direct debits in europe the merchants perspective drf europe april 25-26, 2006 - basel

Direct Debits in Europe The merchants perspective

DRF EuropeApril 25-26, 2006 - Basel

Ronald WallrothGlobalCollect

Sven krahnLycos

Agenda

• Non face-to-face payments facts and figures

• Merchants challenges and expectations

• Direct Debit key benefits

• Lycos Europe business case

• Questions and discussion

GlobalCollect, International Payment Services

• Over 12 years of successful track record of payment collection and reconciliation worldwide

• One single technical and administrative interface enabling online merchants to accept:

» Credit and debit cards» Real-time and offline bank transfers» Direct debits» Invoices and e-invoices» Cheques

• GlobalCollect is privately owned and independent from its banking partners

• 60 million transactions in 2005 and over 40% growth expected in 2006

Companies with successful strategies

Payment behaviors per country

Source: Bank for International Settlements - March 2005

Shares of non-cash payments

0%

20%

40%

60%

80%

100%

Card based e-money

Direct Debits

Bank Transfers

Credit/Debit cards

Cheques

Only 64% of European online shoppers own a credit card

Source: Forrester 2004

Online payment collection challenges

SPEED

CURRENCIES

SECURITY

INSTRUCTIONS &LANGUAGESPAYMENT

METHODS

DATAPROTECTION

Global E-payment landscape

• Important regional cultural differences in payment behaviors • Difficult break through of new payment methods• Slow harmonization of payment processes through bank collaboration and international legislation• Currency convertibility issues• International transfer of funds barriers

The choice of payment methods is large

• Local bank transfers: 192 countries

• Real-time banking: 10 countries

• Credit & debit cards: 158 currencies

• Direct Debits: 20 countries

• Checks: 50 currencies

Direct Debits

GeneralGeneral

Pull mechanismFast processing (same day)Mandate direct debits used for recurring

paymentsNon-pre-authorized direct debits used

for online payments.

GlobalCollect specificGlobalCollect specific

Direct Debit supported for 9 countriesReporting of 99,9% of bank reversal in 3

business days. Detailed reporting of reversal by banks

and reversal by customers

Country specificNon-pre-authorized direct debits:Germany Spain The NetherlandsAustria

Country specificNon-pre-authorized direct debits:Germany Spain The NetherlandsAustria

Payment methods comparative analysis

Credit

Card

Direct

Debit

Bank

Transfer

Real Time

BankingCheque

Initiated Customer Customer

Speed

Costs

Charge back risk

Fraud Risk

Thank you for your attention !

Sven KrahnEuropean Director Billing & Customer ServicesLycos Europe GmbHTel.: +49 5241 807 1361Fax: +49 5241 80 67 1361Email: sven.krahn@lycos-europe.com

Ronald WallrothBusiness Development ManagerGlobalCollectTel.: +31 6 538 616 20Fax: +31 23 554 86 66Email: ronald.wallroth@globalcollect.com