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Find Opportunites > USA Trends > What are the factors that hinder cross-border shopp
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What are the factors that hinder cross-border shopping for American consumers?
Release time:2024-03-15

Throughout the years, the e-commerce market in the United States has been developing towards diversification, while on the other hand, trade disputes between the United States and other countries have led to constant changes in its financial markets and supply chains. To this end, Steve Villegas, the head of PPRO business development for cross-border payment service providers in the United States, shared his views on the current situation of the US digital payment market and changes in the e-commerce market,

How is the digital payment market in the United States different from other parts of the world?
Compared to anywhere else in the world, the online payment market in North America (especially in the United States) is dominated by credit cards, accounting for as much as 59%, while credit card payments for online shopping in Western Europe account for 43%, and in Eastern Europe this number is 34%. Only 30% in the Asia Pacific region.
Steve Villegas said that this data is very important for sellers because you must give consumers a trusted payment method, and standard payment methods like credit cards are actually an "alternative" to the rest of the world.
However, there are also signs that the US payment market is becoming more diversified. In the past two years, the proportion of online shoppers in the United States using bank transfer applications for payment and using electronic wallets for payment has increased from 6% and 20% to 8% and 23%, respectively, while credit card payments have decreased from 61% to 59%. Although it is only a minor change, in this market dominated by credit cards for a long time, such changes still deserve close attention.
Are there any other obstacles for cross-border shoppers who want to purchase goods from American sellers?
Steve Villegas believes that American sellers still lack awareness of the advantages of cross-border sales. In the United States, only 37% of sellers sell cross-border. By comparison, the UK has 42% and Germany has 47%. Moreover, compared to domestic customers, American sellers offer a slightly narrower range of payment methods to foreign customers.
For example, 73% of American companies offer PayPal services to domestic consumers, but only 69% of companies offer electronic wallet payments to foreign consumers. Moreover, the common payment methods offered by American sellers to cross-border customers are PayPal and bank transfers.
But in Eastern Europe, these payment forms only account for 39% of all transactions. This means that 61% of consumers use payment methods that many American sellers do not support when shopping. And over 20 million people in Russia and some former Soviet countries use an electronic wallet called QIWI, which is not supported by the United States and Western Europe. If the seller does not provide QIWI, it is very likely to miss out on the business of these 20 million customers, so the key for the seller is still to provide the correct payment method for each market.
How can other countries attract more American shoppers to participate in cross-border shopping?
The domestic market in the United States is already very large, to the extent that many Americans do not consider shopping in other countries. According to PPRO data, only 34% of American online shoppers purchased goods from overseas in 2018, while Canada had 63% and Mexico had 66%.
Steve Villegas believes that although attracting American consumers to shop poses challenges, there are still opportunities. For example, if the Canadian dollar, which has been performing strongly against the US dollar, shows signs of price decline for a period of time, then now is a good time to have your advertisement appear in front of American consumers and promote your products to them.
Steve Villegas further pointed out that China, which accounts for 57% of all cross-border shopping, is a foreign consumption destination that American online shoppers often visit. At present, China's e-commerce has developed relatively maturely and has also attracted a large number of American e-commerce users.
Will the current trade dispute have an impact on American sellers?
Steve Villegas stated that there is no doubt that a trade dispute does not mean that the company is powerless in reducing risks. If a seller purchases goods from a market hit by tariffs and resells them domestically, you can apply for tariff exemptions from the Office of the United States Trade Representative. If you are a multinational salesperson, you can do your best to maintain agility. Although volatility is detrimental to sellers, it is not always the case. In an unpredictable market, agile sellers will have an advantage.

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