Editorial

2009 is coming to an end and this is the last issue of Netgiro News for the year. I would like to start by sharing some highlights that I believe point to positive trends in the e-commerce industry as a whole, and for Netgiro specifically, despite the challenging financial situation in the world.

During 2009, Netgiro expanded our global payment methods portfolio to include Asia and Latin America — areas bursting with exciting opportunities. While the e-commerce channel continues to grow overall, we have seen many of our customers moving into these emerging markets. For our part, we will continue to focus on supporting our clients’ geographical expansions on a global basis.

A number of large e-commerce brands choose us as the ideal partner to support their global payments programs in 2009. This does more than prove the strength of our value proposition. It points to their confidence in a growing, global e-commerce industry. I strongly believe that these positive trends, for the e-commerce industry as a whole and for Netgiro as a business, will continue into 2010 and beyond.

In this issue of Netgiro News you will learn how you can use our bank transfer service to capture more sales online. If you do business in Europe, you probably will find our research update section interesting — it reviews recent survey results on how European consumers use the online channel for cross-border purchases.

On behalf of the entire Netgiro team, I wish you happy holidays and all the best for the New Year.

Best regards,

Ingrid Lindström
MD, Netgiro Systems

Product updates

> A new card processing connection has been established to Wells Fargo enabling processing in multiple markets, such as USA, Hong Kong, Singapore, Australia, Canada and Europe. Our solution in these markets allows for local settlement, a perfect solution for global merchants.

> Refund functionality is now available for iDEAL transactions in the Netherlands via a new refund solution built and supported by Netgiro.

> Netgiro’s platform for Electronic Fund Transfers has been configured to comply with the new SEPA (Single Euro Payments Area) standards. We can now support bank transfers using both the local bank accounts and the new SEPA account structure. Continue reading below for more insights on the SEPA standards.

> Three new banks – Friesland Bank, ASN Bank and SNS Regio Bank – have been added to the local Internet Bank Payment scheme iDEAL in the Netherlands. The iDEAL program now includes 7 local banks that together represent some 10 million online banking consumers.

Electronic Fund Transfers
— a traditional payment method moves online

Did you know that consumers in many markets and target groups still prefer to use traditional “offline” bank transfers when paying for goods or services purchased online? This option should not be confused with the real-time bank payment option available in certain markets (where consumers pay by logging into their Internet bank accounts). Traditional bank transfers are actually a relatively easy and cost-efficient way of reaching consumers who do not have a credit card or an Internet bank account or who simply feel insecure about sharing card or bank account details at an online store. Read on to see exactly how it works.

How it works
After choosing bank transfer as a payment option at checkout, the consumer sees a payment information page. This page indicates the merchant’s bank account number and an order number to be included with the payment. The consumer then initiates the payment offline at a bank branch or via her Internet bank account. A bank transfer normally takes 2-3 days to complete.

When to use
Our experience shows that bank transfer is most popular in the e-retail industry — especially when the average ticket size is high. Geographic markets with low credit card penetration top the usage statistics. If you do business in Germany and Eastern Europe, this payment option will most likely be relevant for you.

So what about SEPA payments?
Isn’t that initiative supposed to remove the differences between countries by supporting a single European standard for payments? In the long term it should. But, in our experience, today’s SEPA structure is far from the adoption levels needed — both with banks and consumers. As long as consumers are unaware of how a SEPA payment works, you will still need to offer many buyers a localized option like Netgiro's Electronic Fund Transfer solution. Netgiro can support bank transfers using both the local bank accounts and the new SEPA account structure.

Would adding bank transfer benefit your payments program? Continue reading for a short summary of benefits and considerations.

Netgiro’s Electronic Fund Transfer (EFT) solution includes…

	>	An extensive bank account network to support international expansion – available in 21 markets today and the list is still growing
	>	An automated, transaction matching tool to facilitate reconciliations
	>	Dedicated merchant bank accounts (maintained and operated by Netgiro) for secure funds management
	>	SEPA compliance when applicable

The facts
The European Commission published a report earlier this year showing a remarkable difference between online shopping and online cross-border shopping. The share of all EU consumers who shop online has increased in the last few years, hitting 33% in 2008. However, cross-border e-commerce volumes remain relatively low. Only 7% of all consumers have made a purchase from an e-merchant located in another EU country. There are variations — cross-border shopping is more common in smaller countries where product offerings are limited and in countries where the e-commerce market is well developed.

