The latest edition of Oaklen Consulting's industry watch deciphers several publications on payment habits in Europe that demonstrate that the fight against fraud must be adapted to the local context.
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The latest edition of Oaklen Consulting's industry watch deciphers several publications on payment habits in Europe that demonstrate that the fight against fraud must be adapted to the local context.
The EBA (European Banking Authority) publishes its "Survey of Consumer Payment Attitudes in the Euro Area" (SPACE). Comparing the 2016 and 2019 editions, we can see some major trends emerging:
- Cash is decreasing but still relatively important in access preferences, with Europeans demanding to have the choice even if they do not use it. We will have to watch to see if this decrease in usage will also translate into a decrease in the demand for continued access to cash payments in the future, which will mark the real shift to a cashless society;
- The use of cards at the point of sale, including contactless cards, has made a breakthrough, but the use of cell phones remains low, in contrast to the rhetoric and the efforts made to promote this payment method. Once again, the next few years may see a stronger change with the switch from contactless to mobile. This will certainly require further efforts to spread this technology to all phones and all age groups;
- The use of online payment methods has not changed significantly since 2019, even though this sales channel is increasingly popular. This lack of visibility may also be due to the ECB questionnaire itself, which did not foresee such a high proportion of "Other" means of payment (PayPal, etc.), perhaps masking strong usage. The arrival of solutions such as click-to-pay could change the configuration of payments on this channel in the years to come;
- An instant transfer on which a greater communication effort will have to be made to see it take off elsewhere than on B2C applications or one-off P2P transfers. This effort should be accompanied by the implementation of means to embed this payment instrument in a large number of use cases, but also by adapted billing. This shift to more advanced use may come from EPI;
- Cryptoassets that are absolutely not seen as payment instruments and that may require the ECB, in addition to the technological efforts to implement viable solutions, a major communication effort to justify and push the use of the Digital Euro through all layers of society.
This edition focuses on the year 2021 marked by COVID and the Brexit :
- The situation in the United Kingdom differs greatly from that of the Eurozone in that the use of cash is very low: 59% of transactions will be made in cash in the Eurozone in 2022, compared to 15% in the United Kingdom in 2021;
- The Brexit and its effects, which began to be felt in 2021, continued to impact the retail sector in 2022. For example, the increase in commissions seen in 2021 continued as a result of Visa and MasterCard classifying purchases between the U.K. and the European Economic Area (EEA) as inter-regional rather than intra-regional. Far from affecting only UK merchants, this increase also affects all EEA merchants when purchasing with a UK-issued card;
- In addition, the advent of strong authentication (SCA) has allowed payment schemes to introduce new fees on the use of 3DS, data points when 3DS is not possible but also exemption, transaction denial and additional testing in case of denial ;
- These successive fee increases have prompted the UK Payment Systems Regulator (PSR) to launch two consultations on this issue. One will focus on scheme and processing fees, and the other on UK-EEA interchange fees. Some responses are already available and the final report should be available by the end of 2023.
This report is based on an IPSOS online survey of 14,000 people over the age of 18 who made online purchases between December 2021 and January 2022. This report provides an in-depth analysis of 14 different markets. For France, we will note that :
- 64% of French consumers make cross-border purchases;
- 69% of them prefer large international marketplaces when buying in a foreign market;
- 77% accept longer delivery times from international retailers if the product is cheaper;
- 50% agree to be less demanding in terms of customer experience when making cross-border purchases when the brand is "trusted ";
- The French shop cross-border to find better prices (48%), to have access to items not available locally (38%) and to discover new and interesting products (50%).
After introducing its Contingent Reimbursement Model (CRM) Code in May 2019, fighting a 2021 battle with UK credit transfer players to implement Confirmation of Paid (CoP), the UK payments regulator (PSR) is continuing its work around the management of Authorized Pushed Payments (APP) scams with a new proposal to broaden the cases for reimbursements, with strong financial constraints for PSPs. The PSR is submitting four rules for comment:
- The PSP that sent the funds must reimburse the victim within 48 hours;
- The SPP can set a maximum out-of-pocket expense of £35 and set a threshold for claiming reimbursement of £100 or more;
- The costs (processing fees, dispute management, refund amount, etc.) are shared 50/50 between the PSP that sent the funds and the PSP that fraudulently received the funds;
- PSPs may apply a claim deadline of at least 13 months from the date of payment.
For more information and to obtain the complete watch do not hesitate to write to us: contacteznous@oaklen.eu
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