Digital Transactions Authoritative, insightful and timely information for payments professionals
Even though transactions from outside North America account for anywhere from 10% to 20% of sales for Web sites that accept international business, only 59% of large and mid-sized online merchants take orders from international customers. That's the main conclusion of a recent e-commerce payment survey sponsored by CyberSource Corp., a payments gateway for Internet merchants. The reasons online merchants give in the survey for shunning the international market?despite the revenue the survey shows they might be forgoing?include, in order of importance: fear of fraud; logistics of order fulfillment; payment infrastructure; taxes; regulations governing exports; support of local payment options; currency-conversion issues; lack of demand or product fit. Fraud jitters rank number one for good reason, according to the report: Online merchants that accept orders from outside the U.S. and Canada say these transactions carry a rate of fraud that is quadruple that of North American orders. Of those e-commerce sites that do accept international sales, 91% say they take orders from the U.K. and Germany, the countries with the highest participation rate. The region with the lowest rate of participation, at 72%, is Asia outside of Japan. “The survey shows that if your company's product is appropriate for global sales, you might be passing up an enormous revenue potential [by not accepting international orders],” says Doug Schwegman, director of customer and market intelligence at CyberSource, in a statement. “Beyond product, six of the seven top concerns that are holding back merchants can be successfully automated in their online payment system.” The survey, conducted by Quality Research Associates, consisted of 147 phone interviews with officials at leading e-commerce sites. Only sites that generate $10 million or more in sales qualified for the survey. The combined revenues of the respondent companies accounted for about 10% of all online business-to-consumer sales last year.
