At a time when cross-border sales are increasingly being targeted as a key growth opportunity for online merchants, new cart abandonment statistics show that expanding into Asia’s fast-growing economies is no easy task.

Even so, for businesses that do decide to make the leap, the inclusion of just one factor — the use of localized payments — is proving to be perhaps the single-largest determinant between success and failure for Western businesses looking to expand in the East.

Exploring the issue, PYMNTS surveyed 500 business leaders in the United States, the United Kingdom and Canada for the study “The Emerging APAC Opportunity,” a PYMNTS and Citcon collaboration. The results showed that while shipping costs remain a primary reason why consumers bail on these purchases, payments friction is right behind, turning off potential buyers and causing alarming levels of cart abandonment.

According to the report, 41% of merchants that do not offer localized payment options for their customers in Asia lost 60% or more of their sales to cart abandonment. Add in other pain points, and roughly one-third of merchants said shoppers abandon their carts because of unexpected payment frictions, such as not being able to pay for a purchase using their preferred payment method or due to feelings of concern about security arising from unfamiliar payment methods and sites.

The findings are noteworthy as the research found that 17% of merchants in the U.S. and 16% of those in Canada not yet operating in the Asia-Pacific (APAC) region are planning to make the move over the next year, and would therefore be wise to consider the pros and cons of not localizing payments for APAC shoppers.

U.K. companies are better represented in the APAC region with 31% already selling there, with U.K. merchants in the study generating 13% of their revenue from cross-border sales originating in the APAC region on average. For these merchants, cart abandonment cuts into established revenue streams and makes payments localization even more urgent.

Failing to provide shoppers in APAC with localized payments, such as Rakuten in Japan, WeChat Pay and Alipay in China and Kakao Pay in South Korea, for example, is costing merchants and sellers, with PYMNTS research finding that cart abandonment is 32% higher for merchants not offering localized payments in a region primed for eCommerce growth.

“Forty-one percent of merchants that do not offer localized payments options for APAC shoppers lose 60% or more of their sales to cart abandonment,” the study found. “Among merchants that do offer localized payments options for APAC shoppers, just 32% report losing 60% or more of their sales to cart abandonment.”

Partnering for Higher APAC Conversions

eCommerce firms in the U.S., the U.K. and Canada are starting to understand the power of payments localization and the benefits it brings. Many are partnering accordingly.

In addition to local methods being preferred by APAC shoppers — something PYMNTS also find when researching other emerging markets from Europe, the Middle East and Africa (EMEA) to Latin America — there are clear benefits when processing payments through platforms that have expertise with localized payments.

“Reliability, high authorization rates and reputation can also influence merchants’ payment provider choices,” the study stated, noting that 49% of merchants “cite reliable payment processing as a factor driving their choice in payment provider, for example, while 46% cite high authorization rates and 43% cite a solid reputation. All three of these factors take heightened importance for firms looking to expand their APAC presences.”

For these reasons, PYMNTS found more merchants choosing payments partners that support localization with gateway integrations that enable local payments choice at checkout.

The data showed that over half (55%) of merchants selling to APAC consumers select their payment providers based on the range of payment methods they offer, with 62% seeking providers that offer reliable payment processing services in the region.

See also: CITCON CEO Sees Stronger Companies Forged in Troubled Times

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Payments FinTech Bolt Financial and crypto startup Wyre Payments are remaining business partners but have decided to scrap the $1.5 billion merger plans announced in April. 

“Bolt remains a strong believer in crypto and a supporter of Wyre,” Bolt CEO Maju Kuruvilla said in an email to PYMNTS. “We will continue our existing commercial partnership with Wyre to pave the path of crypto integration into our ecosystem, bringing Wyre’s innovative crypto infrastructure to the world.”

See also: Bolt to Purchase Crypto Startup Wyre for $1.5B

The deal was originally expected to finalize before the year closed, PYMNTS reported April 7. Bolt was to integrate Wyre’s tech stack and in develop its application programming interface (API) offering, and Bolt’s shoppers would also gain access to several cryptocurrencies, fiat exchanges and compliance solutions. 

While the deal isn’t moving forward, Bolt and Wyre have mutually agreed to continue their partnership as independent businesses with the goal of bringing more innovation to eCommerce and crypto. Remaining as independent organizations allows both companies to focus on their core competencies, according to the statement sent to PYMNTS.

