ARE YOU READY FOR CROSS-BORDER E-COMMERCE?

CONTENTS1.0 EXECUTIVE SUMMARY 2.0 INTERNATIONAL COMMERCE HAS NEVER BEEN EASIER 3.0 CROSS-BORDER E-COMMERCE OPPORTUNITIES 4.0 WE-COMMERCE TRENDS IN EUROPE

5.0 PREFERRED PAYMENT METHODS

6.0 PAYMENT FRAUD AND CONVERSION

7.0 DATA BREACHES AND COMPLIANCE 8.0 OPTIMISING CONVERSION 9.0 PAYMENT SERVICE PROVIDERS 10.0 CONCLUSION 11.0 GLOSSARY

12.0 SOURCES 13.0 ABOUT SECURE TRADING

3

4

6

7

10

12

13

14

15

16

17

18

19

3

1.0 EXECUTIVE SUMMARY

As developed e-commerce markets mature, growth is slowing. However, for many merchants there are opportunities to explore cross-border trade, providing increased revenue growth through expansion into new territories.

FOR MANY MERCHANTS

THERE ARE OPPORTUNITIES

TO BE EXPLORED IN CROSS-BORDER

TRADE, PROVIDING NEW WAYS TO

INCREASE REVENUE

While it is seemingly easy to localise an e-commerce website and launch into emerging markets, the complexities of payments can be a significant challenge for merchants. Payments fraud, alternative payments, foreign exchange fees and currency conversions, as well as localised optimisation for conversions, can all be defining factors in the success of a cross-border e-commerce strategy.

This whitepaper explores the key issues, their solutions, and advocates making payments a key criterion when exploring the business case for international e-commerce expansion.

4

2.0 INTERNATIONAL COMMERCE HAS NEVER BEEN EASIER

Technology has transformed global commerce allowing merchants to reach customers without requiring bricks and mortar stores or a network of distributors. Instead digital and physical goods are being sold online and cross-border into emerging markets, accelerated by high levels of Internet penetration and mobile phone usage.

Global e-commerce turnover grew by 24.0% to reach $1,943bn in 20141, and accounts for 2.64% of the world’s GDP. This share of GDP has grown by more than 100% since 2010, providing further evidence of the significant growth seen in the e-commerce market.

Europe ranks in second place globally with 29.2% of the e-commerce market share, and was a sector worth $567bn in 2014. Share of GDP in Europe was also comparable to the global share at 2.45%, this percentage is predicated to nearly triple by 20202.

GLOBAL E-COMMERCE TURNOVER GREW BY 24.0% TO REACH $1,943BN IN 2014

Asia - Pacific

Europe

North America

Latin America

Others (inclu. Africa)

MENA

REGION 2013 2014 GROWTH

World $1,563.8 bn $1,943.1 bn 24.0%

Asia - Pacific $533.8 bn $770.0 bn 44.3%

Europe $497.9 bn $567.0 bn 13.9%

North America $466.0 bn $522.9 bn 12.2%

Latin America $31.6 bn $37.4 bn 18.2%

MENA $17.3 bn $21.0 bn 21.5%

SEE SOURCE: 1

5

2.0 INTERNATIONAL COMMERCE HAS NEVER BEEN EASIER Continued

WHILE THESE E-COMMERCEGIANTS ENJOYMATURE DOMESTICE-COMMERCEMARKETS, THERE AREOPPORTUNITIESTO GROW

Internet penetration in Europe increased to 75.0% in 20142, with an estimated 715,000 B2C websites and an annual figure of 4.0 billion B2C parcels sent to customers domestically and cross-border in Europe.

Almost 90% of the European e-commerce market is shared by12 countries, with the UK (30.0%), Germany (16.8%), and France (13.4%) ranking in first, second and third places respectively. These three countries have dominated the sector with a combined share of approximately 60%.

While these e-commerce giants enjoy mature domestic e-commerce markets, there are opportunities to grow their cross-border share, and that of other EU states, both globally and within Europe.

