All over the world, consumption is undergoing a major shift. Consumers no longer need to choose between local specialty goods produced within their own communities or mass produced products manufactured abroad.
Today, global shoppers are connecting with small businesses thousands of miles away to find unique and previously unattainable goods via the internet. So what has this meant for consumers when it comes time to pay the bills?
PayPal recently researched the shopping and payment habits of consumers in 22 different markets worldwide. The results show that, by an overwhelming majority, consumers prefer to pay digitally.
Seventeen of the 22 countries surveyed prefer a digital payment option over credit cards, invoicing, cash on delivery or other forms of payment when they shop from international websites. The exceptions, Brazil, Switzerland, Norway, Russia and United Arab Emirates, all gravitate towards credit cards. However, in both Norway and Switzerland, digital payments ranks a very close second.
The motivations for going digital are clear: its easy and, with the right processor, safe. Across all cross-border consumers surveyed, their primary stated reasons for choosing their method of payment were: it is a safe way to pay (54%), it offers purchase protection (49%) and it is a convenient way to pay (44%).
For American merchants looking to sell cross-border, the rise of digital payments can enable them to reach a much broader audience and boost sales in key markets.
The same PayPal research found that the United States top export markets are China (accounting for 33 percent of the export market), Canada (11%), Brazil, Mexico, Russia and the UK (7% each). Of these markets, four of them prefer digital payments, Brazil and Russia being the exceptions.
In fact, in both Canada and China, nearly two thirds (65% and 62% respectively) of international shoppers report having purchased something via a digital payment processor in the last twelve months. For Mexico and the UK, that number leaps to three quarters of cross-border consumers (73% and 74%).
Its a new era for shoppers and merchants alikethe opening of borders for easier purchasing between countries is a crucial development, opening new sales opportunities for large and small businesses. And merchants offering digital payment options may have a distinct advantage competition.
Melissa OMalley is director of Global Merchant and Cross Border Trade Initiatives at PayPal.