Local adoption of online payment slow
[HU]
Despite the fact that credit and debit card issuance in Hungary is expanding at an exponential rate, the local online retail market is still in its relative infancy, hampered thus far by a lack of confidence on behalf of internet shoppers, international distrust of Hungarian-issued bank cards, and a generally underdeveloped e-commerce sector.
And yet, according to a recent survey by GKIeNET Internet Research Kft, local online trade is expected to double in value this year, to some Ft 30 billion (€106 million). Furthermore, Hungary’s National Telecommunications Authority (NHH) last week introduced a new ADSL pricing plan that it is hoped will create an even playing field for alternative broadband internet service providers, thus giving more people cheaper access to the web, and with it more opportunity to shop and pay online.
According to the latest survey by U.K.-based research publisher Euromonitor Plc, the market in Hungarian financial cards – ATM cards, debit cards, credit cards, etc. – has enjoyed strong performance in the last few years. Euromonitor cites 7 million cards in circulation in 2004, compared to 4 million in 1999, showing an increase of 71%. The researcher notes that growth rates have since tailed off, which it states is a clear sign of the market becoming more mature.
Characterizing the market, Euromonitor states that debit cards held absolute dominance, with a market share of over 88% in 2004, while more sophisticated financial card products, such as credit, charge or e-purse cards, are growing in popularity.
(...)
Cash on delivery
Despite the increased number of cards, the increasing ease of paying online, and the fact that the total number of internet-based financial transactions in Hungary is rapidly rising, payment by financial cards represents only a fraction of the total value spent online, according to Euromonitor. Researchers found that the most common payment method is still “cash on delivery” – or, in the case of high-value items, bank transfer.
Euromonitor also notes that Hungarian consumers and retailers alike remain slightly nervous about making and receiving payments through the internet, as they still question the security of this practice.
“It is believed, however, that the widening range of products and services offered by card issuers, aiming to increase the safety of this payment method, as well as the growing number of online retailers accepting international payment cards, will eventually increase the significance of financial cards in online shopping,” Euromonitor noted.
On the question of trust and sovereign law, debates in Hungary over the legal issues surrounding online betting in particular have led some of the country’s banks to completely block transfers meant for online gambling sites.
According to leading international online betting agency Sportingbet Plc, payments cannot be made from Hungary on cards issued by Inter-Európa Bank Rt, Citibank Zrt, K&H Bank Rt, Hungarian Foreign Trade Bank Rt (MKB), Takarékbank Rt and other savings cooperatives.
Both K&H and MKB justify their ban by citing a high incidence of bank card fraud in internet gambling. According to András Orosz, the manager at K&H responsible for its card business, the bank does not allow payments to overseas gambling sites because the highest rate of international card fraud is in connection with gambling, noting that criminals often use stolen cards and/or hack sites to pay for online gambling.
(...)
It hasn’t clicked
It’s not just online betting that’s suffering, however. Again according to Euromonitor, web-based tourism services in Hungary are still underdeveloped when compared to Western Europe, and internet sales are small. Euromonitor states that internet transactions have not played a significant role in Hungarian tourism so far, with most major players using the internet mainly to provide information about products and services they offer. A relatively small but increasing proportion of companies offer online booking to customers; however, few accept online payment.
In addition, while worldwide book sales top the list of internet sales, here in Hungary, according to the Hungarian Literature Online (HLO) website, the situation is a far cry from the level of international stores such as Amazon.com.
“Instead of the ‘find anything’ approach, the selection of Hungarian online stores is often limited to the specific vendor’s stock,” the website notes. “Credit card payment is the exception rather than the rule, and to order, it is advisable to reside in Budapest.”
HLO also states that there are still many problems even after online payment has been made, and this latter problem of delivery is another reason why e-commerce and online payment is still sluggish in Hungary.
Even so, in this regard Hungary does not differ significantly from the rest of Europe. Indeed, in January 2006, the European Consumer Centre (ECC) reported that non-delivery of purchases is the biggest problem online shoppers face when they buy from online stores based abroad, with 46% of consumers who lodged a complaint with the ECC noting problems receiving their purchases after payment.
On the positive side, one major headache for Hungarians on the internet has recently been remedied. Up until six months ago, the ubiquitous internet payment system PayPal, a financial middleman most popularly used on online auction sites such as eBay, refused accounts to Hungarian citizens.
Although such payments represent nearly 8% of PayPal’s revenues, eBay executives have echoed Hungarian bankers’ concerns over long-term legal questions surrounding internet betting.
