What are a few challenges for e-commerce and e-payments in the Czech Republic?
According to current qualified estimates, the Czech Republic has the most e-shops per capita in the whole of Europe. At the end of 2020, there were 45,000 of them in operation and the share of online sales in purchases was 18 percent. And the growth of online sales will of course continue in 2021.
However, with the rapid expansion of payments, it is also necessary to pay attention to thorough security. In 2021, we can expect a higher number of attempts at robbery and fraud. These are also facilitated to some extent by the fact that many new customers have minimal experience, low prudence and they trust in things they should not. Major players in online payments therefore also have the challenge to contribute not only to greater security of transactions, but also to the education of customers, especially those who are less experienced in e-commerce until now.
With the development of online shopping, the emphasis on payment security is fortunately increasing. In December 2020, a new European regulation came into force called Strong Customer Authentication (SCA). This is part of a comprehensive directive known as PSD2 and requires additional steps for banks to ensure that the customer is the actual holder of the card they pay for. The purpose of this regulation is to reduce fraud and properly secure online shops so that customers can feel safe.
From digital payment platforms to security innovation to reduced costs and improved payment capabilities, 2021 is the year that will take the card tap to the mobile device and grow the economy in the right direction. 3DS v2 will become mainstream in 2021 providing a great degree of cards safety with an upgraded user experience.
Where will there by new growth opportunities for Czech e-commerce and e-payments looking ahead?
The whole market is expanding significantly into cross-border payments. This is partly due to the fact that a large percentage of Czech e-commerce customers already buy from abroad. And not only in Europe, but also from North America and China, which offer minimal transport costs despite the distance.
That is why more and more Czechs shop in this way, even those who use the internet relatively little. Due to having a good experience with cross-border e-commerce more and more Czech customers are using online payments more often and without fear, also in domestic transactions. Online shopping is becoming more natural for them and so they do many more domestic payments online as well.
An important factor for the expansion of online transactions is the fact that a number of successful Czech e-commerce players have been establishing and developing their branches in other countries in recent years, mainly in Europe. The PayU Hub is a very useful tool in this regard. Thanks to having a single platform for accepting payments from almost any market around the world, merchants can start selling in other countries quickly via one payment processor.
Finally, as in so many other places, the share of business transactions and payments from mobile devices has also been increasing in the Czech Republic. E-commerce and payment solutions for mobile devices are emerging and improving, for example VISA’s click-to-pay option. Merchants operating in the Czech Republic appreciate great solutions like PayU Mobile that provide a better user experience during payments on mobile devices.