The lack of visibility of taxes and customs duties, and the inability to pay them at the point of purchase is a deterrent for customers making cross-border online purchases. Enabling the payment of customs taxes, duties and handling charges at the moment of purchase greatly enhances the consumer online shopping experience. Moreover, it increases the postal operators’ competitiveness in the e-commerce market whilst also increasing the end to end speed and reliability by ensuring a smooth customs treatment and enabling a much enhanced consumer delivery experience.

How does it work?

The Postal Delivered Duties Paid service consists of several components. The first element is the Full Landed Cost Calculator, which provides a clear overview of the total cost of a cross-border e-commerce purchase after making sure that complies with the destination market’s import regulations. As the e-buyer selects a product and proceeds with the checkout on an e-seller’s website based in another country, the buyer can then indicate the country of delivery. The IPC Full Landed Cost Calculator will complete the payment overview with information that includes any additional fee or surcharge applied in the destination country, giving the shopper a clear overview of the total cost of their purchase. In one easy transaction, the consumer pays for the goods, as well as the shipping costs, the taxes and the customs duties if they wish.

The second element of the service is the Payment Platform, which enables the transaction between all stakeholders, relying on the global payment platform, PayPal. Once the shopper has paid, the Payment Platform will transfer the funds covering the price of the goods and shipping costs to the e-seller. Meanwhile, the Payment Platform transfers the funds related to the taxes, duties and surcharges to the receiving post. The receiving post will transfer the amount related to taxes and duties to the customs authorities based on their existing procedures. Consequently, the shipment will be flagged as ‘green lane’, thereby speeding up the customs clearance and delivery process.

The last element is the IPC Document Solution. This element allows consumers/merchants to upload the commercial invoice to support a seamless customs process. The necessary documents are immediately available to the inbound post, which allows them to prepare customs declarations. This element allows inbound posts to quickly request and capture crucial information for customs clearance and share it with relevant stakeholders.

E-retailers can choose between implementing the three components described above, or they can still use their bespoke arrangements for the calculation of taxes, duties and handling charges. The e-buyer and inbound Post experience remains the
same regardless of the method used by the e-retailer to implement PDDP.

Benefits

For consumers:

  • Full visibility while making a cross-border e-commerce purchase, all costs – taxes, duties and surcharges – are calculated and shown at checkout
  • Hassle-free cross-border e-commerce as one transaction covers all costs
  • Enhance delivery experience with shipments going through Customs quicker and no further notifications demanding additional payments or provision of commercial invoices.

For e-sellers:

  • Improved customer experience, thereby increasing customer retention and boosting sales
  • Fully compliant with future regulatory changes
  • Guaranteed payment for e-sellers as money will be immediately transferred from the payment platform
  • Easy API implementation, giving e-sellers and major webshop owners an easy plug-in
  • Possibility for e-retailers to continue using their bespoke arrangements as PDDP solution design is giving some freedom to choose the implementation that better suits their needs.

For posts:

  • Better response to cross-border e-commerce consumer and e-retailer expectations
  • Stronger service offering to boost competitiveness in a market where large integrators and other delivery operators are already offering similar solutions
  • PDDP solution design allows to launch the service with very limited IT work needed from the post
  • More data at hand is increasingly required by authorities (Stop Act, ICS2, etc)
  • Reduced handling and storage costs for postal operators due to the cut-down on time needed for legally required documents
    and payments from consumers.
 

More information

To find out more about IPC's Dynamic Merchant Platform, contact us via e-mail at helpdesk@ipc.be