Last year, consumers spent $4.2 trillion shopping online, according to eMarketer. And that figure is expected to grow at an annualized pace of 12% over the next five years, reaching $7.4 trillion. As that trend plays out, merchants (and the software and fintech companies that support them) stand to benefit greatly.

For instance, Global-e Online (GLBE -3.89%) and Riskified (RSKD -1.42%) make e-commerce more profitable by helping merchants tap into new markets and reduce fraud-related expenses. Moreover, Global-e has a market cap of just $8 billion, and Riskified is currently valued at $3 billion. For that reason, even a small investment in these stocks could make you quite a bit richer in the long run.

Here's what you should know.

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Image source: Getty Images.

1. Global-e Online

Domestic e-commerce is fairly straightforward, but expanding internationally is a complicated process. In each foreign market, businesses must address language barriers, logistical challenges, and legal requirements. Unfortunately, many sellers simply don't have the resources to do that. But Global-e can help.

Its platform optimizes digital storefronts for international buyers, localizing the language, pricing, and payment options. Global-e also provides fulfillment services through a network of third-party shipping carriers, and it helps merchants calculate import taxes, manage returns, and provide customer service across 200 end markets. In doing so, Global-e simplifies cross-border commerce and boosts international sales for its merchants (often by more than 60%).

To reinforce that benefit, Global-e leans on artificial intelligence to analyze transaction and engagement data, surfacing insights on a market-by-market basis. So each time someone visits a website powered by Global-e, the company's AI models get a little smarter, creating more value for the merchants on its platform.

In the third quarter, Global-e handled $352 million in gross merchandise value (GMV), up 86% from the prior year. Revenue rose 77% to $59 million, and the company generated positive free cash flow of $5 million in the quarter, meaning it's no longer burning cash.

Going forward, shareholders have good reason to be excited. Global-e has an exclusive partnership with Shopify (SHOP -2.62%), and the integration went live in September. That means Shopify's 1.7 million merchants can now link up with Global-e, potentially supercharging its businesses. For context, Global-e had just 522 merchants on its platform as of June 30, 2021. So this partnership could be a game changer.

More broadly, Forrester Research (FORR -3.16%) values the cross-border e-commerce market at $736 billion by 2023. And on an annualized basis, Global-e's GMV accounts for less than 1% of that figure, leaving a tremendous runway for future growth. That's why this stock could make you richer in the years ahead.

2. Riskified

Legacy fraud prevention platforms tend to be slow and inaccurate, often rejecting legitimate transactions or accepting illegitimate ones. In both cases the merchant suffers, either by either losing revenue or incurring expenses like chargebacks. That's where Riskified can help.

The company relies on machine learning to predict and prevent fraud. Specifically, its platform captures hundreds of data points per transaction, then measures those variables against previous payment events. That allows Riskified to generate approval (or denial) decisions in real time with 99.8% accuracy. In turn, the average business sees an 8% uptick in revenue and a 39% decline in fraud-related expenses.

More importantly, Riskified stands behind its technology. It guarantees a minimum approval rate and accepts liability for all fraudulent transactions. That value proposition has helped the company win large sellers like Revolve Group (RVLV -4.57%) and Wayfair (W -3.74%). In fact, Riskified counts three of the top 10 online retailers among its customers.

Not surprisingly, the business is growing at a rapid clip. In the second quarter, its platform handled over 150 million transactions, which totaled $21 billion in GMV, up 55% from the prior year. Revenue climbed 47% to $55 million in the quarter, and free cash flow came in at $3.7 million through the first half of 2021.

Going forward, shareholders should look for that rapid growth to continue. On an annualized basis, Riskified's GMV represents just 2% of global e-commerce spending, meaning the company has hardly scratched the surface of its market opportunity. And as online shopping continues to gain share, effective fraud management solutions will become increasingly critical. That's why Riskified looks like a market-beating investment.