13 June 2014 - Europe is a mature eCommerce market, but it keeps constantly changing and evolving. For merchants, there is still plenty of opportunity for growth by expanding into new European markets. However, the unique dynamics of the cross-border eCommerce market do require careful consideration and planning.
While selecting the right payment mix per country is the necessary basis, successful merchants also anticipate and act on macro-trends, such as changes in the regulatory environment, or in consumer behavior and expectations. At the same time, these merchants actively analyze and optimize their business through aggressive fraud management and the application of big data analytics. Following are some key best practices for merchants who wish to expand beyond their borders into the greater European marketplace.
Mobile First Approach
In 2014, mobile commerce has well and truly arrived in Europe. We see the use of mobile devices for online shopping and payments accelerating, with Sweden and the UK in particular matching global leaders in AsiaPac and North America in mobile shopper penetration. Merchants that have adopted the mobile first strategy in both check out and payment pages are seeing considerably higher success rates.
Big Data to monitor risks and identify opportunities
Another big trend that is further maturing in 2014 is the application of Big Data analytics and visualization to the domain of online payments. While eCommerce leaders such as Amazon have been applying Big Data for years with the objective of building sophisticated profiles of their consumers for Conversion Rate Optimization (CRO), GlobalCollect and its clients are pioneering Business Intelligence for payments specifically.
Cross-border payments can quickly become very complex and hard to manage. Huge volumes of data need to be analyzed in order to identify issues and opportunities. By applying analytics and visualization to payments data, merchants can track and compare performance per country, per payment method, or over time, and take steps to optimize processes.
Keeping Fraud Under Control
Fraud is a fact of life for merchants. This is particularly true for international merchants, because cross-border payments have significantly higher fraud rates than domestic payments. Increasingly, sophisticated fraudsters also take advantage of the shift to mobile payments, where fraud losses are higher as percentage of revenue.
But rather than accept fraud as a cost of doing cross-border business, merchants can take action to minimize its impact. In addition to improving the bottom-line, this also limits the risk of the kind of reputation damages that go hand-in-hand with online fraud.
Merchants without large in-house fraud departments are advised to engage outside support in the form of a Managed Fraud Services provider who not only provides the right fraud prevention tools but can help applying best practices in deploying these tools and advise on fraud trends to ultimately lower fraud.
The year to be SEPA-ready?
2014 is a watershed year for cross-border payments in the single euro payments area- or SEPA. The goal of SEPA is to create a harmonized payments infrastructure throughout the SEPA countries, through the use of common payment instruments and standards, supported by a common and accepted legal structure to make safe cross-border payments faster and more efficient.
Despite the standardization, implementation deadlines and accepted standards for managing consumer mandates can still vary by country. The impact of the single euro payments area is also of more significance for some payment products and payment instruments than others, so merchants are advised to seek the advice of an experienced payments specialists to ensure that SEPA payments are part of a wider and market appropriate payments strategy.
- John Snoek is Vice President, Global Marketing at GlobalCollect