Stories

Cross-border commerce has become a defining feature of the global digital economy. While the space is facing increasing challenges - from rising regulatory complexity and shifting trade policies to growing consumer expectations around transparency and sustainability - both goods and services now move more freely across borders as millions of consumers buy internationally. Small and medium-sized businesses (SMBs) increasingly participate in global trade from their very first sale, with digital platforms and payments lowering traditional barriers to entry and enabling businesses to reach customers across borders from day one.

The Changing Reality of Cross-Border Commerce

As this growth accelerates, it is also reshaping the nature of cross-border trade. High volumes of low-value e-commerce transactions are placing increasing pressure on customs systems originally designed for lower volumes and higher-value shipments. While some developments in this space have added strain to the system and highlighted areas that need reform, millions of SMBs now depend on the reach that digital commerce affords them to connect with new customers and grow internationally. At the same time, SMBs face significant challenges navigating fragmented regulatory requirements, rapidly evolving compliance obligations, and operational complexity across markets. Consumers, meanwhile, often lack predictability around total costs, delivery timelines, and clearance outcomes - undermining trust in cross-border purchasing experiences.

Before the Shipment: The Role of Payments

Addressing these challenges requires visibility and coordination at the earlier point in the transaction journey, which is where payments come in. Every cross-border shipment begins with a transaction - the moment when value is exchanged, commitments are made, and trust between buyers and sellers is established. This transaction often occurs before goods move and before other intermediaries become engaged. As a result, payments are often the first digital signal in the cross-border transaction journey, providing early confirmation of intent, value, and counterparties. This early digital verification makes payments particularly relevant for risk-based customs approaches, enabling greater transparency, helping align expectations among stakeholders, and reducing uncertainty and risk across the ecosystem.

PayPal's transaction data illustrates how these dynamics are playing out at scale. According to PayPal Global Beat*, drawing on aggregated PayPal data, nearly 500,000 UK businesses, 90,000 in Singapore, and more than 1.4 million in the US sell internationally using PayPal. In 2025 alone, PayPal processed over 320 million cross-border transactions for US businesses, 200 million for UK businesses, and 60 million for Singapore businesses. These flows connected tens of millions of consumers to merchants abroad - including 47 million shopping from US businesses, 41 million from UK businesses, and 14 million from Singapore businesses. The data highlights dispersed trade corridors across markets such as Germany, Canada, Mexico, Australia, France, Israel, and the US, driven largely by high volumes of low-value transactions that collectively represent significant trade activity.

Policy Opportunities for Digital Trade Facilitation

These patterns highlight the opportunity to broaden participation in global trade, particularly for SMBs, and point to three specific areas where payment data can support smooth trade facilitation:

1. First, exploring ways for payment providers to contribute relevant transactional insights - within appropriate legal, privacy, and governance frameworks - could support pre-clearance risk assessment and help customs authorities better distinguish compliant, low-risk e-commerce flows from higher-risk activity. 
2. Second, solutions that estimate and present duties and taxes upfront at checkout could improve cost transparency for consumers, reduce delivery-stage friction, and facilitate smoother clearance processes. 
3. Finally, developing trusted or low-risk frameworks that are accessible to SMBs - not only large enterprises - would help ensure that smaller businesses can compete on a more level playing field in global markets.

A Call for Collaboration to Support SMBs in Global Trade

PayPal is committed to being part of this solution. We value our engagement with customs authorities and the broader customs ecosystem, where we see strong alignment around enabling safe, efficient, and inclusive cross-border e-commerce. This shared commitment is reflected in our participation, for the first time, in the World Customs Organization’s Technology Conference this year, and in our continued collaboration with the WCO and national authorities to explore how payments can complement risk-based customs approaches. 

Ultimately, realizing the full potential of cross-border e-commerce will require close cooperation between policymakers, customs authorities, and the private sector. By working together to improve transparency, predictability, and trust - starting where every transaction begins, with the payment - we can ensure that SMBs are empowered to thrive in the global economy and that cross-border trade remains resilient, inclusive, and trusted.

* Find our Global Beats here:
UK: paypal.com/uk/campaign/globalbeat
SG: paypal.com/sg/campaign/globalbeat
HK: paypal.com/hk/campaign/globalbeat
DE: paypal.com/de/campaign/globalbeat
US: paypal.com/us/campaign/globalbeat