How Many Payments Does A Cross-Border Merchant Really Need?


American consumers, as a group, are finished with friction-filled, lumpy checkout experiences.

Even a couple of years ago, these consumers were a more tolerant group as online checkout experiences started to improve. But a few years of using mobile devices to shop online has radically changed their expectations and really upped the bar, Braintree’s director of international, Albert Drouart, told Karen Webster in a recent conversation about the future of cross-border eCommerce, saying that it is currently “make or break for a merchant in the United States.”

And while that does, indeed, create a high bar to clear, constantly facing a cohort of demanding customers has proven to be an advantage, as those same merchants have sought to claim their share of the recent bounty in global eCommerce.

Now, Drouart told Webster, there’s a sharpened focus on what’s relevant to drive higher conversions, particularly for shoppers who choose to conduct commerce outside their domestic market.

It’s a focus that’s different from what payments enthusiasts once thought it should be.

Why Less Is More

With respect to the payment methods merchants must accept to develop a robust global eCommerce business, less is more. This, he explained, flies in the face of conventional wisdom, which amounts to adding as many payment methods as there are countries in the world to keep consumers shopping and using a payment method they know and may use when doing so domestically.

Data, however, tells a different story.

The latest issue of PYMNTS’ X-Border Payments Optimization Index reports that the secret to improving cross-border conversions isn’t adding more choices to the mix; it’s narrowing the field to the ones that really matter and then building a faster, frictionless experience around them.

The ones that really matter? Drouart said they’re the ones that are accessible to the majority of today’s online consumers.

Prioritizing Payment Choice

The X-Border Optimization Index, a PYMNTS and Braintree collaboration, examines the friction associated with the checkout process from 180 merchants across 10 country corridors. The Index measures friction by tracking more than 50 attributes across 15 categories. The two categories that tip the conversion scales in favor of the merchant are, perhaps unsurprisingly, payment acceptance and navigation.

The study noted that the highest-scoring merchants consistently offer only three payment methods: Visa, Mastercard and PayPal. Those are often supplemented by a domestic scheme associated with large groups of consumers who engage in commerce – Alipay for the Chinese consumer, for instance. After about 10 different payment methods, merchants experience diminishing returns.

The lesson, according to Drouart, is that doing fewer things better drives a more satisfying consumer experience, without sacrificing sales or conversions.

“Doing those three or four [payments methods] well gives a merchant much more consumer access than they might think,” explained the executive. “It also translates into a lot more simplicity in how well customers are served,” adding that for each payment method merchants accept, they must manage the operational flows, refund flows and dispute flows for each.

Building for the Right Customer

The implication, Drouart said, is for merchants to make informed judgments about the methods that will be most relevant to the segment each is trying to reach.

As an example, Drouart explained that India appears to be a very complex market with a massive number of buyers, sellers and potential payments intermediaries. It’s also a market with a population of one billion-plus people. However, to conduct commerce there, one might be better served by targeting the 200 million affluent, digitally enthused Indian consumers who are already wired in for eCommerce and have the income to support online buying, are already carrying cards and are comfortable using them to shop online.

“Those customers are very happy buying with their Visa, Mastercard – so merchants don’t have to dig any deeper from a payments perspective today to enter and grow into the Indian market,” Drouart said. “Today, a merchant can capture a market that is 200 million people deep using only three methods of payment.”

There are a billion potential customers in India, of course, but the merchant contemplating an expansion into the market doesn’t need to start with a billion consumers and a few hundred potential payment methods – they need to start with the addressable customers in the set, meet them with the methods they are already using, and build out local customization from there. Among the services Braintree offers merchant partners, Drouart noted, is the ability to take that expert look on the market and the consumers in it – and then to find the most direct path to serve those customers.

In other words, companies can get a lot of bang for their global eCommerce buck without dealing with unnecessary payment complexity.

Building Better Navigation

The goal should be to avoid building complexity into the online payment flow. Consumers are looking for commerce experiences that are not only familiar, but also simpler, faster and more transparent.

“The goal isn’t to create a totally new experience for customers; it is to improve an experience they are already familiar and comfortable with,” he explained, which implies merchants should first “put themselves in the buyers’ shoes” when designing the digital shopping and checkout experience.

“What we say on our team is that a lot of what we call ‘cross-border’ is actually very local for the people making the purchases they are trying to transact with. What merchants offer has to embody that localization,” Drouart said.

It might seem like a simple premise, but even today — more than 10 years into the mobile commerce revolution — a lot of merchants are still working on that evolution.

Particularly, Drouart noted, because that evolution is continual in the digital age.

The good news is that for the first time, merchants also have access to the types of data and tools that make it much simpler for them to unlock commerce opportunities worldwide – without opening a Pandora’s box of complexity for themselves or their buyers.

That can mean a lot of things, like tapping into tokenization, vaulting and data storage so that “repeat customers are easily taken care of.” The goal, he noted, is to take steps out of commerce processes and make them smoother, merely by looking at the data they already as the first step in creating a much better commerce flow.

For first-time customers, he noted, it can be as simple as including things like PayPal’s OneTouch Buy Button – as once again, it takes out steps, forces customers to make fewer choices and asks them to input minimal data.

Instead of taking on global commerce as a global problem, it becomes a problem of identifying the local buyers’ friction and conversion killers and finding the right solution set for them.

Act global — think local.

It’s an inversion of a popular bumper sticker – and, according to Drouart, it’s the right way forward when taking on an entire world’s worth of opportunities, one market and set of buyers at a time.