Online sellers are at a crossroad. The immense opportunity of being able to sell to everyone across the planet is complicated by a lack of support for payments.
The global ecommerce market is, without a doubt, poised for growth. Sales are expected to reach $1.09 trillion by 2017. That’s an annual compound growth rate of 16.7%. Online selling is growing much faster than retail. But unlike traditional retail, by 2017 more than half of all sales will be from outside the US and Europe. Which means ecommerce companies will have to broaden their horizons as the market expands.
This means having to deal with multiple regions, different currencies and a labyrinth of foreign regulations. Selling to the world is lucrative but not easy.
Purchase behavior tends to vary across the world. For a global ecommerce operation to survive, it must adapt and offer convenience to everyone. But our payment solutions lag the rest of the world.
US payment solutions and financial infrastructure often lags the rest of the world. Credit card security, for example, is dangerously outdated. Meanwhile, more than 20 billion physical checks for sent out for payments in the US in 2012.
The Federal Reserve Bank is well aware of the lack of financial sophistication, and is working towards slowly modernizing the system. But there is still a long way to go.
Meanwhile, the lack of a modern payment infrastructure has limited the ability of local e commerce companies to expand across borders. According to a report by AFEX found that more than 25% of local businesses had faced currency volatility while dealing with customers abroad.
The comparatively slower pace of the US banking system was to blame and more than 43% of surveyed businesses agreed that automating the payment network was the key to solving this issue.
Thankfully, there are solutions for businesses that want to automate payments. The widely used Automated Clearing House (ACH) network is the best example. The network currently handles handles about $39 trillion through 22 billion transactions a year. That represents over 20% of all online transactions.
Payment providers allow businesses access to the ach network which makes payments safer, more reliable and a lot quicker. Businesses that sign up can then allow their customers to pay through more channels.
Customers can choose to pay with echecks when they have maxed out credit cards or don’t have other forms of payment. An echeck is essentially a digital check that allows people to pay faster. The process is automated which reduces errors.
An echeck is considered far better than traditional cards or checks. Payment providers allow businesses to receive payment from customers across the world through multiple channels.
Businesses can use telephone calls and mails to accept echeck payment through a virtual terminal offered by the payment provider. The fully automated system reduces the risk of fraud and chargebacks as well.
These features could be the reason why more than a third of companies in America now accept echecks. Automated payment solutions are clearly the way forward. A recent update to the ACH network allowed for same day ACH payments as well.
Global ecommerce companies should consider updating their payment system to accommodate newer customers. A lack of convenience could be the reason why your business is losing a chunk of the market.
Echecks give you a faster and more secure payment solution as well as a a competitive edge as the market matures. Automated payments and echecks are your ticket to boosting your sales. .
Have you considered accepting echecks for your online store?
Contact our team today to learn more.