Global Update: Getting Paid Online

Many e-wallet solutions now also provide consumers with local payment options, and should be considered for a local approach.

In addition to local credit cards and e-wallet solutions, marketers seeking to penetrate local markets should consider offering direct debit and giro transfer.

Direct debit is a method of payment whereby customers give you the information and authorization required to debit funds directly from their bank account. Direct debit is a popular payment method in many European countries, and particularly so in Germany, Austria and the Netherlands. In the United Kingdom, direct debit is a popular way to make recurring payments such as monthly charitable giving programs or membership fees.

In practice, direct debit is similar to accepting credit card information online. Unlike credit cards, however, you don’t have the reassurance of an international authorization network to advise in real time whether or not funds are available in the customer’s account, nor do you have the option of an international merchant account for multiple currencies. Direct debit facilities must be specially established in each of your target markets.

It’s important to be aware of direct debit rules in each country. Where Germany and the United States limit standard liability for direct debit to 60 days, in the United Kingdom, a customer can reverse a transaction indefinitely.

Another popular payment method appropriate for a local approach is a giro transfer, which is an electronic funds transfer initiated by a customer. With this payment option, the marketer provides its giro account details and a unique payment reference number to customers, who then can use that information to initiate a transfer via their online banking facility.

This method of payment particularly is appropriate for higher ticket items and transactions where limited liability is desired. Because giro payments are initiated directly by customers, they are virtually non-repudiable and chargebacks are extremely rare.