X-Border Merchant Reality Check


PYMNTS-X-Border-Payments-Optimization-Index-05-04-15_pdfFor eCommerce merchants to effectively cross global borders in their transactions, they first need to cross the checkout counter (albeit a virtual one). As the PYMNTS X-Border Payments Optimization Index suggests, successful cross-border eCommerce begins – perhaps somewhat paradoxically – with catering to the individual consumer in his or her local country and culture.

MPD CEO Karen Webster and Rick Barbari, a Group Vice President at Digital River World Payments, and the firm that collaborated with PYMNTS on the Index recently chatted about the findings: how merchants fared in different categories, where there’s room for improvement, and what can be done to ease friction between payment and checkout en route to cross-border success.


KW: We’re here to talk about a really important body of work, which we published a few days ago, that captured some important information about cross-border payments optimization.

The X Border Optimization Index, powered by Digital River, shed some important light on the pain points experienced by merchants who are interested in taking advantage of the cross-border opportunity and driving new revenue to their storefronts.

So, Rick, how do you view the X-Border Payments Optimization Index? What do you think merchants can glean from it, and why is it important to have such an Index in the first place?

RB: I really like this body of work. I like the study very specifically because I view it as a very holistic evaluation of the consumer experience.

It’s not just about payments. I think what it really caters to is the fact that the consumer – and the consumer choice – will really win in this cross-border activity. And it highlights the importance of merchants to really, really cater the consumer experience to it.

In our experience, we’re watching the marketplace as a whole. eCommerce as a whole is rapidly moving towards localized experiences. And we’re finding that consumers are going to turn away if a merchant doesn’t cater to that localized experience.

KW: I would agree with you. I think it’s a little ironic – and maybe even counterintuitive – that to succeed on the global stage, merchants have to behave very locally. But I think that’s what this body of work told us.

Let’s dig into a couple of the interesting insights. The Index presents a score, on a scale of 0 to 100, that is a measure of how well merchants are doing at optimizing the cross-border experience. The first thing I thought of when I saw the average score of 60 was, “Hmm. If I had brought a 60 home on my report card, my father would have been very upset with me.”

Did you have the same reaction – that merchants have a long way to go?

RB: Yeah, I think that’s fair to say. To phrase it positively: there’s opportunity out there for these merchants.

The average score being 60 truly means that some merchants are doing better than others. Not everyone scores equally. I think the benefit here is that there’s some really interesting, I’ll call it, “segmentation” analysis that really helps the merchants dive much more deeply into what – tangibly – they can do differently.

An average score of 60 is interesting on its own, but when you start to break that down by industry, or geography, or even by experience, the insights that a merchant is going to take out of this are much more substantial than just an average score. But, yes – I would say that there is a gap to close.

PYMNTS-X-Border-Payments-Optimization-Index-05-04-15_pdfKW: Let’s talk about one of the segments that actually did very well, as it appears to be quite optimized for the cross-border experience: travel.

What is travel doing that other segments aren’t doing and that others can learn from in order to make that cross-border experience better?

RB: You’re right – travel really stood out in this study. From my point of view, this is an industry that obviously caters to the traveler, but more specifically is catering to a new, global traveler.

These merchants really do have an appreciation of how to make the consumer experience very localized. There are some neat points that I think the travel sites are doing differently and better than many others. It’s easy to get help; it’s a quick process to check out; and there’s an appropriate number of currency and language combinations.

Think about a site that is tightly tailored to the localized consumer willing and interested in traveling globally. This is just a perfect segment for this type of study. And even something as simple as making sure that the address fields are appropriate by country makes the checkout experience so much easier for the consumer.

KW: You bring up a really important insight that I think applies across all segments, and that is the checkout experience and making it as frictionless as possible. Getting back to what you said at the very beginning, though, the key is to make the experience localized through currency, language and payment options.

Let’s talk about the relationship between payment and checkout friction. What did you take away from looking at the study?

RB: First and foremost, friction is something that I personally look to avoid – especially in my shopping experience. So, I think you’re right: the objective here is to get rid of the friction – period. There’s a lot of ways to do that.

Two key points: No. 1, the study does explore the need for multiple languages, multiple currencies and the like, but I think merchants need to be careful not to throw everything and the kitchen sink at the consumer. It’s all about those knobs, those dials, those capabilities in your capacity and being able to appropriately tune them for the consumer. Don’t just throw it all at them.

When we talk specifically about friction, I liken it to the concept of shopping in a physical store. Let’s say you’re traveling internationally, and shopping in a store. The salesperson doesn’t speak your language; the sizing of all the garments or shoes you’re looking for is different and you don’t understand it; no one’s there to help you; they only accept payment methods that either you don’t have in your wallet or you’re not familiar with and are not sure are safe; the checkout line is too long and slow-moving…it’s just a terrible experience. That’s friction in a physical store.

Now, take that concept and apply it to an eCommerce environment: it’s exactly the same. If you’re showing up to an online solution and everything I’ve just described is your experience, odds are it’s going to turn consumers away.

KW: I would agree with that. And then multiply that by the number of transactions that actually happen on a small screen that make any kind of transaction a little bit more friction-filled, and I think you have a recipe for not a very well-optimized experience.

There’s a lot to digest in the study, and I certainly hope that everyone listening downloads the report and really absorbs the information that is contained in it. There’s a lot to learn from doing that.

And the good news is we’ll be updating this on a quarterly basis and tracking how different segments and countries really do take some of this on board and create a better experience for consumers that optimizes the experience for merchants.

RB: I couldn’t agree with you more. I’m excited about this report because, in my opinion, it’s a real good reality check. And I think that’s important for all of us.


To listen to the full podcast, click here.

To register to participate in an in-depth discussion about the X-Border Payments Optimization Index on May 21, click here.








Rick Barbari, a Group Vice President at Digital River World Payments

With more than 20 years of experience in business leadership, financial services and commerce, Rick Barbari, a Group Vice President at Digital River World Payments, has held responsibility for product strategy, product management, and partner alliances across the suite of international online payments solutions. In his role, Rick oversees a suite of payment product offerings that contribute to the $35 billion in online transactions that Digital River handles across the globe.

Prior to joining Digital River, Rick last served as the vice president for Biometric Solutions at Optum, a UnitedHealth Group company. In this position, he was responsible for the company’s online and physical biometric engagement offerings, as well as its online health and wellness portals, including, a direct-to-consumer wellness destination site.

Before joining Optum, Rick was the senior director of product strategy for Scoring Solutions at Fair Isaac Corporation (FICO), where he was responsible for product evolution and innovation of consumer and corporate credit management analytic capabilities. He also served as a senior manager in the financial services practice at Accenture, driving business, technology and operations consulting relationships with banking, payment and brokerage clients.

Rick is a graduate of Gustavus Adolphus College with a bachelor’s degree in organizational management and a concentration in computer sciences.


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