Will pan-European online payments speed up the European ecommerce market?

On the streets of Paris or Berlin one can feel the warmth of the sun, but Europe at large is still in the throes the freezing economic winter. And signs of spring aren’t exactly visible. Europe desperately needs economic growth, but things go to the opposite direction.

Continuous growth of e-commerce is still a ray of light amidst the economic blight. Consequently, economic difficulties have urged EU to promote pan-European ecommerce. For a long time, EU has been determined to build a single unified European market of 500 million consumers, which could effectively compete with the United States’ or China’s internal market.

During the last few years we have seen efforts to strengthen consumers’ confidence in the European ecommerce market. Latest undertakings include unifying EU consumer rights and developing delivery methods.  SEPA has already unified European credit transfers, direct debits and debit cards. These efforts have been part of the EU Commission’s vision to make Europe the world’s most competitive economy.

The next natural step in overcoming the obstacles of EU-wide ecommerce is to introduce pan-European online payments. For this purpose, the Euro Banking Association has developed MyBank e-authorization. The technology is designed to make buying and selling simpler and safer at a pan-European level. The ambitious project was launched in 2011 and first version of MyBank was launched at the end of March 2013.

In Western Europe people have traditionally placed great trust in banks, and online payments are often done through online banking. Consequently, MyBank offers a new online payment gateway for online stores across Europe, which can be used to pay purchases via domestic online banking accounts.

The new service model is simple. Merchants add new MyBank payment method to their shop. When the consumer selects the MyBank payment method, the consumer is redirected to his or her domestic online banking service. The consumer then pays the purchase using online banking account. The merchant receives immediate payment notification.

The service is not yet provided by banks operating in Finland, but at least Aktia, Pohjola and Nordea support the project and follow its progress closely.

One quite beneficial feature of MyBank is the fact that consumers do not have to give their bank details or credit card information to any other third parties, including the web store. Another very interesting feature is that MyBank also supports user authentication and direct debit e-mandates. In the future, it could be used to create Europe-wide secure e-mandates, such as e-lease for an apartment in another EU country.

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