Don’t Shy Away From European E-Commerce Customers, Partner Smartly Instead
European bank acquirers acting on behalf of U.S online merchants process online European cardholder payments locally within each country as opposed to "passing" them through to be processed in the U.S. Due to strict anti-fraud rules, the majority of these card payments would be blocked and therefore automatically declined if these payments were processed locally with a U.S. bank acquirer.
With a European bank acquirer, these payments are treated as local payments and therefore legitimate payments are automatically approved and not stopped because of their European-based IP addresses. This in turn leads to merchants being able to accept a higher amount of card payments from European-issued card payment products/consumers.
In addition, by selecting the right partners, retailers will not only increase card approval rates, but even more importantly, the right bank acquirer in a particular EU country will also ensure that proper risk management measurements are put into place to significantly reduce the amount of fraud activity coming from that particular country.
In the U.K. alone, IMRG is predicting that over £100 billion will be spent by consumers online in 2014. Imagine that record-breaking number coupled with predictions for other top European buying countries such as Germany and France — the market potential is clearly extraordinary for U.S. online retailers.
To shy away from such an opportunity would be a shame. U.S. merchants need to be smart and find the right payment partners in Europe that will help them overcome barriers to entry. When it comes to accepting European credit cards online, merchants need to partner with the right EU bank acquirers.
Rod Katzfey is the vice president of business development, North America, at Credorax, a provider of online payment processing and acquiring bank services.