United Kingdom 30%

Germany 17%

France 13%

Russia 5%

Spain 4%

Netherlands 3%

Italy 3%

Switzerland 3%

Austria 3%

Norway 3%

Sweden 2%

Denmark 2% Rest of Europe

12% United Kingdom

Germany

France

Russia

Spain

Netherlands

Italy

Switzerland

Austria

Norway

Sweden

Denmark

Rest of Europe

SEE SOURCE: 2

6

3.0 CROSS-BORDER E-COMMERCE OPPORTUNITIES

KEY DRIVERS THAT MOTIVATE EUROPEAN UNION CONSUMERS TO PURCHASE GOODS AND SERVICES FROM OTHER EU STATES INCLUDE A WIDER RANGE OF AVAILABLE PRODUCTS, AND MORE COMPETITIVE PRICES

While the overall e-commerce market is predicted to slow as it reaches maturity, not least in Western Europe, the cross-border e-commerce market is seeing significant growth.

Cross-border sales in 2014 showed that 15% of all individuals purchased goods and / or services from countries in the EU282. These are sales made in the EU outside the consumer’s country of residence.

Key drivers that motivate European Union consumers to purchase goods and services from other EU states include a wider range of available products, and more competitive prices. Small member states with more limited domestic retail opportunities (online and offline), see a larger proportion of cross-border e-commerce purchases, with consumers finding both more choice online and, even after factoring in shipping costs, a more competitive price.

The Netherlands is a good example of this, with 3.2 million cross-border buyers in 2015, spending €82 million in Germany and €77 million in the UK respectively.

Shipping costs and delivery times are also important factors that can impact on EU cross-border transactions, often a key differentiator when comparing cheaper products from China and Asia-Pacific.

Supply chain is driving cross border e-commerce in countries like Belgium where 42% of consumers buy cross border for an ‘appealing offer’. Competitive shipping costs and expedient delivery provides an opportunity to reach this growing e-commerce market of 6,920,000 e-shoppers.

Merchants may also find increased opportunities for cross-border e-commerce with member states thatshare language and cultural factors. Forexample in the DACH region; an areawith a relatively mature e-commercemarket and close regional ties.

7

As part of an international e-commerce strategy, including EU cross-border trade, merchants need to determine if they have products and services of value in alternative core markets.

Factors that must be considered from a payments perspective include the maturity of a country’s e-commerce market, currency preferences and foreign exchange rates, shipping costs and delivery times, acquiring services, fraud and security risks, and localisation of e-commerce websites and communications.

It can be useful to make a comparison between the whole of the EU e-commerce market and that of thecountry of interest. Key factors include:

1. INTERNETPENETRATION77.1% of the EU28 population has Internet access with Iceland ranking first with 96.5%. The top twelve EU28 countries in terms of Internet penetration are: Iceland (96.5%), Norway (96.1%), Netherlands (96.1%), Denmark (96%), Sweden (95.4%), Luxembourg (95%), Finland (94%), UK (92%), Switzerland (88%), Germany (86.8%), France (85.7%), and Belgium (84.7%). 2

2. ONLINE SALES OFSPECIFIC GOODSFor example 19.8% of technical consumer goods were bought online in 2014. This is of interest because this market has typically been point-of-sale oriented, with consumers availing themselves of support and guidance from in store sales teams. Commentators predict that this trend towards more online sales will continue to increase.

Looking at the rate of online sales in EU28 countries, Eastern European regions and the UK see the highest rates with 39.5% of technical consumer goods were sold online in the Czech Republic: followed by Slovakia (29.3%); UK (28%), and Ukraine (26%). Germany (25.4%) and the Netherlands (24.4%) also rate amongst the countries with a higher rate of online purchases for technical consumer goods. 2

FACTORS THAT MUST BE CONSIDERED FROM A PAYMENTS PERSPECTIVE INCLUDE THE MATURITY OF A COUNTRY’S E-COMMERCEMARKET, CURRENCYPREFERENCESAND FOREIGNEXCHANGE RATES

4. E-COMMERCE TRENDSIN EUROPE

COUNTRY INTERNET PENETRATION

Iceland 96.5%

Norway 96.1%

Netherlands 96.1%

Denmark 96%

Sweden 95.4%

Luxembourg 95%

Finland 94%

UK 92%

Switzerland 88%

Germany 86.8%

France 85.7%

Belgium 84.7%

COUNTRY SALES

Slovakia 29.3%

UK 28%

Ukraine 26%

Germany 25.4%

Netherlands 24.4%

THE TOP TWELVE EU28 COUNTRIES IN TERMS OF INTERNET PENETRATION

HIGHEST ONLINE SALES FOR TECHNICAL CONSUMER GOODS RATES IN THE EU28

SEE SOURCE: 2

8

WHILE PEOPLE IN ADVANCED ECONOMIES USE THE INTERNET MORE AND ALSO PURCHASE MORE TECHNOLOGY, THERE HAS BEEN A RISE IN THE NUMBER OF PEOPLE IN DEVELOPING COUNTRIES OWNING A SMARTPHONE

