The Deep dive: India’s cross-border payment boom

By Puja Sharma

The deep dive’ is our bi-weekly exploration of a relevant topic, hot trend, or new product. For Prime subscribers only.

How does it work?

 Avalara, Inc., a provider of tax compliance automation software for businesses of all sizes has recently published a new survey report titled – “Cross-Border Commerce and Compliance Survey” that analyzes global consumer behavior in the cross-border industry. The findings reveal that India is increasingly engaging in cross border shopping, with over 67% of respondents having made purchases from international businesses, highlighting a strong shift towards global consumerism within the country. This trend is in contrast to established markets like the US, where only 37% of consumers have made international purchases in the past year.

The report indicates that a key factor behind this trend is that over 76% of Indian consumers perceive the quality of items from international sellers as superior, driving their cross-border shopping significantly more than their consumer counterparts in the UK (27%) and the USA (35%). The report also attributed the availability of unique products not found in India as a factor as well as better quality and competitive pricing as significant reasons for their preference for cross-border shopping.

Who is under the radar?

Established eCommerce platforms lead the way in shopping preferences in India with over 61% choosing platforms such as Amazon, eBay, and Etsy for their overseas shopping needs, with strong demands for international fashion, followed by technology. This is the third highest among the surveyed countries, indicating a strong reliance on these established marketplaces. Additionally, despite the potential of direct cross-border purchases enabled through social media platforms like Facebook and Instagram, only 4.8% of Indian consumers choose this route.

However, despite India’s enthusiastic embrace of cross-border shopping, Indian consumers reported the highest incidence of customs duties coming as a surprise, with 45% describing them as “shocking”. This is a stark contrast to Australian consumers, wherein 57% of Australian shoppers reported being well-informed about customs fees, thus avoiding unpleasant surprises.

The survey also highlights payment preferences, with a significant portion of Indian consumers opting for international credit and debit cards for their cross-border transactions. However, there is a growing interest in alternative payment methods, such as digital wallets and cryptocurrencies, as consumers seek more secure and efficient payment options.

Why does it matter now?

The report emphasises the need for businesses to address consumer concerns, particularly in the Indian market, by providing transparent cost structures and competitive pricing. Additionally, understanding payment preferences and integrating secure payment solutions can enhance the cross-border shopping experience and capture this growing market segment effectively.

 Commenting on the insights, Avalara spokesperson Dulles Krishnan, VP, Go To Market said – As global cross-border commerce continues to expand, we conducted this survey to help businesses understand cross-border buying habits of consumers, identify factors impacting cart abandonment, as well as assess the role compliance plays in cross-border commerce.”

This report was conducted across India, the US, the UK, Denmark, Australia, Canada, Brazil, and Mexico with over 8,200 respondents, and aims to understand the pain points of consumers in the cross-border industry. The insights provided focus on helping businesses address these concerns, particularly in the Indian market, by emphasizing the importance of transparent cost structures and competitive pricing to maintain their appeal and effectively capture this growing segment.