Cross Border Commerce

Why The Ocean Itself Isn’t The Biggest Hurdle To Overseas Shipping

Free shipping and returns may increasingly be expected by U.S. online consumers, but it’s a whole different ballgame when it comes to international purchases. In this month’s PYMNTS X-Border Payments Optimization Tracker™, PayPal’s Director of Global Merchant and Cross-Border Trade Initiatives, Melissa O’Malley, talks to MPD CEO Karen Webster about the impact on its “Return Shipping on Us” program and its impact on x-border sales. Plus, an update on the 69 players who play in the cross-border space.

The February edition of the PYMNTS X-Border Payments Optimization TrackerTM features the latest news, and supplier/provider updates of those players collectively trying to seamlessly connect consumers and merchants worldwide. Now keeping tabs on 69 global payments service providers, this monthly Tracker is the framework for evaluating players in the cross-border payments landscape. 

In addition to the notable nuggets from Nielsen’s January 2016 Connected Commerce Report, this month’s Tracker also has news on x-border players that are seeing demonstrable lift in transactions and growth, underscoring further that when it comes to online sales at least, there are no borders.  

Why is shipping internationally so complicated?

Despite the fact that U.S. consumers have become accustomed to free shipping and returns in recent years – in fact, many have come to expect it – shipping internationally is a complicated and hairy business. Is selling cross-border really worth the hassle for consumers and merchants alike?

In our February PYMNTS X-Border Payments Optimization Tracker Cover Story, we interviewed Melissa O’Malley, PayPal’s Director of Global Merchant and Cross-Border Initiatives. O’Malley discussed the role shipping and logistics play in the success of cross-border commerce. 

Here’s a sneak peek:

When it comes to international commerce, O’Malley said, shipping logistics, along with related issues and regulations such as taxes and customs, is “the toughest nut to crack in cross-border trade.” Shipping internationally is complicated and takes merchants a lot of time to deal with, she said. When it comes to getting over cross-border shipping hurdles, there isn’t a one-size-fits-all solution because each individual country has its own shipping complexities. As a result, O’Malley said, “Getting a landed cost if you’re a smaller merchant and providing that landed cost to an overseas customer takes a lot of time, and most merchants want to focus on their business and not being a shipping and logistics expert.”

 And then there are the return shipments – reversing the rigmarole. In research conducted by PayPal and Ipsos on cross-border consumerism last year, 37 percent of 23,000 U.S. online shopper participants said that the difficult process for returning products was a significant barrier for cross-border shopping. The biggest barrier? Forty-seven percent said shipping costs. No doubt, the two can easily be intertwined.






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