Debit cards in e-commerce: opportunities and challenges


Debit cards are both the most available and frequently used electronic payment instrument for purchases in Europe. However, customers, when shopping online cross border, often find themselves unable to use their national debit card to pay for their purchases.

Ecommerce Europe advocates for the widest possible acceptance of debit cards across Europe. Today, when unable to use their debit card, shoppers often blame their online merchant. However, due to technical and operational restrictions, this assumption more than often is incorrect.

Cross border debit card acceptance – welcomed, but complicated

Today, debit cards remain the most widely used, accepted and cost-efficient card-based payment method in Europe. In fact, since the introduction of the Interchange Fee Regulation, the use of debit cards has become even cheaper for both merchants and their customers. However, when using their debit card for online purchases, and cross border transactions in particular, customers often find that their national debit card is not accepted by an online merchant from a different EU country. As a result, many customers either abandon the transaction or have to resort back to credit cards which, in fact, are more expensive for merchants to accept.

Despite a great number of innovative online payment solutions emerging in recent years, national approaches to card-based payment methods continue to be fragmented. While all of these methods are designed for cross border interoperability in a face-to-face environment, their online uses are often limited to national uses and not interoperable with other countries. Therefore, customers when shopping online cross borders often do not find their national debit card solution offered.

For online merchants, payment infrastructure investments are made on the basis of long-term economic outlooks, expectations and trends. To be accepted and beneficial for online merchants, electronic payment solutions have to adhere to three fundamental principles: Reach; Conversion; and Fair Costs.

When deciding whether to accept a certain form of debit card, it is crucial for online merchants to consider whether the necessary investments balance the promised increase in customer reach. For online merchants, significant costs are associated with offering payment solutions and, and as such, it may not always be economically viable for an online merchant to offer country specific debit card payment solutions.

While interoperability of debit cards is crucial for extending the reach and conversion of online merchants, Ecommerce Europe believes that, based on technological and card-infrastructure developments, the market will find workable solutions.