Read more: Bolt Helps Revolve Offer One-Click Checkout at Fashion Week

“Wyre is enthusiastic about continuing its collaboration with Bolt,” said Wyre CEO Ioannis Giannaros. “We’ve already begun integrating Bolt’s technology to help bring 1-click crypto to millions of users within the crypto space. There is so much more innovation ahead.” 

Wyre, a portfolio company of Ether Capital Corporation, will enter into a commercial agreement with Bolt to implement Wyre’s one-click solution for the Bolt customer platform, according to a Monday (Sept. 12) press release.

Ether Capital holds a minority equity interest in Wyre and said it plans to assess the fair market value as part of its third-quarter financial statements. Wyre is considered a non-core, portfolio investment by Ether Capital, per the release.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.

SANTA CLARA, Calif.–(BUSINESS WIRE)–Citcon Inc., the leading payment provider enabling global commerce at scale, today reported results of a new global survey of 500 leading merchants in the United States, Canada and the United Kingdom revealing the opportunities and challenges of conducting eCommerce in the Asia-Pacific region (APAC). The Emerging APAC Opportunity, developed in collaboration with PYMNTS, reveals that while more than 50% of all APAC eCommerce purchases are abandoned before checkout, merchants agree that accepting local payment options at checkout could reduce that number by half.

APAC countries currently account for nearly three-quarters of total global retail growth, and about two-thirds of online growth. From 2014 to 2019, the compound annual growth rate for APAC retail sales was more than quadruple that of the rest of the world, and online sales growth nearly doubled the rest of the world’s¹. The Emerging APAC Opportunity report underscores the merchant perspective concerning this potential market growth.

• 70% of all merchants surveyed expect APAC sales to increase over the course of the next three years.

• 37% of all merchants anticipate their sales growth to reach or exceed 50%

Still, according to the report, more than half of all eCommerce carts in APAC are currently abandoned prior to purchase, inhibiting this growth potential. Merchants already operating in APAC identified the two primary factors underlying high cart abandonment rates as cost-related factors (60%) and payment friction (47%). While cost factors such as shipping and competitive pricing may often be out of a merchant’s control, reducing payment friction is highly addressable.

• 47% of merchants currently selling to APAC customers believe shoppers abandon their carts because they cannot use their preferred payment method or because they have payment security concerns

• Only 13% of merchants currently selling to APAC customers accept domestic global wallets

• The small minority of merchants that currently offer localized payment options report cart abandonment rates 32% lower than their counterparts that do not

“Merchants recognize the mission-critical role local payments will play in their success in Asia-Pacific markets,” explains Chuck Huang, Founder and CEO of Citcon. “Seventy percent of the global merchants we surveyed predicted that cart abandonment rates could be reduced by half just by offering trusted, local payment schemes to consumers. Expanding payment options to better serve local APAC consumers has the potential to unlock exponential growth for merchants of all types.”

About The Emerging APAC Opportunity Report

The Emerging APAC Opportunity Report was developed by Citcon in collaboration with PYMNTS.com. Findings are based on survey responses from 500 business leaders from global merchants in the United States (350), Canada (50) and the United Kingdom (100) gathered between May 16 and June 28, 2022. Thirty-six percent of firms generated annual revenues of less than $20 million, 35% generated between $20 million and $100 million, and 29% generated more than $100 million in annual revenue. Survey results were tabulated by PYMNTS.com analysts. To access the full report and data tables, please visit: https://www.pymnts.com/study/emerging-apac-opportunity-shopping-ecommerce-local-payments-cart-abandonment

About Citcon

Founded in 2015, Citcon’s fintech platform enables seamless global commerce at scale by connecting the world’s businesses with more than 150+ mobile wallets, including local and alternative payment methods. Citcon integrates with POS and ecommerce systems such as Toshiba, Oracle, Cegid, Shopify and SAP and is currently deployed at more than 30,000 merchant sites and locations, including major brands such as L’Oreal, Tumi, Texas Instruments, Revolve, Macy’s, and Panda Express. In October 2021, Citcon closed a $30MM Series C funding round. The company is backed by leading global investors Norwest Venture Partners, Cota Capital, Sierra Ventures, Sonae, and East-West Bank. Citcon has five regional offices in the US, Canada, Europe, and Asia to service its global clientele. Learn more at https://www.citcon.com.

About PYMNTS

PYMNTS.com is where the best minds and the best content meet on the web to learn about “What’s Next” in payments and commerce. Our interactive platform is reinventing the way companies in payments share relevant information about the initiatives that make news and shape the future of this dynamic sector. Our data and analytics team includes economists, data scientists and industry analysts who work with companies to measure and quantify the innovations at the cutting edge of this new world.