EXPERT ADVICE

Cultivating E-Commerce Trust Across the Globe

Online retailers considering selling their goods overseas need to know the expectations of consumers in the countries in which they want to do business. This is particularly important at the checkout — with payment methods becoming an increasingly sensitive issue, consumer trust will help determine conversion rates.

A consumer in Germany, for example, expects to see a retailer with a German address and prices posted in euros, not U.S. dollars. In the UK, people assume an online shop will have prices in British Pounds.

Any deviation from these expectations will make a prospect hesitate, and that increases the chance of the consumer leaving the website and going elsewhere to make a purchase.

This also applies to the payment methods that customers expect at the checkout. While credit cards and PayPal are accepted and used around much of the world, there are methods of payment specific to different countries.

Domestic Payment Methods

The German consumer, for example, expects options that include credit card, debit card, and PayPal, as well as payment methods not used in the U.S., like giropay or immediate transfer. A key success factor in Germany is payment on invoice, which comes with high default risks that need to be addressed correctly.

The French predominantly use one card, the Carte Bancaire or Carte Bleue, and that option needs to be available if an online retailer wants to sell successfully in France.

If you want to do business in the Netherlands, the Dutch often use iDEAL online wire transfer, with the remaining purchases made by credit cards and PayPal, and a small number by Lastschrift.

For business in Austria, the e-payment standard (EPS) has been utilized as a popular payment method for several years now. Another regular payment option used is the Maestro SecureCode.

And the Maestro card is used by many consumers in the UK.

With regard to debit cards internationally, retailers can accept payments with Visa Electron via their normal Visa credit card agreement. Using this method, retailers can reach at least half of all debit card holders in Eastern Europe.

For the aforementioned Maestro card, known in Germany as the girocard, the situation is more complicated. This internationally popular debit card may be used only with the MasterCard SecureCode password prompt.

However, these are only used by banks in England, Austria, Spain and Germany. Because many banks in Eastern Europe do not accept this payment method, it is not a reliable option for selling in these markets, so many retailers rely on credit cards and PayPal as alternative payment methods for consumers.

Fraud Prevention

Opening your business to overseas prospects raises the potential for more sales, but it also increases the possibility for fraudulent behavior during the checkout process. The good news is that some payment methods have come a long way in preventing fraud and guaranteeing payments.

PayPal’s global seller protection service has been in place since 2010. It extends to international payments, making the method safe for use outside the U.S. When a dealer submits payment and the shipping address is verified by PayPal, PayPal’s guarantee becomes unlimited for all payments worldwide. However, seller protection does not cover products such as intangible goods, tickets or services.

Credit card companies have also made strides in this area — but only up to a point. Options like Verified by Visa and MasterCard SecureCode are widely used and accepted. However, Verified by Visa and MasterCard SecureCode only cover fraud if the unauthorized user misuses the credit card authorization within seven to 14 days. This can be a problem when delivery or lead times extend beyond 14 days, after the authorization has expired.

There are other ways to help minimize fraud and guarantee payments. One of those is to explore options with a Payment Service Provider (PSP). For example, there are some PSPs that can extend Verified by Visa and MasterCard SecureCode payment guarantees past 14 days.

If you are exploring options with PSPs, ask if they can incorporate credit card origin checks, GEO IP origin checks, device identification, and velocity checks. These will help to prevent fraud in the payment process.

Also, ensure that you will be able to block specific credit cards and account numbers.

Some PSPs have integrated various credit bureaus into their solutions and can access international credit agencies for further details that can protect retailers from fraud.

In Closing

Clearly, preventing fraud and guaranteeing payments are critical, regardless of geography or payment method. This becomes even more important when you are conducting business over borders and across oceans.

As an online retailer, making sure you have the right payment solutions in place will help to minimize your risk and enable you to transact effortlessly and with confidence.

Doris Linke is head of Computop North America, a payment service provider.

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