4. E-COMMERCE TRENDSIN EUROPE Continued

3. SMARTPHONEPENETRATIONIt is predicated that by 2017 69.4% of Internet users worldwide will access the web through a mobile device.3 However many countries are already exceeding this. The top twelve countries globally in terms of smartphone penetration are; Korea (89%), Australia (77%), Israel (74%), US (72%), Spain (71%), New Zealand (70%), UK (68%), Canada (67%), Chile (65%), Malaysia (65%), Germany (60%) and Italy (60%).4

While people in advanced economies use the Internet more and also purchase more technology, there has been a rise in the number of people in developing countries owning a smartphone and accessing the Internet. In a survey from Pew Research Center, 54% of emerging and developing countries surveyed (a group 21 countries including emerging economies like Malaysia and Chile) reported using the Internet and owning a smartphone.4

4. M-COMMERCE25% of online spending in Europe is on a mobile device.5 However developing countries are also seeing growth. Lack of infrastructure for traditional broadband solutions means that smartphone usage is on the rise, jumping from 21% in 2013 to 37% in 2015.5 Alternative payments are facilitating this with mobile wallet solutions such as M-Pesa, Orange Money and Airtel Money transforming financial services across the Africa and Asia.

Local knowledge is essential for international expansion, and organisations such as Ecommerce Europe – that lobby for legislature change to facilitate EU cross-border trade - can provide essential information for merchants exploring specific regions.

When deciding which countries to target merchants should identify a basic criterion for determining the viability of each opportunity. This could include factors such as the ease of doing business (including language, currency and culture), the size of the e-commerce market and potential for growth, and the logistics of taking payments and shipping goods.

The following are a few examples of regional differences that may prohibit or encourage cross-border e-commerce:

Belgium: with 85% Internet penetration and 21% growth in m-commerce in 20142, Belgium has seen growth in cross-border sales from neighbouring countries; Netherlands, Germany and France.

COUNTRY MOBILE PENETRATION

Korea 89%

Australia 77%

Israel 74%

US 72%

Spain 71%

New Zealand 70%

UK 68%

Canada 67%

Chile 65%

Milaysia 65%

Germany 60%

Italy 60%

TOP TWELVE COUNTRIES THAT HAVE THE HIGHEST MOBILE PENETRATION

SEE SOURCE: 4

9

STRATEGIC PARTNERSHIPS WITH GLOBAL COMPANIES AND THE PRESSURING GROWTH OF THE RUSSIAN E-COMMERCE MARKET IS EXPECTED TO PROPEL THE MIR CARD TO PROMINENCE BOTH AT HOME AND ABROAD

4. E-COMMERCE TRENDSIN EUROPE Continued

However, merchants in other EU states should factor in Belgium’s unique demographic that divides the country in two - Flanders and Wallonia – that means Belgium should be viewed as two markets each with their own language and culture.

Austria: 40% of Austrian e-commerce consumers bought goods or services from other countries, and has some of the biggest spenders in Europe (€2,36

1 per e-commerce consumer in 2014). German e-commerce merchants do particularly well in Austria with a shared language and many cultural similarities.

Russia: There is real growth potential in the Russian e-commerce market as Internet penetration is considerably lower than the European average, at 59.2%, but rising rapidly. However, concerns about cyber crime and fraud make this a higher risk region for

international expansion, resulting in merchants needing to put robust and localised fraud prevention strategies in place. Russian-language criminals in Russia and neighbouring states are a significant threat according to the UK National Crime Agency6. This increased risk can be attributed in part to Internet penetration almost doubling in Russia in the last five years (70.4%7), as well as a large population of competent and technologically skilled unemployed.

Russia has also launched its own domestic card payment scheme called Mir. This alternative to Visa and Mastercard is partly in response to Western sanctions following Moscow’s annexation of Crimea from Ukraine. China’s AliExpress is reported to be the first foreign company that will accept the Mir card as a viable form of payment outside of Russia. Seven financial institutions are already on board, with a further 35 agreeing to issue the card. Russia’s Central Bank has set targets of 50-60% of domestic cards to be Mir-branded cards by 2018.

