Don’t Shy Away From European E-Commerce Customers, Partner Smartly Instead
As the U.S. continues to fight through a slow economy, Europe and the U.K. have naturally grown into quite attractive marketplaces for domestic e-commerce companies to tap into. From fashion to travel, many U.S. online retailers are starting to see between 10 percent to 20 percent of their traffic coming from European-issued payment card products. Since setting up physical branches in local EU countries is rather expensive, online retailers tend to opt for conducting their business remotely from within the U.S.
If you ask 100 online retailers what obstacles they face daily when conducting e-commerce business in each local EU country, you can pretty much be guaranteed they will unanimously cite the following: language, culture, legal, regulations and shipment/fulfillment. Yet one obstacle that tends to not make this "Top 5 List" is the problems surrounding processing foreign card payments from European and U.K. consumers.
Fraud and Costs Are On Everyone's ‘Payment Processing’ Mind
In light of the recent Target data breach, "fraud" has once again turned into the word du jour in the e-commerce arena. Now more than ever, U.S. players across the e-commerce payments chain — especially retailers and card issuers — are extremely wary to accept online card payments originating from foreign countries. Since a cure-all hasn't yet been created to completely nullify the global online fraud epidemic, Europe (and the rest of the world) isn't immune to fraudulent activity.
As such, most U.S. online retailers and card-issuing banks have put into place preventative measurements to try to reduce the amount of European-based fraudulent activity that affects their online customers. In fact, many banks will automatically decline card authorizations from certain countries.
The upside? Obviously these measures are helping to reduce online card payment fraud. The downside? By not allowing any online payments to originate from European cardholders, everyone across the online payments chain will lose out on expanding their brand/product to an extremely profitable consumer buying market.