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lessons from the leaders

lessons from the leaders. cross border fashion.

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lessons from the leaders

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  1. lessons from the leaders

  2. cross border fashion

  3. “Europe’s largest clothing retailer, Spain’s Inditex, is taking its flagship Zara brand online, but it can expect stiff competition from other giants of high-street fashion already well-established in cyberspace.”Madrid (AFP), 2 September 2010

  4. “We continue to move the focus of our international ambitions towards the internet and are now trading successfully online in 37 countries.  Overseas sales on the internet (excluding Eire) have grown 250%.”Results for the Half Year Ended July 2010 (RNS)

  5. “US retailer Gap, which has been online in the US since 1997, expanded the service to 55 countries on August 16.” The Times 2010

  6. “In the seven weeks to November 15, ASOS enjoyed a 46 per cent increase in sales — with international sales soaring by 161 per cent and British takings rising by 23 per cent.”.”The Times 2010

  7. “clothes are now the second most popular products online, after airline tickets but before books”Nielsen institute in 55 countries showed that

  8. lessons from the leaders

  9. Lessons from the Leaders -Expanding International e-Commerce Sales RBS WorldPay

  10. RBS WorldPay Europe’s largest payment processor • In 2009 we processed • - over 600 million online transactions • - 10% of global eComm transactions (by value) The ‘payments’ arm of The Royal Bankof Scotland Group

  11. RBS WorldPay 5% shoppers at German sites are overseas UK leads cross-border eComm in Europe 65% shoppers at UK sites are overseas “The largest cross border market in Europe is in and out of the UK” “UK web shops attracting a more international clientele than their continental counterpart”

  12. Lessons From The Leaders? 1cross border potential – more sales2 payments methods, regulation, fraud – adds cost 3disparate systems integration - adds cost4expertise in payments provider – reduces cost 5 converting DIY to outsourced - less cost6‘add-on’ over time approachis historical – today

  13. Online Sales Still Growing US 217 UK 55.6 JP 33.5 NL 4.7 DE 29.8 ES 4.0 FR 15.9 2.5 Cn KR 14 PL 1.4 AU 8.9 Mx 0.8 BR 6.5 In 0.8 IT 4.9 R 0.8 437bn online spend 2006

  14. Online Sales Still Growing US 217 369 UK 55.6 91 JP 33.5 61 NL 4.7 12.8 DE 29.8 70 ES 4.0 10.5 FR 15.9 2.5 43 Cn 18 KR 14 28 PL 1.4 3.4 AU 8.9 Mx 0.8 17 1trillion 3.2 BR 6.5 In 0.8 19 7.2 IT 4.9 R 0.8 by 2011 200 bn cross border 2.9 15 678bn2008

  15. Online Sales Travel 71%researched online 52%bought online 29 % bought offline Travel Tickets 45%bought online 35 % bought offline Holidays 73%researched online RBS merchants 2009

  16. Internet Penetration is Low 24% • 24 % of the world have internet access today but… • 360% consistent growth since 2002

  17. Huge Regional Potential Remains 3 bn population net users % • + 60% PL • + • 25% • NL, UK 1 bn 0.3 18.5% 50 % 70 % Asia Africa Middle East Europe North America Oceania / Aus Latin Am, Caribbean

  18. Cross Border Sales – Opportunity is Now • “I can buy products from other countries”Spain: 50% agree, Italy 47%, Sweden 36%, UK 36%, France 35%, Netherlands 33%, DE 26% • “It is striking to consider that, for a third of EU consumers, the attractiveness of price savings would prompt them to purchase products online in another country. “ • European Commission 18

  19. Lessons From The Leaders? 1cross border potential – more sales2 payment methods, regulation, fraud – add big costs 3disparate systems integration - adds cost4 converting DIY to outsourced - less cost5‘add-on’ over time approachis historical – today 19

  20. Popular Payment Types RBS WorldPay RBS WorldPay 2008 Proliferation of payment methods & processors

  21. Regional Payment Trends • Holland • Bank transfer • 2006/8 transactions • 20% online spend 2007/2008 • 80% merchants offer it 40% shopper prefer it • . 28 mil+87% 15 mil+300% 5 mil The average Dutch merchant accepts 4 payment methods (Thuiswinkel.org)

  22. Regional Payment Trends • Deutschland • Online banking • OLV (debit) LastschriftVerfahren • % online shoppers using • Firstgate (SMS micro) 7 mil users Largest economy in Europe OB 46% OLV 38% cards 35% 50 %

  23. Regional Payment Trends • España • Credit cards dominate • % online shoppers using creditcards 65% 50 %

  24. Regional Payment Trends • China • cards 93.7% of non-cash pymnts • real-time bank transfers based • on a debit card (40 banks) • Alipay (ewallet) 200 mill accnts • Union Mobile Pay launched 2008 50 %

  25. Regional Payment Trends • USA • cards still dominate • Alternative methods rising • Paypal • Revolution card • Secure Vault Payment(NACHA, 30 banks) • Bill Me Later • TrialPay 50 % 30% 2012 11% 2008 Pop. using alternative payment methods (Javelin Research)

