Challenges ahead for cross-border commerce

UK-cross border retail has declined by 71%, according to research by payments platform Adyen.

A report by FinTech & Finance News detailed that 54% of consumers agree that the delivery partner is an important factor when choosing to shop online with a retailer. Additionally, 37% of shoppers said they will only buy something from abroad if the delivery charge is reasonable.

A common fear shoppers have, according to Adyen’s research, is from unexpected additional taxes and charges, with 30% of shoppers saying they have avoided shopping with an international retailer for this reason.

The desire to avoid a purchase from abroad is hardly surprising during a year troubled by supply chain crises. The Suez Canal incident at the start of the year caused major delays. Additionally, lorry driver shortages caused by Covid-19 travel complications left consumers being warned their Christmas presents might not have arrived on time.

In addition, a lack of price transparency appears to be another deterrent. One in five shoppers (22%) said they would only shop abroad if they can use their usual payment methods, and 20% expect prices to be displayed in their local currency.

The preference to avoid high delivery fees and unexpected taxes is reflected in consumers’ preference for in-person shopping. While online shops have suffered, it looks like local brick and mortar stores have benefited. Buy Now, Pay Later provider Afterpay released its consumer shopping trends for 2021, which revealed in-store shopping grew 384% year-on-year.

Colin Neil, managing director, Adyen UK, said, “If Brits are finding it harder to shop abroad, you can be sure that shoppers from other countries will have similar experiences, which is a big concern for those UK retailers trying to sell internationally.

“While global supply chain challenges and international customs charges are out of the control of retailers, there are many things they can do to make cross-border commerce easier. Things such as converting currencies and accepting common payment methods from other countries for online shoppers are low cost, and straightforward ways to simplify the experience, but they have massive impact. In an age where every sale counts in retail, these small tweaks can be all the difference.”

The research was part of a report on the state of the UK retail sector, titled The Expectation Gap. Research was conducted by Censuswide and Opinium on behalf of Adyen.

Copyright © 2022 FinTech Global

Enjoying the stories?

Subscribe to our daily FinTech newsletter and get the latest industry news & research


The following investor(s) were tagged in this article.