PayPal research shows strong confidence, rising AI adoption and growing reliance on social commerce among online businesses.
Irish SME businesses are increasingly building their growth strategies around international markets, with 44% of online sales now generated outside Ireland, according to new research published by PayPal.
The study, conducted in April 2026 among 200 SME owners who sell online, highlights a cohort of businesses that are expanding their reach while investing in digital tools to support that ambition.
“By leveraging digital channels, social commerce and e-commerce technology, we can see that Irish SMEs are well positioned to reach customers across the world”
A majority of firms living with international exposure expect further gains, with 80% of those already selling overseas anticipating an increase in cross-border revenue over the next year.
Confidence remains steady across the sector. Just over half of respondents, 51%, said they feel positive about their growth prospects for 2026, reflecting a generally resilient outlook despite ongoing economic and competitive pressures.
Social commerce
A clear shift is underway in how Irish SMEs engage with customers online. Social media has become a key commercial channel rather than simply a marketing tool.
The research found that 78% of business owners now use social platforms to drive sales. More than half, 56%, believe social commerce is more effective than traditional ecommerce platforms, and 21% expect it to be the primary driver of growth over the coming year.
Instagram and YouTube lead as the most widely used shopping platforms, each cited by 52% of respondents. Facebook Shops follows closely at 51%, while TikTok Shops is used by 34% of SMEs.
This growing dependence on social channels reflects a broader move towards more direct, content-driven customer engagement, where discovery and purchase often happen in the same environment.
AI adoption
Technology is playing a crucial role in enabling this outward expansion. The survey points to widespread adoption of artificial intelligence across Irish SMEs, with 78% reporting that they are already using AI in either business operations or customer-facing processes.
Among those expanding internationally, one in four said AI tools are helping them to enter and operate in new markets more easily. Businesses are applying AI across a range of functions, including innovation, cited by 62% of respondents, financial administration at 59%, and revenue growth initiatives at 57%.
These tools are helping companies streamline processes while also supporting decision-making, particularly when navigating unfamiliar markets.
Overseas markets offer revenue and talent opportunities
For SMEs targeting international growth, the benefits extend beyond sales. Respondents identified access to higher-margin opportunities as one of the main motivators, with 25% highlighting revenue potential as a key factor.
Access to talent is another consideration, with 29% of business owners saying international expansion helps them attract skills that may not be readily available in Ireland.
These insights underline the strategic role cross-border trade is playing, both as a commercial opportunity and as a way to strengthen organisational capabilities.
Payments innovation is also shaping how SMEs operate. Mobile payment apps now account for 19% of transactions on average among surveyed businesses, making them the largest single contributor to sales by payment type.
Four in ten SMEs offer mobile payment options to customers, while 36% report strong usage of digital wallets.
The continued uptake of digital payment tools reflects changing consumer expectations around speed and convenience, particularly in online and cross-border transactions.
Businesses urged to keep evolving
Jonas Breding, General Manager for PayPal Northern Europe, said Irish SMEs are navigating a fast-changing commercial environment that presents both challenges and opportunities.
“Irish SME owners are operating in fast-moving and competitive environments,” he said. “From AI adoption and the rise of social commerce to the introduction of new payment methods, business owners are continuously having to evolve to meet changing consumer expectations.”
He added that international sales are becoming a defining feature of success for online businesses.
“On average, SMEs who sell online are generating 44% of their sale cross-border. By leveraging digital channels, social commerce and e-commerce technology, we can see that Irish SMEs are well positioned to reach customers across the world.”
Breding said those that invest in the right tools and reduce friction in the customer journey will be best placed to succeed.
“The businesses that will thrive are those that continue to invest in the right tools, removing friction from the customer journey and fully embracing international sales opportunities.”
Image at top: Jonas Breding, General Manager Northern Europe, PayPal
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