Global Payments and Fraud Prevention
Ralf Gladis, CEO, Computop
With the economy still in flux in the US, many online retailers may be looking at possibilities overseas for growing their business. It requires much more than a localized Web site, though. An e-tailer must know the payment expectations, regulations and requirements of the local markets and prospective customers.
For example, a consumer in Germany expects to see a retailer with prices posted in Euros. In the UK, people assume an online shop will have prices in British Pounds. Any divergence from these expectations will make a prospect hesitate, and that increases the chance of the consumer leaving the website and going elsewhere for his or her purchase.
This also applies to the payment methods that customers expect to see atthe checkout, because with the sensitive issue of payment, consumer trust will help influence the conversion rate. While credit cards and PayPal are accepted and used around much of the world, only offering these methods to international consumers will limit conversions. There are important payment methods specific to different countries which will be key to success.
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 US, like Giropay or Elektronisches Lastschrift Verfahren (ELV) -- Direct Debit. Also a key success factor in Germany is payment on invoice which comes with high default risks that need to be addressed correctly.
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. In the UK, the Maestro card is used by many consumers.
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 Internet payment method, with the remaining purchases made by credit cards and PayPal, and a small number by Lastschrift.
For business in Poland, consumers expect to see Prezelewy24 as a payment option. And when selling into Russia, the Qiwie-wallet is a popular payment method, as only five percent of the population has a bank account, and less have credit cards, doubting their security online. Qiwi enables accountholders to pay in cash by loading their accounts at terminals, participating ATMs or activated telephone contracts.
If you want to be successful in the wide and varied market of China, consumers expect to see Alipay, which is an online payment platform with the biggest market share in China -- currently more than 650 million registered users. Alipay accounts for more than 47 percent of all online transactions in the country.
Across the board, preventing payment-related fraud is key, regardless of geography and payment method – and is obviously important for a company conducting business from potentially the other side of the globe. The good news is that some payment methods have come a long way in preventing fraud and guaranteeing payments.
With PayPal, the global PayPal Seller Protection has been in place since 2010. It extends to international payments, making the method safe for use outside of the US. When the customer submits the 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 great 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 7-14 days.
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 you will be able to block specific credit cards and account numbers. In addition, 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.
While opening your business to overseas prospects raises the potential for more sales, it also increases the possibility for fraudulent behavior during the checkout process. Ensuring you have the right payment solutions in place will help to minimize your risk and enable you to transact effortlessly, and with confidence.