Cross-border sales can be a great source of revenue and new customers. More people in Europe are open to buying cross-border. A trend that has steadily risen since the pandemic. In 2020, over 25% of all e-commerce sales in Europe were cross-border. And by the end of 2022, this number will be nearly 30%, bringing in nearly € 3 billion. Hence, cross-border success holds great promise for merchants. Many are looking at direct-to-consumer (D2C) sales as a way of taking their business into global markets. But cross-border trade has its own set of complexities for merchants to handle. On one hand, shoppers expect cross-border payments to be as smooth as domestic ones. On the other, Europe is a fragmented market, with many countries, languages, local currencies, and local payment methods.
Why do customers abandon shopping carts?
Global cart abandonment rates are at around 76%. In Europe, it is just over 81%. Yearly, online merchants worldwide lose over € 4.3 trillion from abandoned shopping carts! The reasons are many. But the most common ones are unexpected costs, slow loading times, and poor site usability. According to the latest stats, negative peer reviews are the number one cause of cart abandonment. Slow websites, clunky checkouts, and shoppers deeming a site unsafe are some other major reasons behind why they press exit. A poor experience can make you lose customers faster. Lost customers don’t come back and keep other prospects away. Hence, e-commerce merchants selling cross-border have to build seamless shopping experiences – from payments to supply chains to customer service.
How can merchants reduce cart abandonment?
You can limit and reduce cart abandonment by improving the customer experience. Here are a few steps you can take:
Reduce friction in checkout & payments (refunds can be painful)
A smooth checkout is the key to unlock cross-border sales. It helps you to increase engagement, boost loyalty and improve sales. Hence, you have to make cross-border payments as easy and frictionless as local ones. Design smoother checkout flows. Ensure first-time buyers can sign-up easily without having to enter a lot of info or going through many steps. Display all costs upfront so that users are aware. Use clear and concise communication to ensure shoppers have all the info at hand before they make a purchase.
Offer troubleshooting and proactive customer support such as using email and text messages to salvage dropped carts and improve conversion rates. Reduce payment declines. They add a lot of friction to the checkout process, which can impact your CX. You can reduce payment declines by offering multiple payment methods so that shoppers can pay easily with their preferred method. Use AI tools to perform smart payment routing and automatic retries to reduce failed payments.
Secure your defences + keep data safe (to earn trust and guard reputation)
Fraud can damage your brand image and cost you loyal shoppers. Hence, you must secure your payments and data. A robust fraud prevention setup helps you protect your brand against fraud. It improves payment acceptance rates and the user experience. 56% of businesses cite payment fraud and data theft as the top concerns in cross-border payments. AI-based risk management tools help you fight fraud in real-time. They use advanced algorithms and machine learning to analyze millions of transactions to detect fraud as it happens. You can also set up these tools to suit your business needs.
Give customers choice in paying (be flexible, they’ll love you)
Customers like freedom and choice. Hence, you must support popular payment methods and local currencies. For example, e-wallets like Apple Pay and PayPal, iDEAL in The Netherlands, Girocard in Germany, or credit cards in the UK. Offer flexible payment plans (a mix of debit and credit) such as subscriptions, Buy-Now-Pay-Later, etc.
Adopt a mobile-first strategy as most shoppers prefer to shop on mobile. Responsive and optimized mobile payments help you to offer a smooth mobile shopping experience.
Localise and improve communication (be heard and understood)
Localise your payments to reach new customers in newer markets and improve your sales. This requires you to build the right payment mix, work with local banks, and navigate local regulations. For example, merchants selling in Europe must comply with PSD2 and PCI norms to secure payments and shoppers. Working with an international payment service provider (PSP). They can help you connect with local banks and comply with local laws. They can help you streamline your cross-border payments with the right tools and expert advice.
How can Novalnet help?
We are a global PSP with deep experience in processing payments for the European industry. Many of Europe’s leading brands trust us to handle their payments. We can help you accept payments seamlessly in 125+ currencies in 150+ country-specific payment methods. Our instant plug-ins get you up and running within minutes and with minimal coding. With our AI-based risk management solutions and advanced analytics, you can securely process payments in a PCI DSS-compliant environment.
Give us a call today to know more about how we can help with your payments and enable you to become the best in your game.
Jose Augustine is the Chief Business Development Officer at Novalnet AG with extensive experience in European payment industry and a knowledge powerhouse.