Extreme Couponing, Spicy eCommerce & Digital Disappointments

This week in payments, the EMEA region is still wondering if the British heat wave is inducing severe confusion as the UK government underestimates the size of its digital economy by nearly 50 percent. A startup in Dubai thinks it can change daily deal sites for the better, and PYMNTS.com tells you what cinnamon and eCommerce share in common in this week’s What’s In/What’s Out.

iZettle Changes The mPOS Game

What’s In: Startups taking a leap of faith in the payments industry.

What’s Out: Competitors offering the same products, services and prices 

What Happened: All was quiet on the European mobile POS front- until Swedish-based mPOS card reader company iZettle announced it was cutting transaction fees by a whopping 45 percent.

But not so fast: merchants need to read the fine print. This discounted rate is 1.5 percent for card-based transactions – compared to the standard 2.75 percent – and will only be offered to merchants who exceed £2,000 per month in card transactions. Only after this amount is reached will the company receive a cashback reduction at the end of each month.

Up until this point, other competitors (including Payleven and SumUp) operated on equal playing fields, also charging 2.75 percent for each transaction with zero monthly fees. Dropping transaction prices is iZettle’s effort to attract startups and small businesses owners by providing affordable platforms to accept card payments.

Will competitors match such low prices, or wait it out?  It’s your move, guys..

“Erm, by 120,00 what we really meant was 270,00”

What’s In: The UK Parliament misjudging the size of its digital economy—by a long shot.

What’s Out: Government members underestimating the increasing adoption of digital technology in traditional sectors.

What Happened: Teatime is over Britain. Companies are going digital and this is important for financial progress and innovation.

The report states that the UK has about 270,000 digital companies, which is significantly higher than the 120,000 companies projected by the government. The Google-backed research discovered the misconception stemmed from digital companies incorrectly categorized under traditional sectors. 

The government only accounted for Internet startups, technology companies and small dotcoms as part of the digital economy, when the reality is that many businesses have been making a shift towards digital methodologies in how they operate. The report indicated that the majority of companies being overlooked were software companies, architecture services, engineering, technical and scientific operations.

Come to think of it: Kensington Palace made history this week, declaring for the first time on the Internet, through a string of tweets and emails, the arrival of the royal baby. Does this mean the monarchy would now be categorized as part of London’s digital economy, too?

Extreme Couponing: Dubai Style

What’s In: Daily Deal sites that pay attention to consumer trends and help merchants attract customers.

What’s Out: Daily Deal sites hoping to make a profit from unredeemed customer vouchers.

What Happened: Anyone else tired of missing out on long-awaited group fro-yo trips because your Groupon voucher expired? We understand your pain. And so does Akoupon, a Dubai-based deal site that claims it has a new voucher business model that will please both the consumer and the merchant.

Daily deal sites rose quickly in popularity, but as the discount culture expanded, problems emerged. Customers complained about unclaimed and expired coupons, and merchants were overestimating sales and losing money on leftover coupons.

Akoupon is a free platform that gives merchants more control over the distribution and inventory of coupons. The company said it will not be a “daily-deals site,” and instead aims to become a platform that local businesses can use as a way to communicate deals and discounts with people in the area. Additionally, Akoupon will work to make the customer experience easier, and will require vendors to keep customer data for each redeemed coupon. This way buyers won’t lose out if a printed voucher is lost. 

Online Merchants Channel Their Inner Christopher Columbus

What’s In: Taking a page from history books to foreshadow the potential of new aged eCommerce.

What’s Out: Retailers around the world who don’t maximize the potential of cross-border online sales.

What Happened: Merchants looking to trade during The Age of Discovery were forced to find new routes to sell their coveted spices to consumers in other countries. Tradesmen sought to expand their reach by opening new trade channels called “spice routes.” Today these spices routes have gone virtual, and it is the eCommerce market that now allows for the movement of hot commodities of modern day.

Internet connectivity gives overseas consumers the chance to buy products from all over the world, and the growth of eCommerce increases merchants’ desire to seek new trade channels. But just as the merchants in Eastern countries struggled to trade spices before oceans were explored, present day online merchants are struggling to maximize the potential of cross-border online sales. Consumer concerns about payment securities, online fraud, and geographic proximity continue to keep this new channel stuck at bay.

PayPal estimated that by 2018, there would be 130 million cross-border shoppers, and about $307 billion in cross-border sales would be reached by the same period. Point blank: if retailers want to make good on this lucrative channel then they need to find solutions for secure payment options and attract overseas shoppers.