Strategic partnerships with global companies and the pressuring of the growth of the Russian e-commerce market is expected to propel the Mir card to prominence both at home and abroad.

These idiosyncrasies between different regions, of which the examples above are only a few, demonstrate why partnering with providers who can share their regional knowledge and experience is so important for successful cross-border e-commerce.

10

“WE HAVE SEEN AS MUCH AS 20-30% INCREASE IN CONVERSION WHEN MERCHANTS HAVE OFFERED CUSTOMERS THE OPPORTUNITY TO USE THEIR LOCAL CURRENCY TO MAKE PAYMENTS ONLINE.”

MARK GERBAN, DIRECTOR COMMERCIAL OPERATIONS, SECURE TRADING

5. PREFERRED PAYMENTMETHODS

Cross-border e-commerce can only be realised when merchants overcome key challenges. Payment methods are a significant friction point for many international consumers, even when united by a common currency.

Offering alternative and localised payment methods is an important step to establish trust and loyalty in new markets. For many countries it may be a straightforward decision to offer payments via international cards and alternative payment methods such as paysafecard, mobile payments and online bank transfers, for other countries payment methods may be more localised.

In Russia, for example, accepting local payments such as Qiwi or Yandex could enable merchants to align themselves with the expected growth of cross-border e-commerce in this country. Russia’sown payment card, Mir, whilst currentlyonly used for domestic transactionsis also a local payment method towatch. Elsewhere in Germany Sofort,as well as local payment cards, accountfor a significant proportion of onlinetransactions. E-commerce consumers inFrance predominately use internationalpayment methods including globalpayment cards and PayPal, asdoes the UK.

Payment partners have considerable regional experience and knowledge that merchants should utilise to enable them to select appropriate payment methods in their chosen countries. They will also be able to advise and help merchants comply with local regulatory requirements, such ‘two-factor authentication’ set out in the European Banking Authority’s (EBA) guidelines8.

FOREIGN EXCHANGE CONSIDERATIONSAnother factor that can also impact on a merchant’s success in a specific region is currency options. While local payment methods are made in the local currency, many e-commerce sites take payments in the merchant’s local currency for international cards such as Mastercard and Visa. Consumers will not see the actual cost of the transaction in their local currency until they check their card statement. This can result in high levels of cart abandonment, as consumers prefer to see their local currency and know exactly how much their purchase will cost them without calculating the exchange rate and fees themselves.

The solution is to use Dynamic Currency Conversion (DCC) that converts the cost of a transaction into a credit or debit cardholder’s local currency at checkout. Settlement still takes place in the merchant’s base currency, but foreign exchange rates are fixed at the point of sale.

11

“INTRODUCING LOCAL CURRENCY OPTIONS AND ALSO LOCALISED PAYMENT GATEWAYS (MULTIPLE LANGUAGE OPTIONS FOR DIFFERENT COUNTRIES AND REGIONS), CAN INCREASE CONVERSION BY 10-30%.”

MARK GERBAN, DIRECTOR COMMERCIAL OPERATIONS, SECURE TRADING

5. PREFERRED PAYMENTMETHODS Continued

DCC can also generate revenue for merchants, potentially increasing margins by 5 – 7%. In partnership with a payment service provider who understands the value of working alongside clients to increase revenue, currency conversion margins and fees that would normally go to card associations and card issuers, are instead diverted to merchants and online payment processors.

Merchants also need to be clear on the cost of international expansion, especially where hidden costs and fees are not always clear. Foreign exchange costs are generally considered the least understood area in terms of payments, and many payment service providers (PSPs) are not transparent with these fees.

While there are generally fourteen types of settlement currencies that providers can offer at a reasonably low cost, the larger areas of cost impact are with exotic currencies such as Turkish Lira, Brazilian Reals or Norwegian Kroner. If merchants do not monitor their business and understand how much they make in exotic currencies, there could be an unpleasant surprise with regards to hidden cost, once merchant billing and reconciliation systems are unable to match up with provider invoices.

If a merchant plans to set up business internationally, they should expect to work with a payment partner that is able to transparently disclose the amount they are paying on their international business.

