Business Without Borders: Navigating Modern Payment Trends and Consumer Behaviors

By Pooja Sanan, Head of Sales, SEA, PayPal

Happy asian lady unpacking parcel after online shopping

The pandemic brought about a boom in e-commerce, which has permanently altered the way consumers make their purchasing decisions. The growth has been immense and has even persisted despite challenging economic times. Research firm McKinsey expects consumers to buy a broader range of goods online in the coming years, across more product categories, and channels. They are also willing to pay for new and more sophisticated logistics services.

That’s great news for merchants everywhere. This new consumer reality has opened the door for more cross-border transactions. That includes many internationally based businesses, who are targeting customers in the U.S., which is the world’s largest consumer market. In fact, for one example, 20% more Singapore-based businesses have a U.S. presence than before the pandemic according to Enterprise Singapore.

Diversifying for global consumers

The booming, modern e-commerce marketplace is global by default, and consumers expect to be able to buy from everywhere and anywhere. Setting up a business that caters to global consumers offers many benefits, including access to wider markets and better resources, resilience through diversification, and better margins through currency hedging, to name a few. But for all businesses that want to sell globally, including international businesses that hope to sell in the U.S., there are additional complications such as the challenges of currency conversion, for example.

What’s more, there are several consumer trends that are reshaping the way people buy online. Here’s what to expect:

Targeting selective consumers

online seller talking confirming orders

Higher living costs, especially for food and energy, are pressuring consumers to reconsider their family budget. Some are simply waiting for prices to come down. A 2022 study found that as many as 77% of U.S. respondents have delayed a purchase due to cost.

Even if consumers are paying closer attention to household expenses, they’re willing to splurge occasionally too. Despite inflation, 63% of consumers said they were willing to pay more for a product or service if it meant getting better customer service, according to the Buyer Experience Report by Invoca.

In short, consumers are still spending, but are more selective than ever. Given their sometimes-conflicting priorities, it’s important to give them options and make purchases as seamless and simple as possible. To convert more leads into sales, companies that are expanding into U.S. markets should offer more ways to pay, for example through loyalty rewards or local payment platforms, promotional discounts, and low-cost borrowing options such as a buy now, pay later payment plans.

For businesses like sustainable shoemaker Cariuma, which has a presence in the U.S., UK, Australia and Germany, it becomes even more crucial to streamline the complexities of cross-border payments while offering customers more choice and flexibility with how they want to pay.

Transparency is essential in building customer trust

female grocery shopping

In 2020, goods and services trade between the U.S. and Singapore surpassed US$93 billion, according to the U.S. Department of State. Clearly, American consumers are no strangers to Singapore-based merchants, giving local merchants a good chance of cracking the U.S. market. Nevertheless, these and all cross-border merchants need to build trust with American customers.

The evidence is clear that consumers everywhere want more environmentally friendly products, but they don’t always believe that business is following through on their promises. That’s why selling eco-friendly products is also an exercise in building trust. For an emerging brand like Cariuma, which prioritizes the ethical treatment of its employees and exclusively uses directly sourced certified sustainable raw materials, promoting its credentials is equally as significant as promoting its products. By upholding such high standards, Cariuma aligns with its commitment to conscious creation.

Earning trust goes beyond environmental, social, and corporate governance (ESG) commitments. As advanced digital tools like augmented reality, artificial intelligence (AI), and big data continue to grow and potentially create more points of vulnerability, shoppers need strong reassurance that security measures are keeping pace. Data breaches, hacking, and issues with data handling are still very much a concern. And with good reason: As reported by Forbes, by 2025 cybercrime is expected to cost the world economy around US$10.5 trillion annually.

Trusted payment options will be more important than ever for cross-border transactions, as consumers seek out familiar and secure payment options to ensure they not only get what they pay for but also avoid unwelcome surprises on their bank statements.


Defining the modern consumer

Consumers expect more than ever from businesses when it comes to the protection of personal data. In a 2022 KPMG survey, 92% of Americans said they were concerned about how their personal data is handled by companies. Furthermore, nearly nine out of 10 respondents said businesses should be more transparent about how they handle consumer data. And many are increasingly reluctant to share it in the first place.

It follows that the most trusted companies have a clear advantage over their competitors. Those that are transparent about their data collection are more likely to be able to collect more data to help them responsibly personalize their marketing approach.

Trust extends to payments too. The benefits of partnering with a reliable payment provider include considerations such as buyer and seller protection, round-the-clock fraud monitoring, and ease of purchase, which help to build trust and strengthen customer loyalty.

Staying ahead of consumer trends

One growing phenomenon in e-commerce is live commerce, which has become a major revenue channel on social platforms including Facebook, Instagram, TikTok, and Amazon Live, according to Statista. It could also give an edge to businesses trying to reach customers in the U.S. – live commerce is expected to triple in value by 2025 in the US.

Apart from the entertainment value it offers, live streaming accelerates sales conversion due to the time limit it imposes on customers. But to leverage this trend, businesses need to meet customer expectations by providing quick and secure payment options.

Trust, convenience, protection and efficiency are crucial elements for businesses

If international merchants – in Asia or elsewhere – want to tap into global markets or reach U.S. consumers, they must adapt to the changing times and cater to the needs and wants of their customer base. Providing a trusted platform is essential. But giving them modern payment options that meet their need for convenience and data security would be crucial in securing their continued patronage.

Moreover, the next generation of consumers fully embraces digital wallet services, and 6 in 10 Generation Z consumers say mobile devices are their preferred method of payment for digital purchases.

To thrive and succeed in the competitive global marketplace, businesses can be future-ready by staying ahead of the latest consumer trends and partnering with reliable digital payment partners that can help them to facilitate sales in the global marketplace.

Modern Enterprise

The Modern Enterprise series explores the issues and opportunities shaping today’s most successful companies. Read about innovations that change the competition, new ways of doing business that consumers have come to expect, and hear from industry leaders on their decisions and the lessons they’ve learned. Read more or sign up for the newsletter here. For more on how PayPal can help your company, visit PayPal for Enterprise  

The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision. 

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