What 2022 holds for ecommerce retailers

Justin Smith, CIO Review Europe | Tuesday, March 15, 2022

Predictions related to e-commerce for 2022 on what retailers can look forward to during the year.

FREMONT, CA: Consumers are increasingly turning to online shopping as a result of the pandemic, owing to the ease and convenience of the shopping experience. Looking ahead to 2022, we can expect e-commerce to build on the accelerated growth seen in 2021. The need to localize payments in the face of rising interchange fees, the accelerated growth of mobile commerce and how to best leverage buy now pay later, are three key areas for merchants to consider in the coming year.

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The pandemic has brought the world closer together than ever before, but international sales will remain difficult in 2022. With inflation in fees for transactions between the UK and European Economic Area post-Brexit kicking in this fall, and a rise in interchange fees looming in the US next April, merchants globally are facing an unenviable choice to either absorb these increased costs, or pass them on to customers in the price of products or services which may deter future sales. In 2022, with cross-border sales expected to account for 20 percent of global e-commerce, the impact of higher fees will be felt throughout the business community in the form of lower authorization rates and higher costs.

While there is a common misconception about fees that it is what it is and that merchants cannot do anything to increase cross-border conversions – but there is an alternative. Sellers can avoid cross-border fees entirely by partnering with paytech providers in 2022. That is, merchants can use these payment processors to access a network of local banks in order to route transactions through banks in the same region as the cardholder. By localizing transactions in this manner, merchants will not only decrease the cross-border fees charged by card issuers, but also increase payment authorization, as banks are more likely to approve purchases made locally.

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