12

THERE ARE SOME REGIONS WHERE BASIC FRAUD TOOLS WILL BE ENOUGH TO HANDLE MOST COMMON TYPES OF FRAUD, BUT OTHER MARKETS SUCH AS RUSSIA OR ROMANIA REQUIRE HIGHER CALIBRE DEFENCE

6. PAYMENT FRAUDAND CONVERSION

Merchants also need to be educated on risk aspects and the potential opportunities for fraud in other foreign regions. Some territories are very prone to online merchant theft such as chargebacks, and a payment provider needs to ensure a merchant is best equipped to handle any type of malicious intent. Having the proper fraud tools in place can help reduce any type of credit card liability, while using some alternative payments reduces or eliminates the risk of loss to a merchant entirely.

Financial fraud losses grew by 25% in 20159, with payment card fraud up 18% over the same period to £567.5m. The adoption of EMV in the US has pushed more fraudsters online, and increased Internet penetration in high-risk regions such as Russia is also having an impact.

One of the most common forms of cyber crime in Russian language markets is the turnover of stolen payment card data. Card Not Present fraud saw the highest rate of increase in 2015 and payment fraud overall has increased by 130% between 2010 and 2015 according to research by Euromonitor.

There are some regions where basic fraud tools will be enough to handle most common types of fraud, but other markets such as Russia or Romania require higher calibre defence. These markets are known to be prevalent with organised online criminal rings, set up to target merchant vulnerabilities. There are technologies to stay ahead of these types of threats, such as machine learning and device fingerprinting, but the need to go beyond simple rule-based fraud systems is now at hand.

13

7. DATA BREACHESAND COMPLIANCE

In recent years we have seen criminals targeting the ecommerce sector with well-known names such as Marks and Spencers, eBay, US retailer Target and UK holiday company Thompson suffering data breaches.

The world’s biggest ever data security breach has only come to light recently; Yahoo revealed in September 2016 a data breach affecting 500 million stolen user accounts. The breach is said to have occurred in late 2014. This could have more wide reaching implications than the typical costs and fall out of a data breach. Verizon is negotiating a $4.8bn deal to purchase Yahoo’s core business, in light of this data breach Verizon may have the right to walk away from this deal.

Financial penalties for data breaches are set to rise as the EU’s General Data Protection Regulation (GDPR), due in 2017, will see these increase to up to €20 million or 4% of an organisation’s global annual turnover.

The Breach Level Index (BLI) reported 40,075,707 records being lost or stolen in the retail sector in 201510. Although this marks a decrease from 2014, when 567,316,824 records were breached, the number of incidents rose by 8%. 2014 was also significant with the AliExpress and Home Depot breaches, accounting for over 400 million records. The retail sector ranks highest for data breaches too, with 29.87% of incidents originating in this industry.

To reduce the risk of data breaches, and to reassure consumers, retailers need to identify the weak points in their payment systems, and take measures to combat fraud. At the same time there is a need to balance the impact of fraud prevention on the customer payment journey, ensuring that revenue is not lost because of aggressive fraud prevention tools.

One way to reduce the extent of systems for which a business must demonstrate PCI DSS compliance, is to use a payment services provider who employs tokenisation in their Application Programme Interface (API).

This dramatically reduces the likelihood of a credit card breach if a retailer is compromised. The process of tokenisation creates a token that is used in place of the payment card details. It has no value to a criminal, as it contains no actual data. Instead it removes sensitive data out of the merchant’s business and into the payment service provider’s PCI compliant hosting environment.

Tokenisation is an effective tool for protecting sensitive information, reducing damage caused by data breaches and deterring hackers. It can also be beneficial for customer loyalty (it is the technology behind ‘one-click’) and for building trust and a reputation for putting consumer data privacy first.

14

MERCHANTS NEED TO PROVIDE A FULLY LOCALISED CUSTOMER JOURNEY FROM WEBSITE PRODUCT PAGES REFLECTING THE LANGUAGE AND CULTURE OF THE LOCAL MARKET, TO PAYMENT TRANSACTION PAGES AND SHIPPING OPTIONS

8. OPTIMISINGCONVERSION

Just as a localised approach to fraud is essential, so is it necessary to optimise conversions for local markets. Fraud prevention tools can be a part of this solution using technology such as positive profiling to ensure a smooth payment journey for low risk transactions, while declining others.

Trusted verification methods can also form part of the local conversion process, using localised two-step authentication methods instead of a one-size-fits-all approach. Fraud prevention tools can provide consumers with reassurance that their transactions are safe, but only when they recognise the method. Therefore a combination of international and local fraud prevention tools is necessary, implementing those that are most appropriate in specific markets.

