General

According to Huacheng Import and Export Data Observation, in recent years, cross-border e-commerce has become an important engine driving China's foreign trade development, with new models and business models constantly emerging. Independent websites have become one of the important choices for cross-border e-commerce merchants to go overseas. Especially in the context of policy fluctuations on cross-border e-commerce platforms, international tensions, continuously rising raw material procurement costs, product homogenization, and intensifying price wars, more and more Chinese cross-border e-commerce merchants have embarked on the path of independent station operation. The "Independent Station Overseas Payment Guide" released by financial technology company Airwallex on April 24th shows that independent station payment has become the top challenge faced by cross-border e-commerce merchants in overseas business.

According to Huacheng Import and Export Data Observation, the total number of independent offshore stations in China in 2022 is about 200000. And in the future, more and more platform sellers, B2B foreign trade sellers, and domestic Taobao brands will try to transform their independent website business model. The number of independent websites in China is expected to exceed 500000 by 2025. When a large number of sellers switch to independent stations, independent station payment has become the primary challenge they must face. According to a survey by Yibang Think Tank, in 2022, compared to overseas marketing, talent recruitment, warehousing and logistics, financing loans, and compliance risks, the proportion of overseas merchants who believe that independent station payment is the top challenge in overseas business reached 33%.

Airwallex believes that independent station payment, as the final step for end consumers to shop on independent stations, affects whether traffic can be smoothly converted into orders and directly affects the final revenue situation of the enterprise. When setting up payment services for overseas merchants, if they lack awareness of independent station payment, ignore its importance, and choose payment service providers not fully considered, it is easy to encounter problems such as poor payment experience and low risk control ability in the payment process. The guide points out that businesses currently face the following three major challenges in the field of independent station payments:

Firstly, the merchant team lacks professional talents who understand payment. Many merchants who have just entered the independent station track usually have their bosses, operations, or marketing managers responsible for the construction of the payment process, and have not established a dedicated payment team to be responsible for this section. For those who are better at playing with traffic and supply chain, it has become a challenge to develop payment strategies suitable for different business stages in the complex and difficult to understand independent cross-border payment knowledge system.

Second, merchants' understanding of independent station payment is one-sided and fragmentation. Although it only takes a few minutes or even tens of seconds for consumers to make payments on the site, a single order involves multiple steps such as consumer payment experience design, order risk control, bank authorization, and clearing. However, many merchants' understanding of independent station payment only stays at a certain stage and has not established a more comprehensive understanding.

The third reason is that merchants do not know how to choose suitable payment partners. The field of cross-border payment services is complex and professional, and the business modules focused on by payment service providers in the market are also different. When choosing payment partners, merchants often encounter various problems and security risks in actual operations due to the inability to identify the payment capabilities of the service provider and the lack of understanding whether the service provider has obtained relevant payment service qualifications.

In fact, an independent station order payment can be divided into multiple stages such as consumer payment, order risk control, order verification, order authorization, and payment request. In business practice, there are many factors in each stage of the payment process that directly or indirectly lead to the inability of payment orders to be successfully paid. Therefore, the guide proposes corresponding suggestions:

Introducing the perspective of consumers and creating a smooth payment experience. There are many factors that can lead consumers to abandon their purchases. According to research, 21% of users give up their purchases due to a lengthy and complex checkout experience, while 17% of users give up their purchases due to concerns about credit card theft or other security issues, and a lack of trust in the website. This requires selecting an embedded checkout page, selecting local mainstream payment methods based on the target market situation, while simplifying payment steps and improving consumer safety.

From the perspective of security inspectors, reduce fraud risks and ensure payment security. Overseas merchants need to consider risk tolerance based on their own situation, factors such as different products, cost pricing, and local consumption habits in the target market. Overseas merchants can combine the risk control plans of payment partners to create customized risk control mechanisms, ensuring effective risk control while providing a better payment experience.

Ensure card issuance authorization. At this stage, the cardholder's card information, risk control verification results, and merchant information will be sent to the cardholder (consumer)'s issuing bank, which will judge the received information and decide whether to authorize this transaction. Merchants can prioritize local acquiring rather than cross-border acquiring, and cooperate with acquiring institutions directly connected to the card deck. Huacheng Import and Export Data Observation Report.

Perform order payment settlement. The timeliness of payment requests is closely related to the efficiency of merchant fund turnover. Collaborating with acquiring banks with acquiring qualifications and direct connection to card organizations typically results in shorter settlement cycles. If merchants can cooperate with qualified acquirers, it can significantly shorten the settlement cycle, increase settlement frequency, optimize overall fund flow efficiency, optimize cash flow, and reduce financial and operational costs. In addition, after completing the payment process, merchants also need to do a good job in handling consumer transaction disputes, consumer repurchase, and other aspects.

For many merchants, it is also necessary to choose high-quality payment service providers and evaluate their quality in terms of consumer experience, risk control, payment success rate, compliance qualifications, customer service, and one-stop payment ability. Huacheng Import and Export Data Observation Report.

Airwallex believes that brand going overseas is the main way for cross-border e-commerce to break free from homogeneous competition and achieve differentiated breakthroughs. As a service facility for overseas merchants, payment can not only help brands optimize the shopping experience of end consumers, enhance brand goodwill, but also help merchants achieve order conversion and business revenue growth. At the same time, the importance of the payment process will also become more prominent with the growth of merchant business scale. Driving global business growth with payment will be a new trend for independent overseas enterprises, as reported by Huacheng Import and Export Data Observation.