Payments are one of the most important areas for any ecommerce company. Not only because it has to do with buyer confidence, but also because it is one of the areas that contributes substantially to the customer experience. This, especially in the case of online payments, must be secure (first and foremost), must cover the currency of the country in which the buyer is buying and offer several payment systems, at least the most popular in that particular country, so that the buyer can choose his or her favourite. Finally, for there to be a positive customer experience, payment must be made in as few clicks as possible. An international payment system tailored to the customer – be it French, Italian or Spanish – is one of the keys to more and more conversions.
Customer experience aside, however, it is also crucial to know where the ePayment world is heading: where we are at the moment and what the future trends are. But also what level of protection we can provide to acquirers. We spoke to Peter Keegan, Operations Manager at Go Global Ecommerce.
What are the most commonly used online payment methods?
In general, the most popular ecommerce payment methods are credit cards and PayPal. In fact, from our observation, we see that month after month these two methods combined account for 90% of sales, while individually they are worth 50% and 40% of all transactions respectively. With the increase in payment methods offering more local choices and instalment options, this split is slowly changing.
What are the new trends in online payment methods?
The new trends in online payment methods are undoubtedly local methods, i.e. different from country to country. Many of these are instalment payments, while others are direct bank payments. We are seeing a growing demand for this method because it allows customers to spread the price of expensive items over a longer period of time, which increases conversions as buyers are more inclined to complete their shopping carts. At the same time, the seller also benefits, receiving the full amount directly from the payment service provider in advance and not deferred over time.
What is absolutely essential for those who decide to open a cross-border ecommerce site in terms of payments?
Obviously, the first method to be included is the most basic payment method, that of payment by card. While eWallets and other methods are on the rise, the standard card payment, as we said, still brings in the most conversions. Then, the most important factors are the fees to be paid and the acceptance of the card: not only the most popular VISA and Mastercard, but also Amex, Diners, JCB etc., so you can be sure that you don’t lose sales because the buyer doesn’t support issuer ‘x’. Finally, it is also important to accept multiple currencies: displaying the price in the local currency is one thing, but accepting and authorising a payment in that particular currency is another and that is the real goal.
What are the main problems encountered when dealing with online payments?
The main problem is that the conversion is not successful. It goes without saying that if customers do not finalise the payment, then there is a problem. There can be many factors that interrupt the buying process on a site, so it is good to first ask: is your site clear enough for the customer? Does the customer feel safe entering their details to finalise the payment? Is the flow simple and fast enough for a more experienced buyer who knows what he is doing and just wants simple clicks to make the payment? Then rejection rates come into play: sometimes issuing banks simply reject the transaction, so it is good to be sure that the seller is doing their best to ensure that rejection rates are low.
What are the most common scams? How to avoid them?
With the introduction of the ACH in the EU as part of PSD2, credit card payment fraud that is not physically present is on the decline. It has not disappeared, but it is not as rampant as before. On the other hand, we have noticed a steady increase in account takeover fraud. This is more targeted at eWallets where the account is taken over by a fraudster who places several orders as quickly as possible before the appropriation is noticed with the hope that some of these transactions will make it through to the dispatch of the order.
Generally, eWallet providers are quite quick to spot these attacks, but some still get away with it. The key to avoiding these kinds of scams for online sellers is to monitor traffic: for example, a sudden increase in an area with the same user (usually with a guest checkout) using the same eWallet account but a different shipping address within the same platform should generate suspicion. Online fraudsters move fast, so after hacking the eWallet account, they generally don’t change too much data (email address, username, etc.) because they have little time before the takeover is noticed. This should make the owner of an eCommerce shop suspicious: when it comes to having items sent to the destination/delivery point, there will in fact be a discrepancy in the user’s data on the eWallet side compared to that of the online shop.
Are there any particularities regarding payments if I decide to open an ecommerce store in a different EU country from my own?
It is not so important which country you decide to open your eCommerce store in, the really relevant factor is the MOR (Merchant of Record). You could have an eShop in one country but the MOR legally registered in another country. The payment platforms will be set to the country of the MOR and this will drive the payment arrangements.
