E-Commerce Sectors Face Differing Challenges

E-Commerce Sectors Face Differing Challenges

Hard Facts and Figures about European E-Commerce in the Pago Report 2005

June 2, 2005--The eagerly awaited Pago Report 2005 highlights new and surprising insights into European e-commerce. One of the key findings: consumer purchasing and payment behaviour patterns and non-payment risks vary widely in the e-commerce industry sectors analysed. This is one of the key results of the Pago Report 2005, which is based on the analysis of around 20 million real-life purchase transactions processed through the Pago platform in 2004. Entitled 'Success and risk factors in international E-payment" the Cologne based Acquiring & Payment Service Provider has published its fourth comprehensive annual study of e-commerce. The Pago Report 2005 is the only investigation into online business practice that uses statistical analysis of real purchase transactions instead of relying on polls and surveys.
"Looking at the results of the Pago Report 2005 one is inclined to say: E-commerce is dead, long live e-commerce", says Ruediger Trautmann, CEO of Pago. "Nobody would treat the sale of different goods and services in traditional retailers as one single business but rather analyse sector trends separately and more accurately. The same now applies to online business. "This," Trautmann adds, "is because the five key e-commerce sectors have developed and matured completely differently over the last few years." Whereas e-retailing, i.e. online sale of tangible goods, now resembles classical mail order businesses, we found that online travel agencies, for example, now have a completely different payment and non-payment risk profile.

The Pago Report 2005 focussed primarily on the industry sectors now at the forefront of e-commerce trends:

E-retailing (online sale of tangible goods)
Online Gambling (casino and card games, sports and other betting, lotteries)
Pharmacy / e-health (online sale of drugs, medicines and other healthcare products)
Telecommunication services (from mobile phone contracts and pre-paid phone cards to website hosting services)
Travel (travel services, from package holidays and low cost flight bookings to cruises and car rentals)
The Pago Report 2005 analyses purchase transactions in European online shops by consumers from Germany, the UK, and the rest of Europe as well as from countries outside Europe. Although the credit card clearly remains the most important and most popular payment method in general, German consumers have increasingly turned to direct debit payment. 64% of German consumers selected this payment method, an increase of 5 % points from 2003.

Trends in European online gambling were very surprising too. Until now most experts believed online gambling to be risky for consumers and that online gambling providers were often the victims of credit card fraud. The figures from the Pago report 2005 prove otherwise. Online gambling had the lowest credit card chargebacks, which are often generated when fraudulent credit card data is used. Only 0.26% of online gambling transactions led to chargebacks whereas the overall average chargeback rate in e-commerce stood at 0.83 %.

At first glance, this figure looks only slightly different from a year ago. But whereas the chargeback rate for German consumers has decreased by 50 %, it has increased some 200% for customers from other European countries. All in all, effective fraud prevention - especially in credit card payment - remains one of the key factors for successful e-commerce businesses.

"Despite the fact that there was only slight growth in European e-commerce last year," Ruediger Trautmann explains, "the trend towards more reliability and trustworthiness in online trading will gather pace. This will ensure that consumers can enjoy the diversity of online trading without any apprehension and fears. At the same time shop operators will continue to improve profitability by implementing appropriate and effective fraud prevention tools."

The international version of the Pago Report 2005 can be purchased for the subscription price of 375.00 Euro (+German VAT) in the Pago-shop (http://www.pago.de/shop) until June 30, 2005.

Hint: Journalists can obtain the Pago Report 2005 for free. Just ask for your personal discount code per e-mail. Enter this code and you will not be charged in the Pago shop.

Pago eTransaction Services GmbH:

Pago eTransaction Services GmbH (Cologne, Germany) is an international Acquiring & Payment Service Provider for e-commerce businesses, shops (point-of-sale) and mail-order businesses. Pago enables its clients to receive payments for their goods and services securely and quickly through electronic channels.

Because of the worldwide unique integration of credit card acquiring and payment processing, Pago gives businesses of all sizes access to all internationally and nationally relevant payment. The range of payment methods includes Visa and MasterCard, American Express, Diners Club, JCB, Switch/Solo as well as locally used direct debit methods.

Pago was founded in 1999 and is a Deutsche Bank AG and Beisheim Holding Schweiz AG company, offering its services through a global partner network. Pago currently operates over 5.700 active online-shop connections. Its clients include more than 780 companies from various industries including e-retailing, telecommunications, online-gambling, online-pharmacy and travel. (as of January 2005).

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