Cross-Border’s Best-In-Class Merchants

You want to succeed in cross-border commerce? No better place to start than by looking at the merchants that are at the top of their game. In a recent webinar about the latest X-Border Optimization Index, John Phillips, Head of Marketing for Digital River World Payments, and MPD CEO Karen Webster discussed what can be learned from “the best of the best.”

What merchant wouldn’t want a piece of the $1.2 trillion dollar cross-border commerce pie?

It’s a question made more relevant when considering most really aren’t optimized for the global eCommerce shopper.

That was the topic of a recent, rousing, 60-minute digital discussion between John Phillips, Head of Marketing at Digital River, and Karen Webster, CEO of MPD. They shared the findings from the latest results of the X-Border Payments Optimization Index to a group of merchants eager to learn from those considered among X-Border’s Best In Class.


“Merchants who want to do business with a cross-border consumer could do a whole lot better than they’re doing today — but there are a few that are truly best in class, who set the standards for others,” Webster observed.

One reason for that, Phillips observes, is that out of necessity, merchants are selling goods cross-border which gives them a “failing grade” — 56 out of a possible 100 — according to the Index – not because it’s something they’ve planned for. Mobile devices give consumers everywhere unfettered access to the Internet – and merchants with a virtual storefront.

The top score on the Index, accounting for the range of all sites studied, was 89, while the lowest was 22.

Yes, there’s work to be done…



But, as Phillips noted, there is a huge “opportunity for all merchants to improve, regardless of the score.”

So who’s got it right?

Among categories, Travel ranks the highest, with a score of 63. Booking airfare, says Phillips, is a “good that’s more easily delivered than something physical.”

Not surprisingly, he said, Jewelry ranked at the bottom of the category list (with a score of 48), due to the high value of the items, custom implications, taxes, and the price/value component. There is a whole lot more risk associated with buying a $2,500 piece of jewelry that is hard to compare than a $2,500 airline ticket, which is much easier to ascribe value to.

There are 4 common elements that make merchants best in class – lessons that all merchants can learn from:


Of all of the things that the connected cross-border consumers expect, explains Phillips, a “local experience” is high on the list. And essential to that is language.

The highest-ranking countries observed by the Index were able to provide a number of languages, with the minimum bar being set at 6.

China came out on top in this category, with 63 percent of its merchant websites offering 6 or more language options. It’s a “pretty big drop down to No. 2,” noted Phillips, which was the U.S., with 37 percent offering 6 or more languages.

Having their preferred language on a website makes a consumer feel comfortable, not only so that they can navigate the site, but also, as Phillips adds, so that “they feel it is a credible source that caters to their needs when looking for help.”

Webster stresses the importance that local isn’t necessarily the country in which a merchant website is based, but rather the country where the consumer is located. The consumer needs to feel welcomed by what is familiar to them, first and foremost.

And language is the first hurdle to overcome.


In terms of currency options, 6 was the magic (minimum) number again for the purposes of the Index. And, it’s really not all that hard to deliver. Cross-border merchant websites can achieve this by providing currency converters or default to the familiar currency for the consumer — that also includes tax and shipping calculations.

Phillips mentions some examples where a site would initially present the consumer’s native currency, but by the time they got to checkout, it had converted to a different one. “Even worse,” he remarked, is when that happens after a transaction has been executed. A merchant can’t expect the consumer to look up exchange calculators; that’s a situation that can lead to cart abandonment or chargeback.

Factoring in nuances such as shipping costs, adds Webster, is important for merchants to focus on, as well.

China was again at the top of this category, with 74 percent of its merchant websites offering 6 or more currencies. France and Italy brought up the rear, with 11 percent and 8 percent, respectively.


Payments, Webster commented, can be “kind of the hairball” in the cross-border commerce experience.

That speaks to the fact, says Phillips, that each country will have its own mix of locally relevant payment methods. “That’s why we’re in business at Digital River World Payments; we have those connections that more easily allow merchants to tie into those, so we know how important it is to offer those locally preferred payment methods.”

For the Index assessment of this category, the PYMNTS and Digital River team looked at what Phillips calls “just the basic global brands” of payment methods  — Visa, MasterCard, Amex, Diners Club, PayPal — and how many of them sites offered.

The U.S. leads this category with an average 3.9 major payment methods; France is again second-to-last (with 3.1), and Mexico last (offering an average of 2.6).

“It’s clear [merchants] need to offer at least the ‘big 4,’” observed Phillips. However, because of varying buying habits and cultural consumer behaviors linked to different nationalities, additional factors — such as how comfortable the buyer is with purchasing via credit card, or with post-purchase invoicing, or using certain wallets — “that share of payments needs to be represented above and beyond those global payment types.”

Webster agrees. Because not everyone has access to “the big 4,” the key is advising merchants on when to know how to accommodate something that is very specific to a particular country.


Minimizing the time from purchase decision to checkout is something that “doesn’t just relate to cross-border,” Webster observes. It’s an element that every merchant — domestic or otherwise — needs to take seriously.

Given that, she found some of the results of this Index in this category to be “insanely stunning – and not in a good way.”

With the goal being the fewest number of pages to checkout, Spain leads all countries surveyed, with an average of 5.8. France yet again brings up the rear with 9.9.

