In this series, we are taking a close look at the current state of cross-border payments. In our first installment, we considered how the growth of cross-border commerce and globalization has changed payments forever. We then looked at the great strides happening in the United Kingdom. In our third post, we addressed some of the biggest challenges that hinder cross-border payments, and then we double-clicked on the trends happening in China today. In our last installment we centered on the leaps and bounds being made in Germany, and today we focus on the last geo in this six-part series, the United States of Amercia.
Back in 1984, when Bruce Springsteen’s “Born in the U.S.A.” was taking over the airwaves, trying to explain the concept of internet shopping to your average citizen would probably have sounded like a plot outline for an episode of Buck Rogers in the 25th Century.
Just 30 years later, the 75% of Americans who shop online have helped to establish the U.S. as the world’s second biggest E-Commerce economy; with $419 billion generated through B2C and Consumer-to-Consumer channels in 2013. And although the U.S. has most likely been overtaken by China for E-Commerce revenue in 2014, a long reign at the top of the country-specific charts—coupled with its key role as a tech innovator—ensures it remains right at the center of the wider E-Commerce success story.
Beyond the boundaries of the U.S., some wry observers like to poke fun over the comparatively low number of Americans who hold passports—around 40% in 2014, compared to over 70% in the United Kingdom. But when it comes to cross-border E-Commerce, U.S. shoppers show themselves to be perfectly comfortable with international forays. America is the world’s leading importer and exporter of cross-border E-Commerce goods, with the population spending over $40 billion buying products from online outlets around the globe in 2013 (mainly the UK and China).
If the stats for B2C E-Commerce in the U.S. make for impressive reading, the latest figures for the country’s B2B sector are perhaps even more eye-catching. Predictions for 2014 stated the U.S. was likely to achieve a B2B eCommerce turnover in excess of $1 trillion last year. That rapidly rising figure (almost double from 2013) shows not only that the B2B space may now be poised to fulfill its long-stated potential, but further confirms that B2B vendors are more eager than ever to make their presence felt online.
The star-spangled clamor among U.S. businesses to up their B2B game on the web generated revealing results in a 2014 survey by Forrester Consulting, which reiterates the increasingly-common consensus that “B2B companies must respond to the demands of buyers for robust and sophisticated B2C-like shopping journeys.”
Internet Penetration: 87% (280 Million)
Preferred Mobile OS: Android (51.5%)
Interestingly, the survey offers rich insights from the perspective of those aforementioned B2B buyers—69% of whom said that the ability to use integrated, instant online payment systems was preferable to purchase orders and invoices; with 40% also emphasizing back-end integration with financing and accounting systems as key features they craved. As the report goes on to succinctly state with regard to B2B merchants; “Companies are recognizing that they cannot hope to be successful in becoming robust omni-channel businesses through arcane, bolt-on E-Commerce strategies. Weaving digital capabilities into the core back-office operational systems is critical to transforming to this new way of doing business.”
These days, Bruce Springsteen remains an American institution, with nine Grammys on his mantelpiece and more stadium gigs under his belt than the average NFL player. Like “The Boss”, E-Commerce in the U.S. is brimming with vitality—and if businesses can satisfy the growing appetite for more evolved B2B outlets online, they could be poised to hit the high note analysts have always anticipated.
As you’d expect, we at Traxpay are excited to already be playing a role in fueling the rise of this increasingly vital part of the global economy.