Debit Cards Present An E-commerce Opportunity

As an online business, it is likely that one of your business objectives is to attract a broader geographic audience. After all, your site is accessible to any person in any country who has access to the Internet. This is a large market, with approximately 170 million Internet users worldwide, according to International Data Corporation.

However, if you want to successfully attract customers beyond the North American market, it will be important for you to consider offering various payment alternatives.

Recognizing this trend, E-commerce vendors are providing merchants with various payment alternatives to offer their customers. One such company is WebsiteBilling.Com, a leader in transaction processing located in Hollywood, Florida.

WebsiteBilling.Com was officially launched in 1997 to take advantage of the online payment market blossoming at that time. Over the last five years, the company has grown to 25 people and is known for its two types of credit card transactions and online payment alternatives.

Evin Daly, Vice President of Sales and Marketing, explains, “We offer two types of credit card transactions. First, for a customer who can’t or doesn’t want their own merchant account, we offer our re-seller service. So, the advantage with that is they can go into business right away, we do all the fraud scrubbing, the transaction processing, the account reconciliation, and we wire the money to their bank account. The other type of transaction is a gateway account, where the merchant has their own merchant account and we do the fraud scrubbing and the processing.”

Daly explains that fraud scrubbing is when they examine a transaction in real-time against a number of criteria to ascertain its validity. The intensity of fraud scrubbing can be adjusted by client, web site, country, and other factors.

In addition to offering two types of credit card transactions, the company offers payment alternatives including online cheques and debit cards. It is in the latter area that Daly explains will bring huge opportunities, particularly for doing business in Europe and Asia.

“Europe and Asia-that’s a huge market for debit cards. They don’t usually use credit cards the way we do…their money comes out of their chequing account,” says Daly.

Many reasons have been provided to explain why regions like Europe and Asia do not favor credit cards for online transactions. Some analysts state that it is the low personal income of some countries and their lack of trust in financial institutions that has kept credit card penetration on the low scale. For countries that have higher per-capita income, the explanation is concern with security and online privacy, as well as cultural views of consumer debt. Finally, another reason has been lack of technical standards that have led to higher processing costs for financial institutions.

Daly says, “We [the U.S.] are technology innovators and early adoptors. If something rolls off the production block we’re the first ones to try it. The rest of the world will generally play a ‘wait and see’ attitude.”

At the same time, Daly recognizes there are other reasons why the U.S. tends to adopt different technologies before other countries.

“Americans are more trusting,” he says, and, “Our security with regard to credit card numbers-it’s all under lock and key - layers and layers of encryption so even if someone got to it, it wouldn’t be useful to them.”

Along with its focus on Europe, Asia and North America, WebsiteBilling.Com concentrates on both small and large-scale clients who are in the business-to-consumer area. “The customer we’re dealing with is our merchant base and our Web masters. We work with large multi-million dollar companies right down to the guy working out of his back bedroom.”

Daly points out, “Obviously the bigger clients are of interest to us because we make more money, but smaller clients will grow quickly, especially if they have a good model.”

To keep its customers satisfied, the company offers several competitive advantages.

“We have three main competitive advantages,” Daly states. “One, the price. We’re very price sensitive. We’ll always beat our competitors by half a percent, sometimes a full percentage. Second, we have 24/7 customer support, which means that our customers don’t have to answer their own phones if there’s a problem with a client. Finally, we have our ‘Insta-Tech’ service, where if somebody has a technical problem they have access to our technicians 24/7 through their mobile phones.”

Many reports state the reason business-to-consumer E-commerce has been slower in Europe and Asia, compared to the U.S., is because of low credit card use. Unless these regions are expected to change their preference for debit cards to credit credits quickly, it is in the best interest of E-commerce vendors to offer solutions that cater to their needs. Whatever the reason behind low credit card use for online transactions in these regions, WebsiteBilling.Com views this difference as a business opportunity - not an obstacle.