Highlights of the report:
- The fastest convergence of the CEE is happening in digitalisation; the lag for this can be measured in a couple of years, rather than decades.
- Digital Infrastructure is relatively well developed, while CEE is not fully reaping the benefits of digitalisation, especially in eGovernment services.
- Well-functioning eGovernment service could bring huge positive externalities to society and contribute to the prosperity of CEE countries.
Download the full report here:
CEE taking digital path to prosperity_Erste Group Research_22 June 2017-Report
Erste Group’s latest report has revealed that The Central and Eastern European (CEE) region is close to Western Europe’s level of digitalization.
Although the region fares well in terms of digital infrastructure, lack of digital public services is a major drawback for many countries, the report shows. However, countries can develop eGovernment services by building on their own digital infrastructure.
Although the level of digitalization and online access is almost on par with that of Western Europe, the CEE countries’ average GDP per capita in absolute terms is at the level seen in Western Europe in the mid-1980s and investment in areas requiring a lot of physical capital (such as road infrastructure) is taking much longer.
The report’s authors recommend more financial incentives for developing CEE workers’ digital skills and more investment in ICT solutions by CEE businesses.
When it comes to digitalization, CEE countries have made important progress in catching up with Western Europe. The gap for household internet access between the two regions is only four years and when it comes to mobile broadband access, the gap is only two years.
Furthermore, mainly low online reach into rural areas make contribute to the differences in digitalization between Eastern and Western Europe. When it comes to the urban environment, both regions have an almost identical level of internet and mobile broadband access.
Finally, Erste’s report highlights that there is still room for improvement, especially when it comes to the digitalization of public services. Few CEE countries (with the exception of Slovenia and Slovakia) have taken active steps in developing an eGovernment platform.
A new report by Juniper Research has found that retailers are in danger of losing USD 71 billion from CNP (Card-Not-Present) fraud by 2022.
The Online Payment Fraud: Emerging Threats, Key Vertical Strategies & Market Forecasts 2017-2022 report found that merchants do not invest enough in preventing online fraud, saying that the costs are too high. Because of this, many are not prepared to deal with online fraud following the introduction of EMV (chip and signature) payment cards in the US.
The analysis, however, points out that most merchants will receive value for their investment. Consequently, Juniper Research believes that extra effort is needed in educating merchants on the benefits of FDP (fraud detection and prevention).
The research points out that CNP physical goods sales are especially vulnerable to fraud, where loses will reach USD 14.8 billion annually in 2022. In spite of these figures, retailers are unwilling to impose rigorous ID checks on pick-up, fearing that this practice would damage the consumer experience and affect conversion rates.
Finally, the research argues that machine learning will be a key tool in identifying genuine users and combating fraud in 2018. At the same time, the ecommerce market will rely on 3DS 2.0 and biometrics.
Klarna has announced it has been granted a full banking licence by Finansinspektionen, the Swedish Financial Supervisory Authority.
Obtaining a banking license will enable Klarna to broaden its product portfolio for customers and merchants. The license to operate as a bank comes into effect starting from the date of the decision.
Klarna is a Swedish ecommerce company, founded in 2005 in Stockholm, which provides payment services for online storefronts. Currently it has 60 million customers, serving over 70,000 merchants across the world. Their core service is to assume stores’ claims for payments and handle customer payments.
Ovum, a market research and consulting company, has released a study that shows how PSD2 will drive single card payments down by 37% until 2027.
The research Instant payments and the post-PSD2 landscape, commissioned by Icon Solutions, provides insights into how PSD2 will lead to a decline in card transactions and an increase in frictionless payment methods such as Instant Payments in Europe.
The new European Payment Service Directive will cause ecommerce card usage to stagnate at current levels of around EUR 260 billion annually, instead of hitting the EUR 411 billion mark predicted without PSD2. On the other hand, the directive will boost frictionless payment methods, like Instant Payments and ewallets, which are expected to overtake cards.
As ecommerce card payments decrease by 37%, digital wallets and Instant Payments will become the two dominant payment methods as early as 2024, absorbing an average of 29% of expenditure across Europe.
The shift from ecommerce to digital channels will pressure merchants into adopting an omnichannel approach and to support new payment methods, the study shows.
The research, conducted by Ovum and commissioned by Icon Solutions, covers ten Europe-based markets and uses data from a European payments database, built from several sources including, national banks, national statistics agencies, and payments associations.