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Ralf Ohlhausen, Business Development Director at PPRO Group questions whether UK e-commerce merchants know their Soforts from their iDEALs in their quest to boost sales across Western Europe

Western Europe is thriving, thanks to the region’s highly developed banking infrastructure and the growing maturity of the market.  It’s home to 19 different countries that boast an average annual income of around $55,000 (compared to a world average of below $10,000) as well as a wealth of diverse cultures and payment methods to match.  Western Europe’s more sophisticated and established banking infrastructure enabled shoppers to purchase an incredible $475.7 billion worth of goods and services online last year.

There is so much opportunity in this region for UK merchants to boost their cross border sales, but only if they understand that the payment culture in each country across Western Europe is very different.  Of course, credit cards are still a common way to pay for goods and services online, but they are not equally favoured in all countries as alternative payment methods are becoming more and more prevalent across this region.

A fountain of ‘payments’ knowledge

It’s so crucial that UK merchants understand the alternative payment options across this region.  As such, we’ve taken the liberty of producing a comprehensive global alternative payments guide, which sheds some light on how differently shoppers behave at the online checkout in each country.

Take the Netherlands, for example, around 65 per cent of all transactions are carried out using the iDEAL online banking system.  German and Austrian shoppers on the other hand prefer payment on account, via direct debit and PayPal while in Finland around half of online purchases are made by online bank transfer, and almost one in five online transactions in Portugal are paid by offline bank transfer.

What’s clear from our research is that Western Europeans are sticking with their preferred local established payment methods and providers such as Sofort, enter cash and iDEAL rather than paying for goods with their credit or debit cards, or even embracing newer payments methods such as e-wallets (only 19 per cent of Western Europeans use e-wallets).  The exception to this is that nearly a quarter of Norwegians (23 per cent, so higher than the Western Europe average) use e-wallets to pay online for goods.  The Swiss, however, are dismissing digital wallets in favour of paying by credit cards, and are big spenders, with the average online shopper spending $3,190 year. These are all key factors for UK e-commerce merchants to consider before selling cross-border in this region.

Mobile optimisation is key

It’s also incredibly important for these merchants to ensure that every online customer touchpoint is mobile-optimised as smartphone penetration is high across Western Europe.  In fact, 70 per cent of Western Europeans now own a smartphone, considerably higher than the global average of 42 per cent.  Any UK e-commerce merchant preparing to enter the Nordics or Dutch markets especially need to ensure their online check-out procedure is mobile-optimised, as 77 per cent of Norwegians and 76 per cent of Swedes and Dutch people currently own a smartphone that will be used frequently for online purchases.

Looking to warmer climes? 

UK merchants shouldn’t dismiss credit and debit cards though as 87 per cent of Spanish online shoppers favour these payment methods. The same goes for the Swedes, with 53 per cent preferring to pay with this method but also useful to bear in mind is a growing popular alternative payment method, Klarna, a Swedish company that allows shoppers to pay for their purchases through online banking, invoices and installments.

Thanks to the European Single Market, consumers are very comfortable with making cross border purchases online, so the opportunity for UK e-commerce merchants to succeed across the channel in Western Europe is huge, but local knowledge and engagement are crucial.

Readers who would like a clearer insight into the 12 biggest markets in this region and the characteristics and behaviour of its 247 million online shoppers please click here.


Bank of England’s Haldane says inflation “tiger” is prowling



Bank of England's Haldane says inflation "tiger" is prowling 1

By Andy Bruce and David Milliken

LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.

In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.

“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”

Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.

“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.

He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.

Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.

Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.

But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.

Haldane’s comments put him at the most hawkish end among the nine members of the MPC.

Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.

“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.

(Editing by Larry King and John Stonestreet)


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Bitcoin slumps 6%, heads for worst week since March



Bitcoin slumps 6%, heads for worst week since March 2

By Ritvik Carvalho

LONDON (Reuters) – Bitcoin fell over 6% on Friday to its lowest in two weeks as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets.

The world’s biggest cryptocurrency slumped as low as $44,451 before recovering most of its losses. It was last trading down 1.2% at $46,525, on course for a drop of almost 20% this week, which would be its heaviest weekly loss since March last year.

The sell-off echoed that in equity markets, where European stocks tumbled as much as 1.5%, with concerns over lofty valuations also hammering demand. Asian stocks fell by the most in nine months.

“When flight to safety mode is on, it is the riskier investments that get pulled first,” Denis Vinokourov of London-based cryptocurrency exchange BeQuant wrote in a note.

Bitcoin has risen about 60% from the start of the year, hitting an all-time high of $58,354 this month as mainstream companies such as Tesla Inc and Mastercard Inc embraced cryptocurrencies.

Its stunning gains in recent months have led to concerns from investment banks over sky-high valuations and calls from governments and financial regulators for tighter regulation.

(Reporting by Ritvik Carvalho; additional reporting by Tom Wilson; editing by Dhara Ranasinghe, Karin Strohecker, William Maclean)

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Britain sets out blueprint to keep fintech ‘crown’ after Brexit



Britain sets out blueprint to keep fintech 'crown' after Brexit 3

By Huw Jones

LONDON (Reuters) – Brexit, COVID-19 and overseas competition are challenging fintech’s future, and Britain should act to stay competitive for the sector, a government-backed review said on Friday.

Britain’s departure from the European Union has cut the sector’s access to the world’s biggest single market, making the UK less attractive for fintechs wanting to expand cross-border.

The review headed by Ron Kalifa, former CEO of payments fintech Worldpay, sets out a “strategy and delivery model” that includes a new billion pound start-up fund and fast-tracking work visas for hiring the best talent globally.

“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.

Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.

“This review will make an important contribution to our plan to retain the UK’s fintech crown,” finance minister Rishi Sunak said, adding the government will respond in due course.

The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance all mean the sector’s future in Britain is not assured.

Britain increasingly needs to represent itself as a strong fintech scale-up destination as well as one for start-ups, it added.

The review recommends more flexible listing rules for fintechs to catch up with New York.

“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.

The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).

“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.

Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.

“It’s a question of knowing who to call when there’s a problem,” Swinburne said.

($1 = 0.7064 pounds)

(Reporting by Huw Jones; editing by Hugh Lawson and Jason Neely)

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