Add online shopping to the list of Greeks’ woes
July 10, 2015 01:48 PM
The Greek government has banned most money transfers to outside the country, and that’s preventing many consumers and businesses in Greece from making online purchases on foreign websites.
For example, Qrator.com, a startup social network and promotional platform for creative professionals, has been unable to pay its providers of web-based services outside of Greece because of the currency controls, says Anthe Mitrakos, a Greek-American working for Qrator in Athens. “So I offered to pay for them with my American credit card,” she says.
She says friends have had PayPal and iTunes transactions declined. “Basically,” she says, “no money is allowed to exit the country, through bank transactions or card transactions.” PayPal is authorizing transactions if the purchaser has sufficient funds in his PayPal account, but not if the buyer is seeking to fund the purchase from a Greek credit card or bank account, a spokeswoman says. Apple Inc. did not comment on its iTunes policy.
The Greek government’s ban on foreign funds transfers raises a question for retailers and other business that sell online: Should I accept an order if the purchaser attempts to pay with a Greek credit card or bank account? The question may be moot, because many Greek banks are declining card transactions, experts say. In any case, they say, foreign online sellers should exercise extreme caution when evaluating any purchases from Greece as long as the controls are in place.
189 retailers in the Internet Retailer 2015 Top 500 accept orders from Greece and ship to that country. Several of them contacted by Internet Retailer declined to comment on whether they continue to accept orders from Greece.
Overstock.com Inc., No. 31 in the Top 500, has not changed its policy, says president Stormy Simon. “While we have not imposed any restrictions on customers at this time, we are monitoring the situation carefully, and Overstock.com will comply with all applicable regulations,” she says. Similarly, online jeweler Allurez has adopted no new policy about Greek customers, but CEO Raphi Mahgerefteh says he doubts he’s had an order from Greece for years as the e-retailer does not advertise there because of the financial crisis and language barrier.
Even if an online seller chose to accept a purchase backed by a Greek card—hoping for payment once the controls are lifted—it may not be possible to get an authorization from the Greek bank that issues the card. Adyen, a global payments processor, says it’s seeing Greek card-issuing banks this week turn down far more cross-border transactions than usual, with an authorization rate perhaps 75% lower than normal, chief operations officer Sam Halse says. On the other hand, he says the authorization rate for transactions within Greece has been normal. That suggests Greek banks are following the government’s mandate of not allowing payments outside the country. There are no limits on Greek consumers or businesses making payments within the country.
Peter Caparso, chief commercial officer of BlueSnap, a provider of global payment services, says online retailers should be cautious. He notes that without the limits on funds transfers outside of the country, Greek banks would likely be broke by now and that many Greek consumers are using what euros they have to buy hard goods like Apple products and video gaming consoles, “feeling that these items will retain their value as compared to the option of keeping their funds in a bank and running the risk of money’s value diminishing.”
E-retailers should play it safe, he says. “The safe decision would be to hold off on Greek transactions for the next couple of days until the eurozone’s deadline of the end of the week that will determine if Greece stays part of the EU or not,” Caparso says.
Kount Inc., a provider of fraud-prevention services to online retailers and payment processors that monitors transactions on tens of thousands of websites, found the average dollar amount of transactions from Greece dropped by 50% this week on sites it tracks, says Don Bush, vice president of marketing.
Beyond the question of accepting transactions from Greece, Bush says online retailers should be on the alert because of the turmoil caused by the Greek financial crisis. “Fraudsters thrive on commotion,” Bush says. “They’ll test to see what works and if they find a hole in the dam, they’ll go for it.”