Fear of fraud is keeping e-retailers out of global sales
Among medium and large online merchants, 41% do not accept overseas orders, with the biggest obstacle being fear of fraud, says a new survey of online merchants from payments processor Cybersource Corp.
Respondents to the survey could cite several factors in their decisions not to accept overseas orders. In order, they were:
Fraud risks: 75%
Logistics of order fulfillment: 69%
Establishing/maintaining infrastructure to collect payments: 66%
Tax issues: 65%
Export regulations: 55%
Support specific payment options in each country: 46%
Currency conversion/risks: 47%
Demand perceived to be too low: 45%
Product design/fit outside U.S.: 32%.
The survey further reports that the No. 1 fear is not unfounded: Fraud rates on overseas orders are four times the level of North American orders.
The survey also revealed, however, that overseas orders account for 10% to 20% of all orders at online retailers that accept overseas orders.
"The Internet was regarded as a global exchange mechanism from day one," said Doug Schwegman, CyberSource director of customer and market intelligence. "But when companies began working in that channel, the challenges of international e-commerce became apparent. But the survey shows that if your company`s product is appropriate for global sales, you might be passing up an enormous revenue potential. Beyond product, six of the seven top concerns that are holding back merchants can be successfully automated in their online payment system."
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