Cross-border e-commerce will sink without payment diversity

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Selling to international markets is the name of the game for online merchants, which face a threat to their relevance if they can't match the distinct transaction preferences of individual markets.

While security is the top worry for consumers buying digital goods, at 74%, price and availability of payment options rounded out the top three. In May, Forrester conducted an online survey of more than 6,100 online adults ages 18 and older in 15 countries on behalf of Fiserv/First Data. The research examined the trends unfolding regarding digital services transactions and how consumers preferred to pay.

The research stresses the importance of addressing digital expectations, as 57% of respondents said a negative shopping experience at an online merchant site will cause them to cancel a digital service, whether it is streaming music or videos, ridesharing or food delivery.
Forrester estimated 74% of online purchases are digital products such as on-demand services, media subscriptions and games, digital media such as songs, movies or books, computer software, mobile apps, travel bookings, event tickets and online betting.

Younger consumers are moving away from traditional payment methods, and are more likely to use online and mobile payment methods instead of physical credit cards when obtaining digital services.

"It's crucial for retailers to understand the regional differences in preferred payment methods," the report states. "Payment offerings that may be unheard of in one country can be table stakes in another."

Different countries vary widely. Only 3% of North American consumers used online banking methods in the past year when buying digital services, while it is the third most popular payment type in India, at 49% usage. Similarly, invoice payments are the least popular payment type in North America (2%) and the U.K. (6%), but they rank only behind mobile pay as the most popular method in Germany at 38% and are nearly as popular as credit cards in Brazil at 27% versus 38%, the report stated.

Cash remains an important option. In low-income nations, 38% of consumers preferred cash payments, compared to 18% with debit card and 14% with online or mobile pay.

Consumers can use cash when placing an order online for digital goods by paying at a bank or convenience store.

Though not as prevalent, cash is not irrelevant in higher-income countries, the report said. Nearly 30% of consumers ages 18 to 23 with annual incomes of less than $40,000 have used cash in the past year for digital goods.

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