Earlier this year Amazon launched its approved payment service providers (PSPs) program for online sellers. This provided a new baseline for PSPs, but competition in the sector was already hotting up. Amazon is the number one cross-border ecommerce marketplace, but it’s not the only one PSPs need to support to attract online sellers – and the range of additional services they need to offer is growing.
In our recent report, Online Sellers and Cross-Border Payments: The State of the Industry in a Changing Ecommerce Landscape, we spoke to the CEOs of four leading PSPs to find out how the industry is evolving, and it’s clear that the needs of sellers are becoming increasingly complex.
While all merchants who sell cross-border need to be able to get paid in their local currency in a timely and reliable manner, many PSPs are now offering a much broader platform of services to help merchants grow their businesses – with credit-based products, especially in China, being critical.
Taxes are also becoming an increasing challenge, particularly for those who sell into Europe and so are now subject to VAT. Regional marketing expenses such as advertising to customers on select social media platforms are also a concern, which many PSPs help resolve through multicurrency accounts.
These value-added services are become core and moving competition away low-cost FX. Instead, they’re providing a more diverse range of revenue opportunities that have shifted from a race to the bottom to a more nuanced competitive approach.