Visa's Cross-Border Regulations

Stephen Yagielowicz
Recently, XBIZ World magazine asked CommerceGate CEO Bjorn Skarlen to clarify some of the basics, myths and misconceptions about Visa's cross-border regulations.

Here's what he had to say:

XBIZ: Is it important to have processing in the EU region?

Skarlen: As the market is evolving, the EU is taking a more important role in the online arena; so it's best to be set up in the correct way as soon as possible. Right now most of the programs in the U.S. receive 30-40 percent of their traffic from the EU area and I believe they should have a serious part of the revenue coming from this market as well.

XBIZ: What percentage of transactions come from outside of the U.S.?

Skarlen: The percentage of traffic is still higher than the percentage of transactions. This will even out very fast in my opinion as EU-surfers are catching up on getting confident using their credit card on the web. We know for sure that the percentage will go up when websites offer information in the local language and billing in the regional currency. CommerceGate provides support in multiple language and geo-targeted payment pages, which helps of course.

XBIZ: What has to be done to process transactions outside of the U.S.?

Skarlen: A webmaster can always use their U.S. processor to treat international transactions the same as domestic ones, but by using a regional processor, conversion rates and profits will increase. In order to do that, the cash-program has to set up their EU operation, including incorporating themselves in the EU and getting a local partner. After that, it's similar to the U.S. set-up, but using a regional processor that charge in Euros or other local currencies.

XBIZ: There are a lot of misconceptions regarding the Visa cross-border regulations; can you clarify these misconceptions?

Skarlen: If a company has an U.S. corporation and an EU corporation and funnels the traffic to a domestic URL from the .com address, the company has the right to have multiple processors in these different regions. There are processors in the EU today, however, that allow U.S. corporations to work through their setup — and that is not allowed according to Visa's cross-border regulations.

XBIZ: Are U.S. webmasters taking advantage of the strong Euro and weak dollar?

Skarlen: Some surfers like the fact that the U.S. dollar is weak and they get a bargain for their money. If done in the right way, cash-programs have the advantage of presenting their offers from start-to-finish with geo-targeted tours that terminate in regional payment pages. CommerceGate definitely makes this easier for clients, though anyone can do it if they make the effort.

XBIZ: What benefit are there for IP-based geo-targeting?

Skarlen: The best way to avoid confusion and increase sales is to present the surfer a regionally targeted offer; using his native language, currency and other information starting with the very first page the surfer sees. This is possible to do utilizing IP-based geo-targeting plus language detection; something that most everyone does today. If not, at least the offer and payment page should be customized to the surfer's geo-location.

XBIZ: What advice would you give to new programs or veterans in this industry about processing abroad?

Skarlen: I can give one good tip, which is to follow the trend and be where it happens! Keep good relationships with your domestic processors and hook up with CommerceGate or another EU processor that can guide you in developing the optimal user experience for your customers while increasing your profits.

CommerceGate Ltd is an IPSP based in Ireland, Europe. The company offers merchants the ability to accept a variety of payment solutions, including Visa, MasterCard, Maestro, Diners Club International, Visa Electron, Charge Me Later and ACH Check. For more information, visit