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Cross-Border Shopping Becomes Reality this Holiday Season

One of the joys of international travel is shopping, especially luxury brands not always accessible at home. Having a travel rewards card with offers and discounts can make the cross-border shopping experience even more impactful. But with the temporary slowdown of travel due to border restrictions, consumers have been missing out on that international shopping experience. And as the holidays approach, they certainly are craving the joy of giving a loved one that special overseas find.

In an effort to help issuers and retailers continue to engage with travelers who have been mostly grounded this year, Mastercard has expanded its travel rewards program beyond offers on point-of-sale transactions. The program now provides offers for ecommerce transactions for more than 35 global merchants that sell over 1,000 sought-after brands.

With the holiday season picking up steam, issuers’ gift to their cardholders this year can be the excitement of cross-border shopping for friends, family and even themselves, with the ability to redeem traditionally point-of-sale rewards from the safety and comfort of their home.

Not only does this expansion to digital cross-border shopping allow card issuers to continue engaging cardholders with at-home shopping options, it also allows issuers to expand their travel rewards programs to an online channel. And thanks to the expansion, US-based merchants can continue to engage international travelers at home. With border restrictions likely to continue beyond the holidays and into 2021, this additional channel will be an important spend and loyalty channel for both issuers and retailers.

The Ebb and Flow of Travel and Ecommerce

In 2019, US domestic travelers, as well as international visitors visiting the US, spent $107.3 billion on retail purchases, according to the US Travel Association. Shopping ranks as the top leisure activity for overseas travelers visiting the US after sightseeing and fine dining. Globally, shopping and dining are also two of most missed activities this year.

The recovery of cross-border shopping is dependent on the recovery of cross-border travel. Travel recovery may not be linear and could take time based on the broad availability of successful vaccines and the lifting of border restrictions.

Since travel remains in limbo, riding on the growth of ecommerce during the holidays is an important opportunity for issuers with cross-border rewards programs. The vast majority of shoppers (82%) say they are likely to do their holiday shopping online this year, according to a recent Mastercard consumer survey. And there’s pent-up demand to shop after being stuck at home with three in 10 people saying they plan to “revenge shop” this holiday season. Half of shoppers are planning to get themselves a gift for the holidays. Many of them will buy apparel, along with wellness products.

New Ways to Engage Travelers

Consumers’ needs and desires are changing quickly as ecommerce booms and travel remains limited. Even during a pandemic, consumers are looking for value, access and simplicity. Staying consistently relevant presents an unprecedented challenge.

Mastercard Travel Rewards’ expansion into online cross-border shopping provides new ways of answering these three vital consumer needs. Value comes from providing cardholders sought-after savings when they make a qualifying transaction at participating merchants using their Mastercard. Cardholders also get access to desirable, marquee merchant brands – both in-person and online. And simplicity, essential after a not-so-simple year, is provided by allowing cardholders to use travel rewards as cashback.

Shopping Paris’s Champs-Elysees and New York’s 5th Avenue on the same day—and from the comfort of home—brings a new twist to cross-border shopping. Issuers can now deliver all of the excitement associated with the cross-border travel and spend experience to cardholders with uninterrupted access to offers at luxury merchants from the safety of their homes and seamless, differentiated rewards with no hidden fees.

Mastercard’s recent platform enhancements are giving issuers access to analytics and better insight about the merchants cardholders are buying from – a big step up from just seeing basic transaction data. The enhancements also give cardholders more flexibility in how they receive offers.

Clearly this will be a holiday season like no other. But with the right strategy and offers, issuers and retailers can stay relevant and engage consumers during this unprecedented holiday season.

Learn more about how Mastercard is expanding its rewards programs to help issuers engage with today’s consumer.

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