eCommerce Merchants Successfully Tapping Global Marketplace
New CyberSource survey data: international orders account for 10-20% of revenues for leading Web merchants
MOUNTAIN VIEW, Calif., June 16, 2004
The latest eCommerce payment survey from CyberSource Corporation (NASDAQ: CYBS) shows companies taking on international eCommerce are finding it worth the challenge. According to the data, international orders account for between 10 and 20 percent of revenue among those companies that accept orders from outside North America. Merchants ignoring the international market could be foregoing that level of potential revenue.
But in a seeming contradiction, only 59% of medium and larger web merchants choose to pursue the international sales channel, despite the success noted above. The reasons for this are explored in the new survey--first among them is fear of fraud. Merchants that accept international orders report their online fraud rate is four times the rate they experience with U.S. and Canadian orders. (This corresponds almost exactly with findings in CyberSource's Fifth Annual Online Fraud Report, published late last year.)
The full list of reasons cited for not accepting orders from outside North America are, in order of importance, 1) fear of fraud; 2) logistics of order fulfillment, 3) payment infrastructure; 4) tax issues; 5) export regulations; 6) support of local payment options; 7) management of currency conversion, 8) lack of demand or product fit.
"The Internet was regarded as a global exchange mechanism from day one," said Doug Schwegman, CyberSource director of customer and market intelligence. "But when companies began working in that channel, the challenges of international eCommerce became apparent. But the survey shows that if your company's product is appropriate for global sales, you might be passing up an enormous revenue potential. Beyond product, six of the seven top concerns that are holding back merchants can be successfully automated in their online payment system."
Companies that accept international orders say they do business with virtually all areas of the world, the U.K. and Germany having the highest percentage of participation (91%), and Asia outside of Japan having the lowest at 72%. But fewer than half those companies support common international payment methods, suggesting there are significant gains to be made in this arena by expanding acceptance of country-specific payment mechanisms.
About the survey
The survey, undertaken by CyberSource Corporation and conducted by Quality Research Associates, was derived from 147 telephone interviews with some of North America's top eCommerce websites. In order to qualify for the survey, companies needed a minimum of $10 million in annual online revenues. Respondent companies' online revenues account for an estimated 10% of 2003 business-to-consumer eCommerce in the United States.
To obtain a copy of the survey results --
The survey results are incorporated in a new industry whitepaper, "The Insider's Guide to eCommerce Payment". To obtain this, please visit:
http://www.cybersource.com/insidersguide.
Interested journalists--please contact Bruce Frymire at (650) 965-6042 or bfrymire@cybersource.comCyberSource solutions
CyberSource offers the Global Payment Suite, a comprehensive set of eight services designed to help eCommerce merchants grow their online sales in over 140 countries. The suite includes:
Local payment preferences: these include bank transfers (Giros), direct debits, and country-specific cards such as Carte Bleue, Switch/Solo, Electron, Dankort, and Carta Si.
Dynamic currency conversion: web merchants can display guaranteed prices in local currencies, while eliminating currency risk and receiving settlement in a wide variety of currencies.
Consolidated banking and reporting: a single link with CyberSource eliminates the need for merchants to establish individual banking relationships in each of their target countries. CyberSource also provides integrated reporting to facilitate easy reconciliation.
Global risk management tools, including:
CyberSource Advanced Fraud Screen (including checks such as international IP address verification and order velocity)
International Delivery Address Verification
Real-time regulatory compliance
Tax calculation, including sales/use and VAT for over 60 countries.
Export assistance to facilitate compliance with U.S. government regulations. Includes "Denied Parties" check.
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