As more U.S. merchants go global, Amex evaluates its role
Long after e-commerce removed the biggest obstacles preventing U.S. merchants from selling internationally, there are still untapped pockets of opportunity.
To make sure its cards play a role in an increasingly global market, American Express launched its Grow Global program in 2015 to educate U.S. businesses about using payment platforms, currency conversion and other technologies to sell across borders. Three years later, it's still finding merchants that want to push the boundaries of where they can sell.
Ninety-two percent of U.S. small and middle-market businesses that do business globally see those international markets as a significant growth opportunity, according to the 2017 American Express Grow Global survey. Seven in 10 small-business exporters anticipate greater sales from international customers over the next year, while nearly 80% remain confident that revenue outside of the U.S. will increase over the next five years at a nearly 30% clip.
U.S. businesses are also finding that their e-commerce sites are starting to get bites from customers in other countries, said Ed Marsh, an independent exporting adviser to American Express and its Grow Global program.
"What has happened is that the internet flips the equation … and it has opened up this huge frontier," Marsh said. "It used to be a very heavy lift for small or medium-size businesses to export, for a lot of reasons."
Amex has staged Grow Global events in Atlanta, Chicago, Baltimore, Long Beach and Miami and says that more than 100 businesses participated in each city. Marsh works with Amex to develop the curriculum for these Grow Global events.
The concept of selling e-commerce products or services internationally is not new, as many companies, such as WorldPay or World First, have focused solely on making it easier for businesses to accept payments and convert foreign currencies.
In that regard, Amex's strategy is less about breaking new ground and more about messaging, said Eric Grover, payments industry consultant at Minden, Nev.-based Intrepid Ventures.
"From the Amex perspective, I would argue that their interest would be in pitching foreign merchants to that message," Grover said. "There are 60 million or more American consumers, many of whom are high spenders with a preferred Amex card."
If a foreign merchant accepts Amex cards on its platform, Amex could help promote the company's international intentions to its cardholder base, Grover said. "The Amex message of having this closed-loop network would resonate in some European markets, and it would be pretty strong," he added.
Looking into fiscal year 2018, 42% of respondents in the Amex survey project their annual budget for activities related to selling their products/services outside of the U.S. will be $250,000 or more.
On average, companies who sell globally invest 30% of their annual sales and marketing budgets to enter or grow their business in international regions.
Amex surveyed 501 U.S. companies, ranging in size from $250,000 to less than $1 billion in annual revenues who reported that a portion of that revenue comes from sales outside of the U.S.
Amex is working with the U.S. Department of Commerce's International Trade Administration to increase awareness of the economic benefits of trade and how exporting can lead to job creation and growth.
Amex says that a business does not have to be an Amex merchant client to benefit from the Grow Global program. There is no doubt that small businesses getting into an international market have concerns about payment acceptance, transportation and shipping costs, as well as compliance issues and security risks.
"The e-commerce piece can be a great solve for some of these issues," Marsh said. "And it can help be a great way for a business new to exporting to scale out."