The Change in Shopping Behaviour Creating New Opportunities for PSPs

Amal Ahmed, Director, Financial Services and EMEA Marketing at Signifyd

30.06.2023 02:00 pm

#eCommerce

E-commerce is now the driving force for both retailers and shoppers worldwide. The pandemic accelerated the growth of e-commerce, and we’re now seeing unprecedented figures when it comes to online shopping. In 2021, over 2.14 billion people worldwide purchased goods and services online. Businesses of all sizes are displaying their products and services across multiple channels, on eye-catching web shops and across e-marketplaces worldwide. For payment service providers (PSPs) and acquirers, there are tremendous opportunities opening up due to the change in shopping behaviour. Here is how PSPs are reaping the benefits of the new e-commerce world.

Cross-border expansion provides new opportunities

E-commerce has taken a global approach, with cross-border expansion becoming the norm. In 2022, global e-commerce sales reached over $5.5 trillion, and in 2023, global e-commerce sales are set to account for 38% of all ecommerce sales.

As businesses are venturing into new territories, PSPs are presented with ample opportunities to expand their portfolio and services. China is the leading ecommerce market with $1535 billion in e-commerce sales revenue followed by the U.S ($875 billion) as of 2022.

In Europe, the top 500 biggest cross-border sellers generated €58.3 billion in turnover. Signifyd’s report on PSPs fraud details the challenges and how to overcome them. While the UK was leading on the European forefront, it lost its position to Germany with a remarkable €32 billion in cross-border sales, an 18% increase on 2020.

Research by eMarketer shows that 80% of global retailers agree that cross-border trade is profitable or that merchants have tremendously increased sales by up to 1000% after expanding their marketplace presence. Between business trading partners, more than $120 trillion in payments volume flows each year, of which $10 trillion is cross-border trade.

A variety of payment method options

As businesses are expanding into new markets, PSPs can offer their services in multiple currencies and support local payment methods. This can help businesses to overcome the challenges of cross-border payments, such as high fees and currency conversions.

To meet the demand for online payments, payment service providers and acquirers have stepped up their game. They are offering more innovative options, such as mobile and contactless payments, as well as e-wallets. This has made it easier and more convenient for consumers to make purchases online.

PSPs are also investing in technology to provide a seamless payment experience. For example, some providers offer one-click solutions that eliminate the need for customers to enter their information every time they make a purchase.

This not only makes it easier for businesses to accept payments, but it also helps improve the overall customer experience.

Focus on fraud prevention and security

With the rise in online transactions, the risk of fraud has also increased. Signifyd data shows that in the U.S. alone, e-commerce merchants saw a 392% increase in fraud pressure from 2020-2022. To help businesses navigate the new e-commerce landscape, payment service providers can partner with third-party providers that use machine-learning and rich data from a large commerce network to detect and prevent fraud.

That way, merchants can approve more good orders and reject fraudulent ones, in turn minimising the financial revenue loss for both merchants and PSPs.

By partnering with an innovative fraud solution provider, PSPs can maximise merchant retention, control fraud risk, and prevent compliance issues in a cost-efficient way over the long term.

The more diverse the fraud and revenue optimisation package a PSP provides, the more likely it is to result in loyal customers, new merchants, and better financial gains.

The change in shopping behaviour has presented payment service providers with ample business opportunities. Paired with innovative payment solutions, fraud prevention and protection tools, and global payment capabilities, PSPs can meet the new demands and provide a seamless payment experience for consumers.

As businesses continue to adapt to the new normal, payment providers will play a crucial role in enabling them to succeed in the online marketplace.