Author: Monica Eaton-Cardone, CIO, Global Risk Technologies
The majority of digital payment methods in Ireland are made via MasterCard or Visa (85%), followed by PayPal, which is rising (11%) and American Express (4%).
It’s not hard to see why Irish consumers prefer to use these payment methods: MasterCard’s zero liability promise, first brought to the US but since extended worldwide, expanded the minimum standard for consumer protection against unauthorised transactions. Meanwhile, Visa’s Checkout service offers customers a simpler way to checkout online using ‘just three easy clicks’ – making the customer experience far smoother, while remaining secure.
Yet Ireland’s eCommerce market still has much to do to keep pace with its European rivals. Allied Irish Banks reports that only 500 Irish online retailers have turnover above €5m a year. It estimates that 90% of Irish online retailers turn over less than €1m a year, with 60%+ generating less than €250K annually.
There are vast opportunities for growth in online retail in Ireland but Irish merchants are operating on slim profit margins, often less than 1%. This makes them increasingly vulnerable to the negative effects of hidden fraud problems, which directly impact their bottom line. The biggest hidden fraud problem is friendly fraud, where genuine customers realise they can exploit chargeback loopholes to claim reimbursement of funds from banks, rather than go to the retailer for refunds, as they would on the high street.
If they ignore the realities of friendly fraud, Irish merchants will join the international ranks of those suffering avoidable revenue loss. Educating merchants and consumers on the legitimate chargeback process is the first step to reducing the risk and changing damaging behaviours before they become entrenched.