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Friday, January 18, 2019

Ingenico Group 'switches on' Russian ecommerce

I ngenico Group launched a new gateway Dec. 11, 2018, designed to help Russian acquirers simplify and enhance online transactions. The gateway will enable participating acquirers and banks to reduce cross-border transaction fees, simplify compliance and improve access to Russian ecommerce markets, Ingenico representatives stated. Russian ecommerce spend was more than $32 billion in 2018, with an annual growth rate of 17 percent.

Gabriel de Montessus, senior vice president global online (Retail BU) for Ingenico Group, said payment processing in Russia has been expensive and time-consuming. Merchants have relied on offshore acquiring banks and required local legal representation, which is both expensive and time-consuming, he stated.

"International merchants can now reach Russian consumers that were previously inaccessible unless they completed complicated and costly [authorization] and legal processes," de Montessus said. "Our merchants will enjoy higher approval rates and lower fraud risk thanks to transparent and direct processing with the top Russian acquiring banks."

He additionally noted that merchants who sell goods in Russia must comply with local data regulations, which mandate storing personal data in local data centers. "We're carefully monitoring the fast-changing environment to ensure payment practices run smoothly and securely, keeping merchants compliant while they grow their sales," he said.

Switching on global ecommerce

An ACI Worldwide report titled How ISOs Can Turn the Five Major eCommerce Challenges to Opportunities cited five top challenges in international ecommerce. Researchers noted that outsourcing to a payment provider or connecting to an existing modular payment gateway can "'switch on' alternative payments as and when needed—to achieve rapid global expansion."

Mike Goodenough, head of strategic initiatives at Ingenico Group, identified soaring international fees as another impediment to international commerce growth. Card scheme network fees "have been growing yearly," he stated. "In April 2018, Visa added a new $0.0425 fee per international transaction."

Goodenough provided the following examples of how Ingenico's gateway solution solves the top five challenges cited in ACI's report:

  1. Enabling frictionless international payments processing: Merchants pay higher authorization rates and have longer wait times when cross-border transactions and settlements initiated in Russia are processed by foreign acquiring banks. International merchants frequently face VAT issues and repatriation of funds remitted locally in Russia. Ingenico's gateway transactions are processed "on us," eliminating foreign bank fees and delayed receipt of funds.

  2. Offering a seamless omnichannel experience: Merchants who process through the Ingenico gateway will no longer need a local legal representative. They can accept Visa, Mastercard and MIR cards in Russia and convert rubles to native currencies, minimizing risks associated with fluctuating currencies.

  3. Managing fraudulent purchases and chargebacks: In addition to dealing directly with Russian banks to reduce fraud rates, Goodenough said Ingenico is staying up to date with Russian regulations. "We are carefully following Russian legal regulation which is changing rapidly," he said. "Merchants must ensure their data collection is legally compliant irrespective of whether a transaction is processed domestically or internationally. Ingenico is fully compliant and we offer a one-of-a-kind solution that gives painless access to Russian transactions."

  4. Providing tools to increase checkout conversion: Goodenough pointed out that Ingenico's solution captures more than 80 percent of the local acquiring market through partnerships with leading acquiring banks such as Sberbank and Alfabank. "You will always achieve a better conversion rate if you're able to route a transaction back to the card issuing bank," he said. "As such, we work with a local integrator gateway, which routes traffic dynamically and stores data compliantly."

  5. Empowering merchants with innovative, state-of-the-art technology: "Our solution routes transactions to Russian domestic acquirers," Goodenough said. "We analyze consumer card BIN numbers and route transactions to the issuer directly (On-Us), this way local or international acquirers stay compliant with cross-border card schemes rules. Ingenico ePayments has entered in a partnership with Sberbank and other Russian acquirers with an ability to process international transactions domestically with smart routing."

Goodenough described the Ingenico gateway as a truly domestic solution that limits drop-off because it enables merchants to operate as if they were Russian merchants. He said that during the initial launch, Ingenico will be targeting enterprise merchants with a focus on travel, digital and retail. "By having the options with banks – and we're in discussions with more – we're able to really optimize the card traffic of our merchants," he said.


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