommerce Community), a strategic global cross-border knowledge hub for the ecommerce industry. the CBEC focuses on sharing research and knowledge, thus educating the ecommerce market in a variety of disciplines and industries.

rolf is a graduate in Digital Internet Marketing with highest honors from Beeckestijn Business school at Vu university of Amsterdam, with 12 years’ experience in the retail POs industry prior to 12 further years’ experience in interna-tional marketing. the last six years of his work have been in the payment industry.

rolf has a forward thinking marketing vision, introducing multichannel, inbound marketing techniques and an award-winning business model, helping transform and elevate busi-nesses through brand equity.. (http://nl.linkedin.com/pub/rolf-visser/0/473/ab6)

Steven caScosteven Casco is the founder, publisher and CEO of CardnotPresent.com, a leading news source for merchants that accept card-not-present payments and vendors that support them. he also created the CnP Expo, the premier educa-tional and networking destination for the entire card-not-present ecosystem. Casco has spent the past decade creating, building and guiding media properties focused on the payments industry. Prior to CardnotPresent.com, Casco was a co-founder of Paybefore.com and the Prepaid Expo. he is a published author in the field of Internet and software security and has served as a university lecturer at MIt and northeastern university.

d.j. murphyAs editor-in-chief of CardnotPresent.com, D.j. Murphy has day-to-day control of the editorial content on the website and leads the publi-cation’s reporting and writing staff. he brings more than 15 years of media and editorial experience to the company, having served as an editor and producer at EsPn.com, ABC and Paybefore.com. Murphy has served in a variety of roles in both new and traditional media including as an internal publications writer/editor and corporate communications manager for a u.s. financial institution and as a freelance writer and columnist.

6.4

PAYVISION 76


payvISIon, An InDEPEnDEnt glOBAl CArD

PrOCEssOr, OffErs IntErnAtIOnAl PAyMEnt

sErVICE PrOVIDErs AnD IsOs unPrECEDEntED

BusInEss OPPOrtunItIEs By COnnECtIng thEM tO

ACquIrIng BAnKs In Our glOBAl CArD PAyMEnt

nEtwOrK. PAyVIsIOn hAs thE In-hOusE ExPErtIsE

tO OffEr glOBAl DOMEstIC ACquIrIng fOr CrOss-

BOrDEr ECOMMErCE. PAyVIsIOn PrOVIDEs Its

CustOMErs wIth: OnE

one payment platform for GlobAl CArd proCessinG

• GlobaldomesticacquirinGwIth thE sAME quAlIty In EACh rEgIOn

• 150+transactioncurrenciesAnD rEgIOnAl CArD sEttlE-MEnt CurrEnCIEs

• riskandfraudmanaGementsOlutIOns

• one sInglE hIgh-EnD rEPOrtIng IntErfACE fOr wOrlDwIDE trAnsACtIOns

• OnE IntErnAtIOnAlly APPrOVED rIsK AnD unDEr-wrItIng PrOtOCOl

• costreductionandoptimiza-tIOn fOr PrOfItABlE CrOss-BOrDEr ECOMMErCE

• 24/7support

fOr MOrE InfOrMAtIOn VIsIt www.PAyVIsIOn.COM

PAYVISION 77


ConneCtinG the dots OnE full sErVICE PAyMEnt PlAtfOrM fOr All yOur trAnsACtIOns. glOBAl DOMEstIC AquIrIng wIth thE sAME quAlIty In EACh rEgIOn.

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