Recently ThePaypers published an exclusive statement of Markus Rinderer, CEO of PAY.ON AG, regarding the challenges of cross-border e-commerce as well as the opportunities and instruments for payment service providers which support such European wide acting clients. Following our comment:
The top guarantor for high conversion rates is to meet consumers’ expectations at their best. Regarding payments this means a customer-friendly payment page as well as the unrestricted availability of all well-known domestic payment methods. This is especially true for cross-border e-commerce. The best practice to meet the payment method challenge is that payment service providers support each shop with a simple and flexible global payment solution from a single source. That´s exactly what our PayPiperouting gateway offers. It contains several hundred of payments providers including nearly all schemes worldwide – directly available and ready to be connected to. This way, merchants also meet the requirements of their foreign customers simply and swiftly over only one single API.
Besides availability, payment service providers have to select the right payment partners to accelerate cross-border sales for their merchants. This relates to the schemes but also to the infrastructure providers as acquirers. The experience shows that it is necessary to integrate also local acquirers, even if the used acquirer has got a cross-border license for e.g. Europe. Contrary to the general knowledge VISA co-branded debit cards are not processed European wide by one single acquirer in the way you would necessarily expect it. Local acquirers offer here a better support for many reasons: the acceptance of local debit cards is fully guaranteed which leads again to higher conversion rates and payment service providers can directly take advantage of lower transaction rates offered by the local acquirers. In general, you can use one single acquirer for European wide business, nevertheless you have to expect significantly lower conversion rates and higher transaction rates in countries with a high debit card penetration such as France or Spain.
The third aspect that needs to be taken into account for more success in cross-border e-commerce is the right selection and adjustment of risk checks – in order to effectively prevent fraud as well as to positively influence the conversion rate. The bad news is that there is no master plan, every country has its own risk and conversion rate challenge. The selection of best matching checks is mostly sophisticated. Additionally, the analysis of promising risk checks to evaluate the final settings requires first of all integration and then time. Here, our PSP platform-as-a-service PaySourcingoffers market participants a quite easy way to put this into practice. Besides all other advantages, it contains more than 120 fully integrated, internal risk checks including highly specialized external risk management providers such as Schufa, ThreatMetrix or ReD Shield. Due to the bandwidth and granular adjustability, the risk level can be controlled on a per dealer basis in line with requirements. In this vein, the solution also provides real-time evaluation, blacklists, scoring models, as well as all verification methods such as address and credit status checks.