The online retail revolution has impacted businesses and consumers in all corners of the globe. Simply put, the way we shop has changed forever thanks to the invention of the internet, and altered further by the smartphone’s subsequent rise to prominence.
Payment processing solutions have a key part to play in this worldwide shift towards electronic commerce. Not only do they make it possible for merchants to take debit and visa card payments from shoppers, they ensure it’s a safe and simple thing to do too. Regardless of the services they rely on, though, businesses must consider the rules and regulations that affect online trading in their native countries.
With this in mind, let’s take a look at how e-commerce works differently in some of the world’s biggest and emerging online shopping markets.
We’ll start with the UK, where data shows that web transactions are at an all-time high. In fact, online spending broke the £100 billion barrier in 2014, and looks set to continue growing in the coming years. Here, like in many other territories, sellers are governed by two main sets of rules: traditional consumer protection regulations and online-specific laws. The latter are perhaps more important in terms of payment processing, and are designed to protect the rights of consumers who make purchases over the internet.
Firstly, firms need to make sure shoppers have all the information they need on the businesses they’re investing in – including name, postal addresses, email addresses, registration and VAT numbers, and details of trade association memberships.
Once the time comes for the buyer to complete their payment, the retailer is required to clearly state that upon pressing the ‘order submit’ button, their chosen account will be debited with £X. This should be followed up with written acknowledgement and information on the consumer’s right to cancel the contract.
The Canadian e-retail sector is governed by the Financial Consumer Agency of Canada’s Code of Conduct for the Credit and Debit Card Industry. The purpose of this is to keep things clear and safe for both merchants and consumers. Under the rules, merchants are guaranteed to receive at least 90 days’ notice of any credit or debit card processing fee increases. Should this happen, merchants can also cancel their payment card network contracts without having to pay a penalty.
Fortunately for consumers, the code gives sellers the chance to offer discounted rates to users, depending on how they pay (cash/credit card/debit card etc.) – of course, these should be clearly displayed at the point of sale.
China, the home of global web-shopping giant Alibaba, is another major player on the ecommerce landscape. By 2016, the total value of online transactions for the year is expected to reach $356 billion.
In its attempts to maintain order in this burgeoning sector, the Chinese government has implemented a number of laws governing merchants and payment processors. Just last year (2014), the country’s State Administration for Industry and Commerce put into force rules meaning sellers have to:
- register using real names when selling products and services on third-party platforms
- offer shoppers at least a seven-day returns policy for most goods
- make every effort to safeguard users’ personal and payment data
The sector in China does have obstacles to overcome, and regulations have a key part to play moving forward. Given the country’s vastness, for instance, online payments are now coming from an increasingly spread-out network of web users – with more and more people in rural areas gaining net access. As a result, legislation going forward will likely have to be split geographically.
Now we’ve covered some of the more established e-retail markets, we’ll take a closer look at the situation in a couple of the emerging countries.
In 2000, just 0.9 per cent of the Saudi Arabian population could class themselves as internet users. By 2010, 9.8 million people were logged on – or 38.1 per cent of the country. This figure has continued to grow in recent years, with increasing numbers of consumers turning to the internet to shop.
Like in China, the government has responded to the rampant rise of e-retail by implementing a collection of new legislation – much of which is designed to protect shoppers. The Anti e-Crime Act and Anti-Commercial Fraud Law, for instance, both focus on fraud prevention. The 2007 E-Transactions Law centres instead around the security and trustworthiness of the electronic transactions themselves.
When it comes to offering protection for web-using consumers, there is still some work to do in Saudi Arabia. The kingdom’s measures are comparable with those of the countries around it, but aren’t quite at the same level seen in the UK or Canada. To this end, the Saudi Consumer Protection Association was formed – an independent group dedicated to enhancing consumer safety and awareness.
According to a recent report from Forrester, the combined e-commerce revenue of Brazil, Argentina and Mexico will hit $47 billion in 2018 – growth of 135 per cent from 2013. Of these Latin American markets, Brazil is the largest, but it’s still got some work to do if it’s going to catch up with the likes of China. As part of the growth efforts, numerous regulations have been introduced around payment processes.
Merchants are, for example, required to present a full summary of each purchase before it is completed. As is the case in the UK, consumers must also be presented with confirmation of their transaction once it has gone through. The environments in which transactions are completed and personal data is stored should be made secure by sellers, and channels must be made available for sellers to provide feedback, raise queries and cancel transactions.
At present, the laws don’t state the means through which all of these requirements should be fulfilled – this can cause issues for businesses in the sector.
The international doors that are now open to e-retailers create plenty of money-making opportunities, but navigating the landscape safely can be a daunting task. This is perhaps why so many enlist the help of payment processing specialists, who can help with the handling of transactions involving buyers from across the world.