How People Buy: The Evolution of Consumer Purchasing - Infographic

Friday, 19th September 2014


EU: MasterCard loses cross-border fees court battle

Friday, 19th September 2014

MasterCard has lost its decade-long battle against an EU ban on cross-border card fees as Europe’s highest court supported a broader regulatory drive.

"While the court’s decision applies only to MasterCard and the cross-border interchange fees retailers must pay when they accept credit and debit card transactions in Europe, it could encourage other regulators to take action and cap fees generally."

"The ruling should spur European lawmakers and governments to agree to a commission-proposed cap on credit and debit fees throughout the EU. The court verdict could also prompt Britain’s Competition and Markets Authority to revive its examination of fees charged by MasterCard and Visa Europe for domestic card payments."

More info here.

Cross-Border E-Commerce Makes the World Flatter

Friday, 19th September 2014

"Although e-commerce is the fastest-growing retail channel by far, its growth is being constrained by barriers to cross-border transactions. Those barriers will eventually be dismantled, and online retailers, carriers, and other service providers will need to take action to compete in an effectively borderless world."

"When the e-commerce channel is fully developed, retailing will be a multichannel activity, with online the leading channel for domestic and cross-border sales in most product categories."


"Nowhere is the rapid expansion of e-commerce more apparent than in Asia. China is leading the way, shedding its identity as solely a production center and emerging as a burgeoning consumer market, with an increasingly affluent and populous middle class eager to embrace online technologies and adopt the developed world’s consumption styles. Asia’s e-commerce growth rates are in the double digits in most product categories."

"The main growth, so far, is mostly domestic, as barriers to cross-border transactions are constraining the growth of cross-border e-commerce in Asia as well as in Western markets. These barriers include the following:

  • Unreliable and Lengthy Transit Times. Consumers want shorter, more precise, and more reliable delivery windows for both domestic and cross-border purchases.
  • Complex and Ambiguous Return Processes. Fully tracked, easy-to-arrange returns should be a standard option on all e-commerce sites.
  • Customs Bottlenecks. At present, dissonant customs practices create significant scheduling uncertainty for shippers. Customs regimes need to be harmonized and their timing made more predictable.
  • Limited Transparency on Delivery. Some parcels aren’t tracked at all, and the tracking information that does exist lags the actual delivery by about six hours. Tracking is linked to specific delivery windows, decreasing the value of the information for short transit times.
  • Price Opacity. International shipping options are often complicated by VAT and customs charges, and shoppers can’t determine the final landed cost of an item, even after they click “buy.” This uncertainty discourages purchasing.
  • Limited Ability to Alter Delivery Times and Locations. At present, if consumers’ plans change, they cannot change delivery times or locations for internationally shipped goods if the parcel is already in transit, as they can with most domestic deliveries."

"Cross-border e-commerce currently accounts for 10 to 15 percent of total e-commerce volume, depending on region. That share is sure to expand as the barriers are dismantled. By 2025, annual global cross-border e-commerce revenues could swell to between $250 billion and $350 billion—up from about $80 billion today. Asia will account for some 40 percent of those cross-border revenues, making it far and away the center of the e-commerce world. Europe will account for about 25 percent of revenues, followed by North America at 20 percent."

"It turns out that domestic e-commerce isn’t so domestic after all. Already, roughly 70 percent of the revenues of domestically anchored carriers in midsize European countries have some kind of cross-border component. In some cases, that component is a direct infeed from a foreign player; in others, a foreign player uses local fulfillment to complete a delivery; in still others, a domestic company assembles and ships goods with international content."


"The evolution of cross-border e-commerce is not without risk for retailers. When the cross-border channel is sufficiently robust, manufacturers of both branded and unbranded goods will have the option of bypassing retailers and distributing directly to consumers, wherever they are."

"Carriers have a critical role to play in bringing this new world into being, acting both independently and collectively to surmount cross-border barriers, standardize service offerings, and improve service quality."

"When cross-border e-commerce evolves to this level, every consumer will be able to shop globally at or near domestic service standards and prices. The retailers and carriers that hasten this evolution will be rewarded with significant growth."

More info here.

EU: Ministers tighten rules on the authorisation of payments via mobile apps

Friday, 19th September 2014

The Council of Ministers have revealed plans to tighten rules on the authentication of payments made via mobile wallets.

"The Council of Ministers’ presidency recommended that customer authentication should be mandated in a range of payment scenarios, including where consumers wish to register sensitive payment data to be used in a wallet solution. EU countries should ensure that payment service providers (PSPs) implement the authentication procedures."

"Customer authentication should also be required in cases where consumers want to access their payment account online, make an electronic payment transaction or signs up to an electronic debit mandate."

"Plans to reform existing EU laws governing electronic payments with PSD2 were first published by the European Commission in 2013. Under the reforms, third-party payment initiation service providers would need a license to operate in the EU."

More info here.

Global ecommerce sales to reach USD 2 trillion in 2015

Friday, 19th September 2014

Ecommerce sales around the world are expected to reach USD 2 trillion in 2015.

"From 1994 to 2012 ecommerce sales reached USD 1 trillion and in 2014 the value reached to USD 1.5 trillion."

"Ecommerce business has developed at a fast pace, mainly due to Software-as-a-Service (SaaS) technology, which helps automate processes that used to be complicated: credit cards, payment wallets, shipping, taxes, etc."

"In 2013, US SMEs ecommerce market topped USD 76.76 billion and is expected to surpass USD 100 billion in 2015."

More info here.

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