Ranging from news articles to recent CEO interviews.
(Los Angeles, CA) June 5, 2014—Payscout, Inc. details the growing global eCommerce industry, which the company says American small and medium-sized businesses (SMBs) are failing to capitalize on due to the difficulties that lie in foreign currency processing. According to recent forecasts, worldwide business-to-consumer (B2C) eCommerce sales will increase by 20.1 percent this year to reach $1.5 trillion. This growth will be achieved “primarily from the rapidly expanding online and mobile user bases in emerging markets, increases in mobile-commerce sales, advancing shipping and payment options, and the push into new international markets by major brands.” Cleveland Brown, CEO of Payscout, Inc., says that U.S. consumers represent only one-third of total eCommerce sales; the remaining two-thirds—a total of $1 trillion—is accounted for by international consumers, whom Brown maintains American businesses are failing to capitalize on due to difficulties in successfully entering foreign markets.
The U.S. has historically dominated eCommerce sales, but beginning in 2016, China will overtake the U.S. in spending by collecting over six of every 10 dollars spent on eCommerce in Asia-Pacific, and nearly three-quarters of regional spending by 2017. In 2014, for the first time, consumers in Asia-Pacific will spend more on eCommerce purchases than those in North America, making it the largest regional eCommerce market in the world. This year alone, B2C eCommerce sales are expected to reach $525.16 billion in the region, compared with $482.63 billion in North America.
According to Brown, American businesses looking to compete with their foreign counterparts can benefit from international consumers, many of whom rank wealth by their ability to purchase American goods. But entering a foreign market requires a clear understanding of the culture, customs, economic and governmental conditions of the country, where the associated risks can dampen any potential success—particularly with regard to operational issues and complying with foreign laws and regulations, per Brown.
The difficulties of entering a foreign market is echoed in Foreclosure.com’s experience selling to the Chinese consumer:
Foreclosure.com invested a significant amount of cash and spent months building their eCommerce platform and marketing strategies to launch their services in China. But what their previous merchant service provider failed to mention was that 98 percent of Chinese consumers carry China Union Pay (CUP) cards and less than 2 percent carry Visa or MasterCard.
CUP operates within a closed-loop network, which restricts cardholders to only using their credit/debit card within the country – as a result, Foreclosure.com had nominal sales and wisely decided to pivot from their original plan.
Foreclosure.com subsequently contacted Payscout for help, whose international presence has forged a membership within the CUP network. Payscout was able to assist Foreclosure.com in salvaging their efforts and was able to sell to the Chinese market within one week.
Brown says that there are three main risks that businesses wanting to sell to international consumers need to understand:
“American SMBs that attempt to enter the market are met with an arduous process that can take inexperienced merchants years to set up properly,” said Brown. “The limitations caused by eCommerce requirements in different international markets are what led Payscout to take measures to eliminate the numerous steps necessary to accept credit card payments.”
Payscout’s turnkey approach, which Brown says is a direct result of the company’s existing relationships with overseas banks and experience in managed risk processing, helps American SMBs maintain compliance and enter global markets.
Brown believes that with an ease in eCommerce transaction processing, U.S. businesses will have access to global clients who are interested in and willing to purchase their products, allowing SMBs to capitalize on the larger eCommerce market while also expanding global distribution trends.
“There is a wealth of foreign consumers with a demand for American goods—global eCommerce holds the key to rebuilding the lagging American economy,” says Brown. Payscout helps businesses with low-cost merchant processing, allowing small to medium-sized enterprises across a multitude of industries to build relationships with clients while also being able to focus on global growth. Payscout specializes in online/eCommerce retailers, with a predominant proportion of card-not-present transactions.