The European Single Digital Market

Blog Post created by neeraj.gupta on Oct 28, 2016

It’s 2011. You live in Germany, the biggest market in the European Union, and you buy stuff online all the time. For books and clothes, you’re happy buying online from domestic retailers because you trust them and shipping is quick and cheap. However, you cast a wider net when shopping for online services. The Dutch tech industry is taking off and you found some great software products that you’d like to buy. Therein lies the rub. Namely, you like to pay via direct debit and have a German bank account, but these checkout pages assume you have Dutch bank account—even though you use the Euro. And you really don’t like using a credit card. After all, debt’s for suckers. You pass.


Let’s go back to the future where that’s all changed. The EU recently mandated that all direct debit payments in the Eurozone would migrate to what’s called the Single Euro Payments Area, or SEPA for short. That helps solve the problem described above and paves the way for the true single digital market across the EU. Presently, SEPA Direct Debit accounts for over 10% of all eCommerce spending in Europe and over 35% of German spending. That’s even higher for merchants employing a recurring revenue model since SEPA Direct Debit is the only alternative payment method that can support this.


What's the point? If you're marketing to European customers, it can be tempting to simply export your payment method max that works so well in the US (e.g. Visa, MasterCard, AmEx, Discover, etc.). Don't give in. Buyers around the world shop very differently and you're leaving money on the table if you don't localize.