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No Longer Just Local: Why Cross-Border Commerce is Opening Doors for Smaller Retailers Ready to Compete

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Digitization has afforded retailers access to new markets and more consumers. Small local retailers are now competing with massive conglomerates on a global scale. On the other side of the purchase, consumers now have access to brands across the globe — and the appetite to try new things through online experiences. When you give smaller retailers the tools that the massive conglomerates have, interesting things happen — “buy local” becomes a possibility from anywhere in the world.

Today’s consumer has never been more diligent, nor have they ever been so immersed in online ecommerce. They take the time to learn about their purchases from source to delivery. The savvier the customer, the more agile merchants need to be to remain relevant.

The Tide is Turning

While Amazon seemingly steamrolled competition in its most profitable year to date, the tide is turning. A major Wall Street Journal investigation reported it had listed “thousands of banned, unsafe, or mislabeled products.” Consumers who may once have seen Amazon as the one-stop shop for anything and everything are now starting to view it as an increasingly expensive marketplace that’s often plagued with counterfeit goods.

Now is the time to shine for smaller and mid-sized retailers that prioritize good service, quality products, and have the flexibility to deal proactively with the modern complexities associated with cross-border ecommerce.

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Borderless Challenges

The pandemic forced retailers to pivot, re-strategize and adapt like never before. It forced brands to think of new solutions to new problems while never losing sight of the ever-present need for fast and predictable delivery, robust supply chains and reliable sourcing.

Operating in the global market provides retailers with a sea of benefits — most notably access to a customer base that spans the globe. But brands reaching out into new markets always have to keep the cross-border challenges that arise from global complexity top-of-mind.

Savvy brands know that to succeed, they must constantly focus on the details. FX rates, local payment method offerings, local currency availability — this is where a brand sees “make or break” cart abandonment. Checkout optimization is never “set it and forget it.” Never. Cross-border transactions are plagued by high decline rates, with a shocking 18% of foreign ecommerce transactions being declined in the U.S. alone.

My advice to businesses operating in this ultra-competitive marketplace is to remember that success is in constant refinement of the customer experience. This is the driver behind any worthwhile ecommerce strategy. Brands must do everything in their power to deliver better service than their rivals while working to ruthlessly optimize cross-border operations.

What’s Your Customer’s Preferred Payment Method?

Across the globe, different regions have their own favored payment methods. For example, 56% of ecommerce transactions in the Netherlands use iDEAL to conduct real-time bank transfers.

For many consumers, it’s a matter of security. Offering a payment method that they’ve never heard of, even if it’s in their regional currency, can make them wary of hitting that ‘buy now’ button.

Even if they do feel secure enough to pay, that may not be enough. Take the Netherlands, for example. If you aren’t supporting iDEAL in that country, then you’re creating barriers to payment and friction for 56% of your potential customer base.

Ultimately, each market a merchant trades in has its own nuances and payment culture. The good news is that you don’t need to understand all these fluctuations and variations yourself, as a payment partner with expertise in local payment methods can enable merchants to target every customer, in any country, as a unique individual with unique purchasing patterns.

Don’t get Caught out by Foreign Exchange (FX) Rates

One of the biggest, most painful sticking points for retailers dealing in cross-border ecommerce is finding that their prices are less competitive than larger or local competitors due to the FX rates they’re using to price their products. The easiest option is often to absorb the costs and watch profit margins suffer as a result. Clearly, this isn’t the best option.

Retailers need to work with local banks, or expert payment providers, to ensure they get the best FX rates available, allowing them to increase their price competitiveness and secure more sales, especially in regions where shoppers are more FX-aware.

There are specialists who can get you these wholesale rates, and solutions that can help optimize a brand’s FX offering. Without these, profit margins wither, and customers won’t keep coming back.

Be Regulation-Aware

Perhaps the most important piece of advice I have for every brand I work with is to continually investigate and make themselves aware of the various territory regulations.

Secure Customer Authentication (SCA), for example, is a European regulation that is part of the EU’s Payment Services Directive (PSD2). While a similar protocol has not yet made it into federal regulation in the U.S., regulations aren’t going anywhere, and retailers need to be aware of the impact they can have on their online business.

Indeed, efforts such as the California Consumer Privacy Act (CCPA), which seeks to harmonize U.S. data privacy laws with the EU’s General Data Protection Regulations (GDPR), are an indicator that the North American region is perhaps on the fast-track to catch up.

Many Problems, One Solution

Retailers — no matter their size or specialty — must remember that each market a brand trades in has its own variations and nuances. This might seem overwhelming, but the good news is that nobody needs to go it alone. While employing a full team of qualified experts in the regions you’re expanding to is one way to help your cross-border efforts succeed, you can also look to leverage expertise elsewhere to achieve your goals.

Partnering with experts in the ecommerce arena can provide all of the benefits you would get by operating in-country, without the huge investment of both time and money it takes to set up business across borders. With the right partner, brands can stay competitive and compliant, and can get access to the hyperlocal knowledge and expertise that will make international trading a pleasure and not a pressure.


Sam Ranieri is the Founder and CEO of cross-border payments provider Reach. A seasoned executive and leader, Ranieri has more than two decades of experience in the fintech, foreign exchange and international treasury management industries, along with several years of entrepreneurship expertise. As the leading voice at Reach, Ranieri brings ethical, proactive and impassioned management to all arms of the business, being responsible for organizing Reach’s risk and compliance practices, top-level budgets, key relationships, strategic direction and debt and capital raises. Prior to his role with Reach, Ranieri was the driving force behind the Calforex Corporate division, setting up the business in 2002 before steering it to an annual revenue generation of $3 billion CAD. As the business grew, he managed the division’s successful merger with Axiom Foreign Exchange International, leading to the creation of Shift Connect Ltd. Ranieri now also serves as a Director on the board at Shift in addition to his role with Reach.

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