Almost 30% of the 200 UK businesses that have international growth plans within the next one-to-two years did not have the payment systems in place to properly support European customers, according to a survey conducted for Chase Paymentech by independent research company, Dynamic Markets.
Chase Paymentech Europe, a merchant acquirer and payment processor, has released results from a national survey exploring the challenges faced by UK firms in ‘Customer Not Present’ (CNP) payments.
According to the survey, Western European online retail sales are projected to grow 11% to reach GBP153bn by 2014. On a regional level, several key European countries have seen record growth above the UK’s growth of 160% over the past few years: examples include Spain at 199% and both France and Italy at 181%. This has triggered a rush of UK merchants aiming to develop new revenue streams via international expansion into lucrative European markets.
This, in turn, has lead to organizations looking to cross-border sales to build or increase their European customer base, however when questioned 79% of finance directors felt that their payment systems were not ready.
Cross-border sales require merchants to present and settle in a wide number of Methods of Payments (MOPs). These include common options such as Visa, MasterCard, Maestro, American Express and Direct Debit but also regional offerings such as ELV in Germany and iDEAL in the Netherlands.
Without the proper payment systems in place organizations are often required to work with multiple acquirers to trade in a range of markets or currencies. As well as adding administration cost and complexity, this process can also be a massive strain on IT systems and business processes.
The lack of investment was not confined to domestic organizations looking to expand. 77% of companies who already traded internationally felt that their payment systems were not set up to meet the demands of European customers. Organizations who had expanded internationally via a merger or acquisition faired even worse with 86% stating that their CNP processing was fragmented, making operating outside of the UK even more challenging and expensive.
Shane Fitzpatrick, president and managing director at Chase Paymentech Europe, said: “Having a single payment system in place which allows an organization to trade in multiple markets in a wide range of currencies is advantageous both in keeping overheads low; helping increase checkout conversion rates and providing customers with a first-class experience.
“If customers require payment in a different currency, our systems can facilitate this. Our payment service enables merchants to transact in over 130 currencies and settle in 12. Our team of dedicated relationship managers have the knowledge and expertise to consult with organizations on the most appropriate methods of payment to suit both their markets and their business plans. No matter how many markets a merchant trades in, we have the tools to support them.”