Cross-border e-commerce sales are expected to continue growing this year as a direct consequence of the pandemic, and the unstoppable acceleration of digitization, that have eased consumers’ confidence with overseas online transactions. During Covid-19 lockdowns, for instance, 30% of consumers in Germany, Belgium and the Netherlands made more online purchases from international retailers than they used to do in the past.
A recent report by PYMNTS revealed that cross-border e-commerce sales will hit 1.2 trillion USD this year, with European countries expected to account for more than 28% (340 billion USD) of the total cross-border sales spending.
According to the report, retailers will have to take in serious consideration foreign exchange rates when expanding their operations into international markets.
On one hand, larger organizations often have the tools to protect themselves against the constantly fluctuating exchange rates, as well as to delimit foreign exchange risks that impact cross-border revenue. On the other hand, SMEs with fewer resources can’t help but lean on external partners to overcome these challenges.
Cryptocurrency is a possible solution to the problem, as its value remains the same across countries, even if its usage is not that mainstream yet.
Analysts predict that the digital currency will make up a significant portion of cross-border payments in the future, with nearly 45% of global consumers using it for cross-border payments within the next two years (2022-23), up from the less than 10% of customers who currently use it.