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The Fintech Effect: How is Payment Innovation Helping eCommerce Evolve?
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The Fintech Effect: How is Payment Innovation Helping eCommerce Evolve?

eCommerce has an increasing trend in the global economy with a share of 10% of the retail trade in the world. This rate reaches 20% in some developed countries. Considering that the number of people reaching the internet and mobile devices with access to the internet is large, it is expected that eCommerce will continue increasing its share in the total retail trade. eCommerce is a sub-industry of trade where its limits are highly dependent on financial services provided online. This industry develops over time by using new technologies, and more variety of financial services in quantity and quality enhance the limits of trade. The traditional payment methods through conventional banking systems are relatively more costly and slower as compared to online payment services even though the traditional banking provides a high level of payment security. The innovations in financial services, especially in electronic payments, make eCommerce relatively easier. There is a critical question about eCommerce, and electronic payments. Would fast development in eCommerce thanks to the innovations in electronic payment methods contribute to the development of businesses, or would it cause some difficulties for some businesses? Answering this question requires understanding trade at local and international level.

The globalization started with the free movement of the international capital originated from the developed economies. Nowadays, multinational companies can quickly access developing economies and compete with local businesses. These companies have the capacity to use high technologies in their marketing activities as well as in their productions. The multinational companies producing and selling consumption products, and even some automotive companies effectively use online marketing. These companies have their own electronic payment methods, and they also use other popular electronic payment methods. At the first sight, it is possible to expect that these strong companies could dominate the market by using their advantages.


Although multinational companies have, seemingly, an essential advantage, new communication technologies and the internet give essential opportunities to local businesses. Before 2000, any SME active in a developing country did have the opportunity to contact economic agents in other countries quickly. SMEs would hire some professionals to export their products to other countries. In other words, it was relatively more costly for them to export, and, even further, fewer SMEs in the developing countries could reach the markets where they could get higher prices for their products. The new technologies have enabled SMEs to access foreigner markets quickly in today’s world. Many SMEs have websites, and social media accounts in the 2010s, and they can contact potential customers all around the world. As compared to the time before 2000, many SMEs have language barriers, and they are overcoming this problem by hiring a worker who can speak a foreign language or getting a translation service. SMEs can access the international markets with an affordable cost of handling the language barrier. Many SMEs in the developing countries are actively involved in international trade through some online international trade platforms using electronic payment systems. These SMEs gain an important advantage against their local rivals by generating revenue in relatively more valuable foreign currencies.

There are some trade platforms allowing SMEs all around the world to be involved in international trade. These trade platforms provide safety and quickness in electronic payments and trade relations, and even go so far as to provide them with financing options. The parties involved in international trade through these trade platforms are more aggressive thanks to the payment security measures. At the same time, electronic payment services and online trade platforms make some legal procedures easier for SMEs with some consultancy services. Consequently, innovations in financial services and online payment services are expected to create a strong influence on the settings in trade and competition in local and international markets.

EXIMA is well-aware of the issues facing SMEs today, especially those looking to start trading internationally. We are here to connect you with people who can provide answers and the information you are seeking. Join our network today!

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