Payments Trends to Help Merchants Drive Growth in 2023

The e-commerce sector is bracing itself for a challenging year as global economic slowdown, inflation, and interest rate hikes are dampening consumer spending. At the same time, online marketplaces are increasingly competitive and it becomes more difficult to win sales. For example, in 2020, Amazon.com saw an average of 3,700 new sellers join daily.

However, online retailers can find significant growth opportunities with cross-border commerce. For instance, the level of e-commerce growth outside the two biggest markets — China and the United States — is expected to drive the value of cross-border payments to $250 trillion by 2027, according to the Bank of England.

In order to continue growing, e-commerce merchants will need to rely on partners that can help them navigate foreign markets. Here are the three biggest cross-border payments trends that will help merchants manage payments risk and succeed in a challenging trade environment.

Extended Financing Support

E-commerce entrepreneurs struggle to secure funding through traditional lenders. The World Bank found that globally, small to medium enterprises (SMEs) have unmet finance needs of approximately $5.2 trillion a year, which is almost 1.5 times the current lending market for this segment of businesses.

There's a gap for e-commerce financing and without securing funds, merchants may struggle to grow their business. However, cross-border payments providers are in a unique position to help e-commerce sellers gain access to flexible funds that can help them secure inventory, hire staff, or expand their business. In 2023, we will see payments partners build new fintech partnerships that aim to help merchants successfully grow across borders.

Value-Added Services to Accelerate Time-to-Market

As the e-commerce space becomes more competitive, launching new products more efficiently and faster will become a priority to merchants. Luckily, e-commerce entrepreneurs will be able to rely on their partners to cut down on time-to-market.

Innovative cross-border payments providers are strategically investing in developing value-added, integrated services to support e-commerce business growth. In 2023 we can expect payments partners to offer more integrated marketing services, as language and culture barriers remain a major challenge to selling across borders. Forrester Research shows that 50 percent of sales are lost because shoppers cannot find the information they're looking for on e-commerce sites. Additionally, another research study of global consumers found that 65 percent prefer content in their native language, and 40 percent will not buy in another language.

As the payments ecosystem is highly competitive, the industry will shift to consolidating several e-commerce services into one manageable platform. Payments partners will help merchants launch products globally and eliminate major barriers to entry into new markets.

Guaranteed Payments

Securing inventory across the supply chain is a necessity for merchants as each day they're without stock they lose significant revenue. Failed payments or fraudulent transactions can be a major hindrance to cross-border commerce.

Smart cross-border payment providers are offering payment guarantees to eliminate the risks associated with cross-border payments. Merchants will need to look for the right partner that invests in owning all their licences, thus eliminating correspondent banks and "middlemen" who can add delays, costs and risks to cross-border payments.

Conclusion

Cross-border payments partners realize the importance of seeing customers succeed. The trends discussed here all point to providers expanding their product and service offering to help e-commerce entrepreneurs grow. For merchants and payment providers, expanding into international markets can bring long-term business opportunities and growth. Partnering with third-party providers, whether for improving payment security or increasing the efficiency of operations, can make the journey to payment modernization and innovation in this sector faster and easier.

David Messenger is executive chairman of LianLian Global, cross-border growth partner.