Welcome to the new edition of “This week’s news”, a selection of links to interesting articles and news from the worlds of blogs and ecommerce.
Today, by coincidence, with a little card payment special – a hot topic for most online retailers.
Transaction fees can be a major obstacle in retail, both offline and online. Now the European Commission has announced plans to set a ceiling on the transaction fees that banks charge retailers for purchases with credit and debit cards. The move might save retailers 6 billion euros a year according to estimations by EU officials.
Whether consumers will benefit from such a step is far from clear though. The New York Times points out that while the change might motivate retailers to reduce prices, there is a likelihood that banks would try to generate the lost revenue through other channels, such as higher bank and credit card fees or reduced quality in access.
While we are at it: TechCrunch reported this week that the payment company iZettle – like Twingly based in Sweden – plans to slash transaction prices for card payments from 2.75 % to 1.5 %. To start with only in the UK and only if a small business that uses iZettle’s Smartphone-based card reader to receive card payments generates a revenue of more than £2000 per month. Interesting is the background on this move: The article quotes an iZettle executive saying that the 2.75 % rate which has been widely adopted by most of iZettle’s competitors is a “hangover from the U.S.”, introduced by mobile payment pioneer Square based on local cost structure. That is quite different from Europe though.
Something that online retailers don’t have to deal with: The question of whether customers authorize their payments by PIN or signature. In most of Europe, PIN has become the prevalent method, whereas in the US signature is being used above certain amounts. Meanwhile, in Australia the two major credit card companies Visa and MasterCard want to see signatures banned by June 30 next year.
PIN authorization requires cards to be equipped with an EMV chip storing that and other information. It’s widely considered being much more secure than the basic magnetic strip. The European Central Bank has just released figures stating that card fraud has been declining steadily since 2007, referring to widespread use of EMV chip-based payments as one reason.