Source: BBJ.hu
Related news: Internet gambling remains inaccessible to outsiders
Despite the fact that credit and debit card issuance in Hungary is expanding at an exponential rate, the local online retail market is still in its relative infancy, hampered thus far by a lack of confidence on behalf of internet shoppers, international distrust of Hungarian-issued bank cards, and a generally underdeveloped e-commerce sector.
And yet, according to a recent survey by GKIeNET Internet Research Kft, local online trade is expected to double in value this year, to some Ft 30 billion (€106 million). Furthermore, Hungary’s National Telecommunications Authority (NHH) last week introduced a new ADSL pricing plan that it is hoped will create an even playing field for alternative broadband internet service providers, thus giving more people cheaper access to the web, and with it more opportunity to shop and pay online.
According to the latest survey by U.K.-based research publisher Euromonitor Plc, the market in Hungarian financial cards – ATM cards, debit cards, credit cards, etc. – has enjoyed strong performance in the last few years. Euromonitor cites 7 million cards in circulation in 2004, compared to 4 million in 1999, showing an increase of 71%. The researcher notes that growth rates have since tailed off, which it states is a clear sign of the market becoming more mature.
Characterizing the market, Euromonitor states that debit cards held absolute dominance, with a market share of over 88% in 2004, while more sophisticated financial card products, such as credit, charge or e-purse cards, are growing in popularity.
(...)
Cash on delivery
Despite the increased number of cards, the increasing ease of paying online, and the fact that the total number of internet-based financial transactions in Hungary is rapidly rising, payment by financial cards represents only a fraction of the total value spent online, according to Euromonitor. Researchers found that the most common payment method is still “cash on delivery” – or, in the case of high-value items, bank transfer.
Euromonitor also notes that Hungarian consumers and retailers alike remain slightly nervous about making and receiving payments through the internet, as they still question the security of this practice.
“It is believed, however, that the widening range of products and services offered by card issuers, aiming to increase the safety of this payment method, as well as the growing number of online retailers accepting international payment cards, will eventually increase the significance of financial cards in online shopping,” Euromonitor noted.
On the question of trust and sovereign law, debates in Hungary over the legal issues surrounding online betting in particular have led some of the country’s banks to completely block transfers meant for online gambling sites.
According to leading international online betting agency Sportingbet Plc, payments cannot be made from Hungary on cards issued by Inter-Európa Bank Rt, Citibank Zrt, K&H Bank Rt, Hungarian Foreign Trade Bank Rt (MKB), Takarékbank Rt and other savings cooperatives.
Both K&H and MKB justify their ban by citing a high incidence of bank card fraud in internet gambling. According to András Orosz, the manager at K&H responsible for its card business, the bank does not allow payments to overseas gambling sites because the highest rate of international card fraud is in connection with gambling, noting that criminals often use stolen cards and/or hack sites to pay for online gambling.
(...)
It hasn’t clicked
It’s not just online betting that’s suffering, however. Again according to Euromonitor, web-based tourism services in Hungary are still underdeveloped when compared to Western Europe, and internet sales are small. Euromonitor states that internet transactions have not played a significant role in Hungarian tourism so far, with most major players using the internet mainly to provide information about products and services they offer. A relatively small but increasing proportion of companies offer online booking to customers; however, few accept online payment.
In addition, while worldwide book sales top the list of internet sales, here in Hungary, according to the Hungarian Literature Online (HLO) website, the situation is a far cry from the level of international stores such as Amazon.com.
“Instead of the ‘find anything’ approach, the selection of Hungarian online stores is often limited to the specific vendor’s stock,” the website notes. “Credit card payment is the exception rather than the rule, and to order, it is advisable to reside in Budapest.”
HLO also states that there are still many problems even after online payment has been made, and this latter problem of delivery is another reason why e-commerce and online payment is still sluggish in Hungary.
Even so, in this regard Hungary does not differ significantly from the rest of Europe. Indeed, in January 2006, the European Consumer Centre (ECC) reported that non-delivery of purchases is the biggest problem online shoppers face when they buy from online stores based abroad, with 46% of consumers who lodged a complaint with the ECC noting problems receiving their purchases after payment.
On the positive side, one major headache for Hungarians on the internet has recently been remedied. Up until six months ago, the ubiquitous internet payment system PayPal, a financial middleman most popularly used on online auction sites such as eBay, refused accounts to Hungarian citizens.
Although such payments represent nearly 8% of PayPal’s revenues, eBay executives have echoed Hungarian bankers’ concerns over long-term legal questions surrounding internet betting.
Source: BBJ.hu
Related news: Internet gambling remains inaccessible to outsiders
mystro - 12. Jul, 07:00