With consumers — both domestic and cross-border — getting to the point where they’re “expecting kind of a one-click checkout,” states Phillips, the key for merchants is to “tighten up the process” by helping consumers get to checkout quickly and efficiently; that will equate to a higher conversion rate.

“Where this becomes critical in cross-border,” says Webster, “is to think about how a lot of this is being done on the mobile device.” She personally finds 6 pages on a mobile device to be “torture,” and 10, unforgivable.



 This quarter’s Index analysis included a number of new insights that help merchants make the most of this new sales opportunity:  mobile friendliness; free shipping; and rewards.


“Mobile trumps everything,” states Phillips plainly, “because it’s table stakes, even for the domestic proposition.” He mentions how a new Google algorithm that incorporates mobile-friendliness into its search results rankings “ekes from content-driven sites into eCommerce.”

Of the categories offering mobile-friendly sites, Health & Beauty ranked first with 92 percent. Both Webster and Phillips were surprised that it overtook Travel, which came out on top in this category in the previous Index, and now took second place with 90 percent.

Jewelry was again at bottom, with 56 percent. Though it is in last place in many categories, Phillips finds it “kind of interesting” that that’s the case here, because to create platforms with mobile presentations is “such an easy thing to do these days.”


Phillips refers to shipping as “a big piece” — particularly in the Western world, where free shipping is “almost a necessity” for a merchant to be competitive.

Travel came out on top in this category, with 100 percent of sites offering free shipping. Phillips refers to this ranking as almost a “default,” given that there typically is no physical item to be shipped in terms of online travel purchases.

Discounting travel, then, Jewelry goes from “last to first” in the category, with 56 percent of its sites offering shipping at no cost. In the U.S., 75 percent of all sites offered free shipping, while Japan and Germany came in at the bottom, with 19 percent and 13 percent, respectively.

A takeaway for Phillips, as he describes it, is that free shipping is the “cost of entry” to compete in the domestic market — “from a cross-border perspective, it takes on additional complexities,” due to elevated shipping costs and distribution capabilities compressing margins.

Webster adds that with “shipping, period” being such a severe friction point, the importance of getting it right is even greater in cross-border, due to the consumer uncertainty that often accompanies those transactions.


The Mass Merchant sector leads the way in rewards, with 62 percent of sites surveyed offering some type of incentive for the consumer to buy. Jewelry is at the bottom of this category with 11 percent. Among countries surveyed, France leads this category, with 46 percent of its merchant sites offering rewards.

Webster suggests that “rewards is something that can be applied successfully in a cross-border environment, if the merchants have the tools to enable that effectively.” While it should be implemented, she notes she and Phillips haven’t noticed it much in the work they’ve done so far.



“The bottom line,” according to Phillips, is that opportunities exist for every merchant in the cross-border space, regardless of the specifics of their business or environment.

“Index scores are what they are,” he says, “but in general there are some basic principles that can be applied” to address friction elements so that a merchant’s cross-border experience can rival its domestic one in growing the company’s total revenue.

Webster adds that “while some attributes are very specific, there are also nuances that go into how the experience is shaped.” She cites trust in merchants as a big factor in this regard. Giving the example that a lot of consumers like shopping from U.S. merchants because they believe what they are buying is authentic, that it will be delivered in a timely and relevant fashion, et al, she remarks, “even those aren’t necessarily things you can measure based on the website experience.”



Webster addresses a common question raised by the audience in regards to the Index: Why no Brazil? It’s such an important market for digital commerce.

Phillips explains that, although Brazil “is really important market for Digital River, merchant partners and commerce generally, it’s also very complex.” As the study moved from its first to its second Index, he and Webster recognized that, given the amount of sites they wanted to collect information from, Brazil didn’t provide a large enough sample for insights. “It was borderline to be included,” however.

Wrapping up the discussion, Phillips and Webster present a slide with communication channels for audience feedback (including and

The Index, says Phillips, “is intended to be useful to a much broader audience than ourselves.” Therefore, he and Webster welcome suggestions for new friction elements, new categories, and new countries — as that will continue to make the Index a “communal document.”

With that, Webster and Phillips conclude by saying that they are excited about the work they’ve already started for the third edition of the Index — coming next quarter.



The X- Border Optimization Index identifies sources of friction from a consumer’s perspective in shopping on websites. The Index assesses 60 sources of friction that span shopping; payment; incentives; and the speed of the transaction, from product search to checkout.

Those 60 attributes are applied to 10 categories of goods and services Apparel/Accessories; Books/Music/Video; Computers/Electronics; Health/Beauty; Housewares & Home Furnishing; Jewelry; Mass Merchant; Specialty; Toys/Hobbies; and Travel.

10 countries are examined in the cross-border space: Canada, China, France, Germany, Japan, Italy, Mexico, Spain, the U.K., and the U.S.

A team of analysts then shopped ~200 websites across those categories and countries to establish the Index Score.

Sites selected are those intended to cater to a cross-border audience: merchants that presented information in more than one language and included more than one currency option.

The results were put into a model built by PYMNTS who analyzed the attributes and sources of friction, and produced the Index.


To download the latest X-Border Optimization Index and Tracker, click here