Technology Breaks The Barrier For Payment Processors

Stephen Yagielowicz

XBIZ recently asked some of the top providers of European billing services for their view on the market, and the various advantages and disadvantages of being a U.S.-based operator serving an overseas audience in 2015 — a question transcending the billing space to encompass the entire online ecosystem.

According to Mobius Payments CEO Mia Zhu, on the question of whether or not European companies have an advantage in serving a European market, or are American companies competitive in this space as well, there is something to be said for spending actual face time with clients — and it is the benefit of that personal interaction and service that drives the Mobius Payments team to travel globally in order to meet business owners in their own cities.

We experienced amazing growth from entering the E.U. payments market during the past five years. We have acquired key knowledge, as we are informed of domestic and foreign strategies pertaining to payments, and ultimately this has strengthened our position for serving clients globally. -Mia Hyun, Mobius Payments

“European companies can have an advantage in serving the E.U. market, simply because speaking the same language and having a cultural connection is powerful,” Zhu told XBIZ. “However, technology allows merchants to conduct business globally, and to leverage the best possible service partners.”

“More and more companies today are global,” Zhu adds. “Buying and selling services internationally has opened the doors to increased profits and has leveled the playing field.”

Epoch has been processing transactions from the U.S. since 1996, and has operated its European subsidiary, Epoch EU, since 2005. The company’s vice president of sales and marketing, Harmik Gharapetian, believes that European companies do not necessarily have an advantage in serving European markets.

“We are extremely fortunate to have a number of European natives in key positions throughout Epoch’s companies,” Gharapetian told XBIZ. “That global perspective has enabled us to create systems that give both our U.S. and European clients the ability to sell successfully in Europe by offering local payment types, local currencies and payment pages with local languages.”

“That being said, in order to maximize their success, American companies need to be able to cater to the tastes of European consumers and be sensitive to European culture,” Gharapetian explains. “You do not have to be based in Europe to do this, but you do need to take the time to understand the market.”

NETbilling’s vice president of sales, Wendy Nelson, told XBIZ that American companies can be competitive across Europe, especially if they engage with European acquirers (the merchant account providers).

“E.U. acquiring allows E.U. merchants to avoid crossborder fees, and the actual E.U. interchange rates are lower than U.S. rates,” Nelson explains. “A merchant working with an American acquirer will sometimes experience higher overall fees when selling to E.U. cardholders, compared to a merchant working with an E.U. acquirer.”

“NETbilling can provide processing for companies everywhere and can assist with setting up merchant accounts from most regions throughout the world,” Nelson added.

As for the advantages and disadvantages faced by U.S.-based companies seeking to serve European customers, Zhu explains that one disadvantage to working with European clients from the U.S. is the time difference — but this is offset because learning your business globally is a huge advantage.

“We experienced amazing growth from entering the E.U. payments market during the past five years,” Zhu says. “We have acquired key knowledge, as we are informed of domestic and foreign strategies pertaining to payments, and ultimately this has strengthened our position for serving clients globally.”

Gharapetian also notes that there are significant advantages to serving European customers.

“Europe offers a large, sophisticated consumer base that is very profitable for our clients’ businesses, and we spend considerable time and resources to make sure that our clients maximize their success in Europe,” Gharapetian says. “Of course, for those who are not already familiar with Europe, they need to understand the differences in the consumer tastes, laws and content regulations.”

“But, so long as they do so, and are equipped to offer local payment types, languages and currencies,” Gharapetian adds, “we strongly recommend that they make Europe one of their key markets.” Nelson also sees both advantages and disadvantages to serving European merchants.

“For NETbilling, the advantage to serving Europe is the ability to add new customers in one of the largest ecommerce markets in the world, which NETbilling does via its strategic relationships with E.U. acquirers, and its own products which support processing functionality for E.U.-oriented merchants,” Nelson said. “The disadvantages are on the compliance side, where the new PSD2 regulations make it increasingly burdensome for merchants, gateways and acquirers, etc. compared to less regulated payments markets in North America.”

Gharapetian is quick to point out that while credit cards rule in the American markets, not all European markets use them for online purchases.

“There is a distinct difference in capitalizing your opportunities with E.U. customers as they prefer local payments or online bank transfers instead, so your choice of billing services is key to making the most of your E.U. traffic,” Gharapetian explains. “To maximize sales, your customers should be presented with options in their own language, in their local currency, and with payment options they are familiar with.”

“Epoch completely automates these factors for our clients, so that they maximize sales while offering consumers a seamless experience,” Gharapetian adds. “For example, we offer our clients the LogoGPS feature to use on their websites to promote the fact that they accept local types. This technology uses geo-targeting to display the top local payment options to each consumer, which increases the odds of making a sale.”

Nelson agrees that Europeans expect to be able to pay in their own currency — and with a wide variety of payment types.

“Customers also expect support for many of the top alternative payment methods, apart from the more traditional cards. For example, debit is huge in the E.U.,” Nelson explains. “Any sophisticated payments operator or merchant trying to do business in the E.U. needs a solution that include both local currency support and support for alternative payments.”

This makes it clear that serving European customers means offering them specific products and services tailored to their needs, while providing merchants with the tools they need to succeed.

For example, Mobius Payments offers a fully secure end-to-end global payment solution supporting all major credit cards, in 36 currencies, and also offers support for a wide variety of integrated shopping carts, ACH processing and more, while Epoch’s alternative payment options help merchants reach more European markets than they could on their own — by helping to reach countries where credit cards are not widely used for payments.

“Epoch accepts more than 40 different payment types and automatically converts 62 currencies,” Gharapetian told XBIZ. “Our payment automatically detects language preference and translates 17 different languages. All of this is done instantly, automatically, without any decisions from your potential customer for the most frictionless checkout process possible.”

“Additionally,” Gharapetian adds, “our payment pages are optimized for mobile traffic so that the high number of European consumers that use mobile devices are able to easily make purchases.”

As for what the future holds for the European billing arena as we head into the end of 2015, Nelson says the biggest news is the upcoming reduction of Visa/MC interchange rates as a result of E.U. regulation.

“This will dramatically reduce interchange costs, which should create a better competitive landscape for merchants and payments providers,” Nelson concludes. “NETbilling, as always, will be on the forefront of saving merchants money — by providing them with sophisticated processing, fraud scrubbing and call center solutions, and by working with dozens of banks and acquirers in the E.U. region.”

The takeaway from these online billing experts is that serving customers across borders may not be as simple as serving them at home, but with the right processing partners, it is a process that unleashes the true earning potential of your business. Here’s to Europe — your next market.