  26. Choice Builds Sales • 79% 10% lift in conversion • 69% RBS merchants 2009 1 or 2 payment methods 3 plus payment methods

  27. So..Payment Type Popularity Today… credit card 41% debit card 36% PayPal 33% bank transfer 23% cash on delivery 2008 13% ELV 9% Giro / Acceptgiro C 6% prepaid cards C 7% cheque 5% offering more choice of payment methods increases sales

  28. Payment Type Popularity credit card 41% debit card 36% PayPal 33% bank transfer 23% cash on delivery 2008 13% ELV 9% Giro / Acceptgiro C 6% prepaid cards C 7% cheque 5%

  29. Payment Type Popularity credit card 41% debit card 36% PayPal 33% bank transfer 23% cash on delivery 2008 13% ELV 9% Giro / Acceptgiro C 6% prepaid cards C 7% cheque 5%

  30. Payment Type Popularity credit card 41% debit card 36% PayPal 33% bank transfer 23% cash on delivery 2008 13% ELV 9% Giro / Acceptgiro C 6% prepaid cards C 7% cheque 5%

  31. Payment Type Popularity credit card 23% debit card 25% PayPal 40% bank transfer 60% cash on delivery 2020 30% ELV 9% Giro / Acceptgiro C 20% prepaid cards 7%

  32. Payment Type Popularity credit card 23% debit card 25% PayPal 40% bank transfer 60% cash on delivery 2020 30% ELV 9% Giro / Acceptgiro C 20% prepaid cards 7%

  33. Payment Type Popularity Future? credit card 23% debit card 25% PayPal 40% bank transfer 60% cash on delivery 2020 30% ELV 9% Giro / Acceptgiro C 20% prepaid cards 7% offering more choice of payment methods increases sales

  34. Fraud ? “ Fraud for merchants can be completely avoided if merchants use only guaranteed payment methods combined with pre-payment. But… that will not lead to the highest sales Innopay “ “ The chances of you becoming a victim of card fraud are still low (fraudulent transactions make up 0.12% of all transactions, by value). APACS UK “

  35. Standardisation, Harmonisation? PCI DSS SEPA… PSD beneficial but time, effort & cost to implement and maintain 35

  36. Payments & Fraud & Change Drivers

  37. Costs – Impact on bottom line - 2 : • Payment choice/experience increases sales by 15% + • Transaction Costs per method, domestic & international • Expertise & Support – e.g. fraud config, market entry… • Reconciliation, FX, cash flow, treasury…?

  38. Costs – Impact on bottom line - 2 : • Regulation & compliance (PCI, PSD…) - outsource costs • Fraud – automate detection & rejection of bad payments • Availability – ensure against loss of sales

  39. Lessons From The Leaders? 1cross border potential – more sales2 payments methods, regulation, fraud – adds cost 3disparate systems integration - adds cost4 converting DIY to outsourced - less cost 5‘add-on’ over time approachis historical – today 39

  40. Disparate Systems…Integrate? New channels, new systems and new regulations Systems almost as busy as their changing rooms! Typically new systems are “add-on”- poor integration Typical 2 or more payment processing services – costly, complex, no central view of customer behaviour inhibits more sophisticated targeted marketing…journey to core shared systems begun, but it’s going to cost and it’s going to … take time……………… 40

  41. Lessons From The Leaders? 1cross channel / border potential – more sales2 payments methods, regulation, fraud – adds cost 3 disparate systems integration - adds cost4 converting DIY to outsourced - less cost 5 ‘add-on’ over time approachis historical. Today companies can learn the lessons from the leaders / have the benefit of hindsight 41

  42. Conclusions • Business As Usual Πάντα ῥεῖ καὶ οὐδὲν μένειEverything flows, nothing stands still. Heraclitus475 BC • Opportunity is great • Online sale still booming • Domestic growth yes but • World-wide potential is massive - early adopters realising • Challenges are significant • Domestic payment acceptance • Fraud and lack of confidence in non-domestic online sellers • Cross border support (delivery, reconciliation, cash management, regulator) • Change is constant

  43. The Lessons Benefit from the experiences of early adopters • Assume X channel and X border expansion from start • Choose outsourced payment service partner with… • scale and reliability • widest aggregation of channels and pay methods • plug and play domestic acquiring routes • interoperability built in • sensible adoption of new payment trends. 43

  44. The Lessons Benefit from the experiences of early adopters • Assume X channel and X border expansion from start • Choose outsourced payment service partner with… • scale and reliability • widest aggregation of channels and pay methods • plug and play domestic acquiring routes • interoperability built in • sensible adoption of new payment trends. 44

  45. Help Global Gateway RBS WorldPay is working with a number of international retailers supporting their expansion into overseas markets with integrated payment processing, acquiring and fraud management services 45

  46. Conclusions • World Payments Report • World Non-cash Payments Markets and Trends • Non-cash Payments Volumes Continue to Grow • Payments Innovation in Asia is Taking Many Forms • SEPA Update • SEPA - Unresolved Issues and Practical Challenges • Regulation, Client Needs and IT are Key Drivers • What Does the Future Hold? • Full report available on request comms@rbsworldpay.com

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