Failed Cross-Border Payments Cost US Merchants an Estimated $3.8B


Many U.S. eCommerce merchants prioritize international markets, but see higher failed payment rates in cross-border transactions than in domestic ones. These payment failures significantly impact their bottom line. PYMNTS Intelligence estimates that failed cross-border payments cost U.S. merchants at least $3.8 billion in lost sales in 2023.34%: Share of merchants that derive at least half their sales from international markets

Most of these merchants struggle to identify the underlying causes of these failed payments, leading to other costs, and compound their losses. These findings highlight the critical importance of merchants collaborating with payment service providers (PSPs) to implement effective cross-border payments solutions.

These are just some of the insights detailed in “Cross-Border Sales and the Challenge of Failed Payments,” a PYMNTS Intelligence and Nuvei collaboration. This report examines cross-border commerce in U.S. eCommerce firms and draws on insights from a survey of 300 heads of payments or fraud departments from international eCommerce companies conducted from Aug. 10, 2023, to Aug. 31, 2023.

Other key findings from the report include the following:11%: Average payment failure rate for merchants focusing on cross-border sales

High cross-border payments failure is a serious hurdle.

Merchants focused on cross-border sales report an average cross-border payment failure rate of 11%, notably higher than their less internationally focused counterparts. This pain point is more acute for mid-sized firms in the $250 million to $500 million revenue range. Additionally, 82% of merchants struggle to diagnose the causes of failed payments, highlighting the need for robust solutions.

Cross-border payments automated recovery solutions are on the rise.

55%: Share of merchants with a high cross-border focus using automatic retry solutionsTo combat the complexities of international transactions, merchants with a high focus on cross-border commerce have turned to automated solutions. Fifty-five percent of merchants employ automatic retry systems. Despite the priority these merchants place on international markets, their rates of collaboration with PSPs remain relatively low.

Most merchants demand innovative fraud management tools.

Interest in combating friendly and chargeback fraud is high. Sixty-nine percent of merchants show strong interest in innovative fraud management tools, with a notable preference among those selling physical goods. Enhanced customer satisfaction is also a key motivator, with more than 80% of merchants with at least medium cross-border focus citing this.

Collaboration can be pivotal for merchants to increase cross-border payment success rates, enhance customer satisfaction and expand cross-border market reach. Download the report to learn how eCommerce merchants can work with PSPs to deploy the right failed payments recovery technologies and strategies.