By Sam Coyne, CEO – Europe, Currenxie
The modern business landscape is complicated, especially for ambitious SME retailers and e-commerce brands looking to expand internationally.
They’re under increasing pressure to stay on top of the latest trends while keeping pace with competitors and achieving long-term growth. SMEs working across the e-commerce sector have several major challenges to juggle but these also present strong opportunities they can leverage to fuel growth.
Platform fees squeeze and rising ad costs
E-commerce businesses are also facing operational pressures – including rising costs on online marketplaces. Amazon merchants, for example, now typically face aggregated fees of 30-40% of product revenue – for many, the situation has reached such a critical point that nearly half (47%) of these merchants admit that rising platform fees are the biggest threat they face to survival.
Similarly, these businesses are typically facing rising Customer Acquisition Costs (CAC) driven by a perfect storm of factors which leads to digital ad spend yielding fewer conversions and poorer value for money. Lower ROI on ad spend on Meta or TikTok inevitably puts pressure on areas of operations, whether that’s margins or paying international suppliers.
Merchants need to protect margins and slash foreign exchange fees on not only platform fees but also customer transactions.
Leveraging AI to gain a competitive edge
E-commerce businesses are increasingly using AI to optimize operations including overhauling inventory, logistics, supply chain and fulfillment processes.As agentic commerce accelerates, AI-led innovation can further streamline operations or unlock access to new customers.
With retail giants like John Lewis and JD Sports making a major play into AI-powered shopping, a survey by Commerce and PayPal reveals two-thirds (64%) of UK consumers now expect to be able to use agentic AI to curate their journey and find the best deals. Merchants unable to adjust to this shift in consumer behaviour risk hamstringing sales and restricting growth.
Agentic commerce is also ripping up the old Search Engine Optimization (SEO) playbook which is transforming how retailers need to operate. As consumers increasingly abandon manual keyword searches and adoption of conversational AI tools and autonomous shopping bots rises, e-commerce businesses must adapt or die.
Research from Klaviyo shows that eight in ten (78%) of consumers had used AI for shopping or product research in the past three months. Transparent pricing and strongly demonstrating trust – whether positive reviews or status as a trusted seller – will be critical for brands to stand out and drive sales.
Supply chain disruption piling pressure on e-commerce
Supply chain management is also evolving with e-commerce businesses increasingly moving from just-in-time to just-in-case strategies that mitigate the risk of supply chain disruption and position them more strongly for growth.
In recent months, global supply chains have been severely disrupted by ongoing global geopolitical pressures. The war in Iran has crippled one of the world’s most critical routes and thrown markets into disarray whilst the ongoing war in Ukraine is similarly hurting the global economy given the reliance of energy and food production on these markets.
Businesses are increasingly seeking access to customers and suppliers in new markets as they attempt to reduce operational risks.
Currenxie’s 2026 survey of UK businesses operating internationally reveals a quarter (25%) see increased supply chain costs as their biggest challenge over the coming year. Retailers and e-commerce businesses are particularly impacted by supply chain volatility due to thin profit margins, complex fulfilment expectations, and dependence on spending behaviour shaped by inflationary pressures.
Worryingly, a third (31%) of businesses are passing rising costs on to customers, potentially damaging the prospect of healthy, long-term relationships. For e-commerce businesses competing globally, this can curb sales and strangle growth.
Scaling beyond borders
In response to these mounting pressures, businesses are turning their attention to new markets to unlock additional avenues of growth. Expansion offers access to larger customer bases, improved profitability, and the benefits of working with new suppliers to diversify risk.
According to our research, a third (33%) of businesses have diversified supply chains to mitigate the risk from geopolitical events, with nearly a quarter (23%) saying moving into new markets is their biggest current priority.
Given concerns about global trade disruption, half (50%) of businesses are already using more international suppliers than they were 12 months ago, while 57% say their proportion of international customers has increased. Nine in ten (91%) say this international expansion has boosted profits.
Rewiring cross-border payments to unlock future growth
New markets offer new opportunities – but only if businesses have the right payments infrastructure and cross-border capabilities in place. International expansion brings its own challenges, such as the cost and complexity of cross-border payments, which can provide barriers which diminish the attractiveness of expansion.
With e-commerce companies increasing their cross-border transactions, it’s crucial that payments are cost-effective, fast, and reliable. Many rely on mainstream banks for these transfers but face high fees and a lack of reliability when it comes to paying international suppliers and processing transactions with overseas customers.
For businesses – especially SMEs – with already sensitive margins, additional foreign exchange (FX) fees are a critical challenge that need to be either absorbed or passed on to partners. Our research shows more than half (52%) of businesses feel slow processing times and high costs are damaging relationships with international suppliers, while 57% agree that FX costs on cross-border payments are too high and curbing growth.
The reliability of cross-border payments is also vital to cash flow management, which is the lifeblood of all SMEs but especially those in e-commerce managing inventories and other costs. Processing delays are common when using banks for international transactions. Bibby Financial Services has highlighted how FX losses and delayed cross-border transactions are reducing operational liquidity, with SMEs reporting an average loss of £71,600 as a direct result of currency and transaction frictions.
Our research found six in ten (60%) businesses think poor payment infrastructure is leading to increased cart abandonment, which is a prominent pain point in the e-commerce sector with the average cart abandonment rate standing at 70%.
It’s no surprise many businesses have little faith in the ability of their bank to support their international growth, with nearly four in ten (36%) saying their bank is unable to cater to their specific needs when it comes to processing payments or sending money internationally.
Agile specialist providers, like Currenxie, are stepping up to the plate and playing an important role in supporting SMEs operating globally. Around half of the UK’s SMEs now use fintechs for their business banking needs, with the figure up from a third five years ago and set to grow further.
Partnering with fintechs, who can offer a more personalised service, helps businesses access cost-effective, and reliable, cross-border payments solutions that reduce FX fees while streamlining transactions.
Expanding into new markets profitably requires e-commerce businesses to consider new approaches if they are to drive competitiveness and growth. By reducing the costs involved in international expansion, fintechs offer the key that unlocks growth into new markets.
