Ecommerce provides a huge opportunity for profit in Europe, with online retail sales predicted to reach £53.25bn in 2015 in the UK alone. The market here continues to grow faster than in the US, presenting some of the best opportunities for businesses looking to take a share in this lucrative market.
An opportunity of this size attracts new market entrants, often in the form of young and innovative companies, eager for a share of the profits. They are not afraid to use the latest technology systems and processes available to grow their business while keeping costs down. This includes alternative payment options such as Stripe, Square and PayPal, which European businesses and customers are embracing.
Established players like Visa and MasterCard are at risk of losing their market share in payments due to the availability of newer online payment options (there are around 30 widely used payment choices on the European market). European shoppers are not set in such traditional behaviours as in the US, where about 167 million American adults own at least one credit card.
In order to preserve their share of the market, acquiring banks need to up the ante and provide additional value or face losing their profits and market share to these new players. More companies competing means lower rates and lower fees and merchants are aware of this new level of choice.
A great example of innovation in this space is the way in which Amazon Prime processes payments. Once your card is used, you can effectively use Amazon as a payment method with one-click purchasing via a wallet method. It is frictionless, fast and secure and Amazon can retain its customers and their details.
The European market is far more volatile than the US and the big players need to ensure they can provide additional value to justify their continued position at the head of the market. This should include offering support and manageable fees in the event of chargebacks, simplifying compliance processes for merchants, and greater support for ‘Internet currencies’ that can be used to directly debit the customer for goods bought online.
