How Low Value Transactions Across Borders are Changing Payments

While the revolution in information and communication technology, the emergence of China as a global manufacturing exporter, and the expansion of global value chains in the 1980s started a new phase of globalisation, the relatively recent rise in e-commerce and direct-to-customer sales, facilitated by online retail platforms, is leading to a new feature of international trade, namely an increase in the number of low-value transactions.

A paper published by two Spanish academics, using Spanish data, shows that the share of low-value transactions in the total number of transactions increased from 9% to 61% in exports and from 14% to 54% in imports between 1997 and 2023.

Why has there been a change?

The increase in low value transactions is related to the rise in e-commerce and direct-to-customer sales facilitated by the development of online retail platforms, which have reduced barriers to finding and evaluating potential foreign consumers or suppliers and facilitated logistics and international payments.