Over the course of the pandemic, many businesses have had to move at least some of their operations online. While this has been challenging for many businesses, others have embraced e-commerce wholeheartedly and it now forms a major part of many businesses’ strategies going forward.
E-commerce sales rose to $26.7trillion in 2020 and made up 19% of all retail transactions, up from 16% in 2019. The UN described this as a ‘dramatic increase’, and one that is unlikely to reverse as we move forward into the post-COVID landscape. With Brexit giving rise to many new trade deals with countries around the world, the future of e-commerce for British businesses looks particularly bright if they can take advantage of these new opportunities.
Businesses will often make use of a platform in order to facilitate their e-commerce operations. Currently, popular platforms include Amazon, eBay, and Alibaba, which show products as part of a larger selection, meaning your business's products may show up alongside other businesses or those of the platform itself. However, platforms that are more oriented around individual stores incorporated into a business’s existing website are gaining in popularity as they allow businesses to retain more of a brand identity, allowing for brand loyalty to be fostered and the creation of return customers more likely. These include platforms like Shopify, EKM, or Square, all suited to different use cases and businesses.
However, that doesn’t mean that there haven’t been challenges in this transitory period. One common issue facing many businesses is that many of these platforms used to facilitate e-commerce are set up to operate in dollars. This means that businesses or customers based outside of the US are hung out to dry, unable to make payments, or having their upfront payments increased through poor exchange rates or being liable to bank charges for making transactions in a foreign currency.
These risks can be mitigated by partnering with an FX provider, such as Currency UK. By setting up an account with us, you can manage multiple currencies from within one account, making and receiving payments from around the world, as well as taking advantage of our competitive exchange rates. We effectively act as a middleman, receiving payments in one currency from your customers, and then paying you or your business in the currency of your choice.
This has multiple positive impacts: mitigating risk, minimising costs for your business, and, in turn, potentially reducing cost for the customer as well, allowing you to be more competitive in an increasingly crowded marketplace and expanding your customer base globally, no longer limited by currency.
If you would like to find out more about how we can support your e-commerce business with its foreign exchange requirements call us today on +44 (0) 20 7738 0777 or click here to open a business account with us.
Posted in Business Resources on May 19 2021