Localisation is key. In the UK and Ireland 3D Secure is widely used and trusted by consumers. Conversion increases in these regions when 3D Secure is utilised, as consumers are familiar with this authentication process and reassured by it. However, in other countries where 3D Secure is not widely understood conversion rates decrease when consumers are presented with a 3D Secure screen.

Furthermore, localised trust badges can also aid conversion; e-commerce merchants that are certified by Ecommerce Europe and the National Associations may carry the Ecommerce Europe Trustmark11 alongside their national trustmark.

A study by Atcore12, e-commerce platform for the travel sector, found that adding a trust badge increased conversions by 32%.

LOCALISED WEBSITES AND PAYMENT TRANSACTION PAGESWhile security is a significant concern for consumers buying online from e-commerce merchants overseas, thereare other friction points that may resultin high bounce rates and abandonedshopping baskets.

Merchants need to provide a fully localised customer journey from website product pages reflecting the language and culture of the local market, to payment transaction pages and shipping options. Language is an important part of the conversion process, websites and online payment forms that are localised in the consumer’s local language typically convert 20% more customers than those in the merchant’s local language.

Timely delivery and competitive shipping costs are essential for e-commerce retailers to compete with domestic and other overseas merchants, as are transparency and local currency conversions. Additional value may also be added by facilitating the prepayment of duties, taxes and insurance, giving consumers complete visibility over their order and additional charges.

15

PARTNERING WITH AN EXPERT PSP ENSURES THAT MERCHANTS REDUCE THEIR RISK TO PAYMENTS FRAUD, GET ASSISTANCE IN COMPLYING WITH LEGISLATION AND REGULATORY REQUIREMENTS IN THEIR CHOSEN REGIONS

9. PAYMENT SERVICE PROVIDERS

While there are many opportunities for cross-border e-commerce, they do create complexity for merchants wishing to get started. While the localisation of websites and marketing collateral can be addressed with expert advice from local marketers and translation agencies, experienced Payment Service Providers (PSPs) can support merchants in taking local payments.

When selecting PSP the following points can help identify the best partner:

• The PSP has deep local knowledge in the region/s,

• They provide localised advice for optimising the payments process and conversions,

• The PSP provides local payment methods and international alternative payments,

• They have extensive expertise in payments fraud, data security, and cyber crime prevention,

• The PSI reduces the extent of systems for which a merchant must demonstrate PCI DSS; utilising tokenisation as a standard feature of the API,

• They offer a transparent service for cross-border e-commerce, both for consumers and merchants,

• They provide a one-to-one payments gateway and acquiring solution, reducing complexity and enabling merchants to get to market,

• The PSP provides shipping and logistics solutions integrated in their service.

Partnering with an expert PSP ensures that merchants reduce their risk to payments fraud, get assistance in complying with legislation and regulatory requirements in their chosen regions, and optimise their e-commerce payments and conversions for cross-border trade.

16

The decision to launch onto overseas markets depends on many variables including the viability of the merchant’s products and services, the economic outlook for the regions identified, and the opportunities for the e-commerce sector.

Payments can be a significant obstacle to cross-border trade, and in some cases payments may prevent expansion into certain regions. This is why it is imperative to explore payments in the early stages of developing a business case for expanding into specific countries.

Factors such as preferred payment methods, localisation, shipping, payment fraud, cybercrime, legislation and compliance must all be addressed to ensure merchants have resilience and protection when operating in new markets. With these factors fully understood the opportunities for cross-border e-commerce are exciting. This is an area of e-commerce that is seeing growth and opportunity, providing online merchants with new markets and revenue streams.

“We want to help our e-commerce merchants succeed, grow their businesses, reach new markets and optimise their online opportunities globally. As a longstanding payments service provider with extensive experience and knowledge within our team, Secure Trading want to share this information with our merchants and online retailers to enable them to make better decisions, and approach cross-border trade with the insights needed to be successful.” - Mark Gerban, Director Commercial Operations, Secure Trading

London: +44 (0) 808 149 3546

Email: retail@securetrading.com

FACTORS SUCH AS PREFERRED PAYMENT METHODS, LOCALISATION, SHIPPING, PAYMENT FRAUD, CYBERCRIME, LEGISLATION AND COMPLIANCE MUST ALL BE ADDRESSED TO ENSURE MERCHANTS HAVE RESILIENCE AND PROTECTION WHEN OPERATING IN NEW MARKETS

10.0 CONCLUSION

17

11.0 GLOSSARY OF TERMS

3D SECURE3D Secure is an XML-based protocol designed to be an additional security layer for online credit and debit card transactions.