The potential
Consumer attitudes towards cross-border shopping are more positive than the actual sales numbers show. One third of EU citizens say they would consider buying a product or service online from a seller in another country to get a better deal or product. This indicates that there is a huge untapped potential representing approximately 25% of European consumers. In a recent Forrester report, the analysts emphasize the cross-border sales as a great opportunity for e-merchants. The report describes online cross-border buyers as a valuable target group. On average, they are young, experienced online buyers with high disposable income and, most important, they spend more than average when they buy online.

The obstacles
Despite this strong potential for cross-border e-commerce trade, it seems like many merchants are not ready to accept or fulfill orders from other countries. A pan-European test showed that only 39% of the e-merchants tested could accept orders from another country.

Forrester has found five main reasons why merchants reject cross-border orders:
> Delivery costs are prohibitive
> Handling returns can be complex
> National regulations and taxes complicate the process
> Online payment methods are fragmented
> There is a need to build local brand awareness

The future
The European Commission has communicated a strategy to develop a European-wide online market. To encourage cross-border trade on the Internet, the Commission will create a simple, single set of rights for EU consumers and simplify the regulatory environment for e-retailers.

In addition, the SEPA initiative is designed to facilitate non-cash cross-border payments within the EU. As far as we have seen, the SEPA structure has not yet been fully adopted by the banks. Meanwhile, consumers have little or no information about how to make cross-border payments within the SEPA structure. Because of this, we anticipate a continuous need for locally adapted payment programs. It will be very interesting to see how these initiatives impact cross-border online trade in the coming years.

How does your business handle cross-border orders? Take the quick survey below about what obstacles you have experienced when trading with consumers in other countries.

Sources:
Commission staff working document: Report on cross-border e-commerce in the EU, 5 March 2009. Communication from the Commission of the European Parliament, the Council, The European Economic and Social Committee and the Committee of the Regions on Cross-Border Business to Consumer e-Commerce in the EU, 22 October 2009.
Targeting the European Cross-Border Buyer, Forrester Research Inc., 15 September 2009.
European Central Bank: www.ecb.int/paym/sepa

Follow us on Twitter

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Welcome aboard: In Store Solutions

In Store Solutions is a certified Skype provider who develops, markets and distributes a number of high technology products supporting the transmission of voice, data and video online. The company is a partner merchant for Skype Shop in 62 countries globally across Europe, North and South America, former USSR, Australia, Asia and Africa. In total, In Store Solutions ships more than 500,000 products annually to 181 countries - to end users through their network of online stores and to blue chip retailers around the world.

Thanks to our extensive offering of global online payment options, Netgiro are able to support In Store Solutions in both the traditional processing of card transactions on a global scale, but also to manage alternative payment methods, such as iDEAL in the Netherlands and Giropay in Germany.

For more information about In Store Solutions, please visit www.instoresolutions.com .

BlueHornet (www.bluehornet.com) is a leading provider of email marketing solutions and services for retailers. BlueHornet makes it easier to create highly targeted email campaigns that evolve through the customer lifecycle and that engage customers as their wants, needs and motivations change over time.

The newest solution in BlueHornet’s flagship eMarketing Suite (eMS) is called eMS Commerce Optimizer. eMS Commerce Optimizer is a robust email marketing platform that combines powerful data management tools, proven lifecycle messaging techniques, and innovative pricing options to provide the value, flexibility and strength retail organizations need to drive revenue.

In addition to the eMarketing Suite, BlueHornet provides in-house strategic email marketing and professional services. Marketers can draw on both at full-service or collaborative engagement levels to ensure optimum results from their email initiatives.

For more information, please visit www.bluehornet.com .

Upcoming events

Meet us at the Travel & Airlines Payment Summit in Miami, Florida in the US, December 2–3, 2009. A Netgiro representative will join some of our customers and other industry professionals in a panel discussion. Their topic: real world localized payments programs and how they have helped travel companies serve their customers and to their bottom lines.

For a detailed agenda and more information, please visit www.airlineinformation.org/AI_conferences/ATPS2009/
If you would like to arrange a meeting with our representatives at this event, contact us by clicking the link below.

Thank you!

We would like to send a specific thank you to everyone who attended the “European Online Payments Forum” that we hosted together with Barclaycard in London on 21 October. The good questions and interesting discussions involving all attendees made the day truly valuable and inspiring. We hope to see you again at future events like this one.

Feedback

Let us know what you think of our newsletter.
– Did you find the information useful? Would you prefer more or less detail? Are there other topics that you would like us to cover in this forum in the future? Your feedback is much appreciated and very valuable to us. Talk to your Netgiro account manager or e-mail us at info-(_sm3Remove)-_-(_a)-_netgiro-(d_)-_com . Thank You.