When even Apple gets it wrong then there must be a problem
Since the launch of the iMac nearly 10 years ago Apple has become associated with getting things right. by Mark ChirnsideThe mega success of the iBook and then the iPod suggested that the much anticipated release of the iPhone would be another success story. Yet it seems that even Apple failed to realise Europe isn't made up of millions of consumers thinking and acting in the same way.
While UK consumers rolled over and accepted that their iPhonescould only be supplied on one network, the Germans and French proved less compliant. The competition authorities agreed and made Apple's mobile partners offer the iPhone to consumers 'unlocked'. As we stand now the original German injunction has been overturned and the phones are supplied locked to one network again.
This failure to understand the diverse nature of Europe has caught out many companies trying to target the 494 million people in the EU's 27 member countries. Putting aside the barriers of language there are currently 15 currencies transacted across the EU. And the way payments are made in those countries is equally diverse.
It's estimated that only 11 per cent of spending in Germany is by credit card and the Italians are only performing one fifth as many of the debit card transactions of their French neighbours. And while the assumption is that everyone in the UK has a credit or debit card there are still an estimated 2.8 million adults that don't even have a bank account. Moving into Eastern Europe, the situation changes with even less of the online population having Visa or Mastercard payment cards to enable them to spend online.
This means that so-called alternative payments are making inroads into Europe with PayPal signing up an increasing number of high profile merchants. It's worth noting that this 'alternative' only emerged in 2000 but is now operating in 103 markets and managing over 133 million accounts, held in seven currencies worldwide and with local operations in 13 countries that contribute to annual transactions worth US$40 billion.
Merchants are accepting PayPal as it makes it easier to use just one international payment method that is trusted by consumers who also feel that their personal and financial details are safe. But consumers still need to get funds into Paypal. With a bank account this is normally possible, but not always in real-time, and without a bank account it's almost impossible.
Apple underestimated the challenges they would face in Europe; that online and multi-channel retailers looking to move into Europe must look to tailoring the payment methods they accept if they are going to succeed. Otherwise they risk seeing their desired return on investment taking longer to achieve.
Mark Chirnside is chief executive officer at Ukash
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