ALTERNATIVE PAYMENTS METHODSThese refer to payment methods used as an alternative to credit or debit cards. These include charge cards, prepaid cards, direct debit, bank transfers, phone and mobile payments, money orders and cash payments.

CHARGEBACKThis is the demand from a credit card company or bank for a merchant to make good the loss on a fraudulent or disputed transaction. Also known as ‘friendly-fraud’.

DIGITAL PAYMENTSPayments made online from a merchants’ eCommerce website. For the purposes of this whitepaper ‘digital payments’ refers to transactions involving the purchase of digital, non-material, goods.

DIGITAL SINGLE MARKETThis is a European Commission initiative to use the Internet and digital technologies to create jobs and contribute an estimated €415 billion per annum to the European economy.

ECOMMERCEECcommerce (electronic commerce) refers to the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the Internet.

INTERNET PENETRATIONAccess to the Internet is a key driver in the adoption of e-commerce by consumers in emerging markets.

MCOMMERCE Mobile commerce refers to the process of making transactions using mobile browsers or mobile apps.

PAYMENT SERVICES PROVIDERA payment services provider facilitates transactions securely between a customer and a merchant.

TOKENISATIONTokenisation replaces sensitive data, PAN, with a token that can then be securely stored and transmitted to a payment service provider.

18

12.0 SOURCES

1. http://www.ecommerce-europe.eu/news/2015/global-e-commerce-turnover-grew-by-24.0-to-reach-1943bn-in-2014

2. Ecommerce Europe: European B2C E-commerce Report 2015

3. http://www.emarketer.com/Article/Smartphone-Users-Worldwide-Will-Total-175-Billion-2014/1010536

4. http://www.pewglobal.org/2016/02/22/smartphone-ownership-and-internet-usage-continues-to-climb-in-emerging-economies/

5. http://ecommercenews.eu/mobile-commerce-in-europe-2015/

6. http://www.nationalcrimeagency.gov.uk/publications/560-national-strategic-assessment-of-serious-and-organised-crime-2015/file

7. http://www.ewdn.com/2016/02/08/with-84-million-users-russias-internet-penetration-rate-has-nearly-doubled-in-five-years/

8. https://www.eba.europa.eu/regulation-and-policy/consumer-protection-and-financial-innovation/guidelines-on-the-security-of-internet-payments

9. https://www.financialfraudaction.org.uk/cms/assets/1/downloads-7-3085-2015-year-end-fraud-update-report.pdf

10. http://blog.gemalto.com/security/2016/03/03/2015-data-breaches-by-the-numbers/

11. http://www.ecommerce-europe.eu/trustmark

12. https://vwo.com/blog/do-trust-badges-on-websites-work-oh-yes-32-increase-in-conversions

19

TO FIND OUT MORE ABOUT

OUR FRAUD SERVICES OR

SECURE TRADINGS OTHER PAYMENT

MANAGEMENT SOLUTIONS CONTACT OUR

SALES TEAM - RETAIL@SECURETRADING.COM

13.0 ABOUT SECURE TRADING

Secure Trading is an integrated payments services company – a single point of contact for card acquiring, payment processing and PCI compliance and cyber security services.

Established in 1997, Secure Trading’s specialist service helps businesses of all sizes across a whole spectrum of industries achieve success online. Our worldwide footprint and network ensure that we can deliver tailored solutions to even the biggest international companies, while our uncompromising focus on customer service means that thousands of businesses across retail, gaming digital entertainments and financial sectors trust us to give their customers the best possible online experience, 24/7. Our high-performance payments platform has an unrivalled 100% uptime record, while our multi-acquiring network ensures businesses can operate internationally with ease. With both payment processing and card acquiring services we can provide businesses with an end-to-end solution, reducing the complexity of setting up online. We also offer complementary bespoke cyber security services and PCI compliance certification.

Headquartered in the UK, US and Malta, Secure Trading is your payment partner. www.securetrading.com

London: +44 (0) 808 149 3546

Email: retail@securetrading.com

Web: http://www.securetrading.com/retail