A recent blogpost by Currencycloud has underlined how payment service providers (PSPs) and acquiring banks are best served to aid the growing cross-border e-commerce market.
Currencycloud underlined that alongside there being a big increase in online spending during the pandemic, there was also a huge uptake in cross-border e-commerce – with this market growing 35% in Europe, as well as the UK becoming the third most popular market for online cross-border shopping behind the US and China.
Growth in the e-commerce market shows no signs no of slowing down, with the cross-border e-commerce market set to triple its value to £736bn by 2023. As a range of key market players look to secure a sizable piece of the market, who can help these firms on their way?
The answer – Currencycloud believes – is acquiring banks and PSPs. Why? The company states that these two stakeholders are able to help merchants take advantage of the opportunities offered by cross-border e-commerce who will be most in demand.
Currencycloud said, “The traditional market for cross-border commerce has made it challenging for PSPs to optimise their cross-border proposition, especially when serving the needs of their growing SME merchant base. The banking model for cross-border payments has historically involved hidden fees, high costs, delays and reconciliation issues, and continues to do so.”
In order to help facilitate this cross border e-commerce market growth, PSPs and acquirers may be required to support a wider set of settlement currencies, and if they don’t, they risk being replaced by more agile players. PSPs must also be able to collect funds in more currencies or they will be seen as a hindrance to growth.
The WealthTech firm added, “ With payment volumes continuing to increase exponentially, the revenue opportunities of taking control of the FX cannot be ignored. As processing margins are being squeezed and with the landscape continuing to become more competitive, carving out a new revenue stream is more necessary than ever.
“PSPs and Acquirers can stand out in the cross-border ecommerce world by delivering additional value to their merchants. Providing multi-currency payments accounts is a very effective way of doing just that. It’s logical really. Merchants are now more likely than ever to have both customers and suppliers globally, making a multi-currency solution of increasing value to them.”
Read the full blogpost here.
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