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Visa Navigate

September 2022


4 - 5 Minutes

From online to in-store: How safer e-commerce has inspired Central Eastern European innovation

Can e-commerce be as safe as face-to-face shopping? Explosive growth in digital business means we’re closer than ever to that reality. In Central Eastern Europe, the rapid adoption of e-commerce is inspiring services that merge the physical and virtual to meet consumer needs for greater security and convenience.

In Poland, Żabka Polska, which operates an “ultimate convenience ecosystem” comprising modern physical convenience stores, autonomous Żabka Nano stores and a mobile application, is leading the race to create a truly frictionless shopping experience. State-of-the-art technology, powered by US firm AiFi, allows recognised customers to enter a store, pick up the goods they want and simply leave, while the payment takes place in the background. Żabka Polska currently has a network of 41 autonomous Żabka Nano stores across Poland operating in this way.

Customers have the option of using the company’s Żappka app to self-identify via a QR code or register their bank card and mobile phone number on entering to facilitate communication and billing. By adopting AiFi’s autonomous store platform, Żabka Polska is among a pioneering first wave of European retailers that are seeking to redefine the shopping experience around customer convenience, speed and security.

Fraud declines, consumers get creative

Recent successes in combating online fraud appears to have given retailers and tech firms the confidence to accelerate towards true “omnichannel” shopping – paying for anything, anywhere, using a range of methods and devices. Data from Nielsen IQ1 shows online transactions across Europe grew between 6 and 12 times faster than face-to-face payments during the pandemic. While one might expect to see a commensurate jump in fraud, this has not been the case. Online business intelligence experts FICO say2 overall fraud actually decreased between 2018 and 2021 from a high of €1.8 billion to around €1.6 billion. Based on this data, taken as a percentage of overall transactions, fraud has declined across the board – which means more value can safely flow between banks, merchants and customers than ever before.

As COVID-19 recedes, new shopping habits that blend the physical and virtual and build on consumers’  familiarity with e-commerce appear to be emerging. Many of today’s consumers select a product in person, then purchase online once they have made their selection – or browse products in store and compare with alternative options using their mobile device.

“Banks and merchants are innovating to make e-commerce as safe, rapid and easy as buying in store.”

Inspiration online, innovation in store

Many banks and merchants are responding to these new shopping patterns to make digital transactions as safe, rapid and easy as face to face transactions – a necessary development given the way consumers’ retail experience merges the physical and virtual. This is especially evident in Central Eastern Europe (CEE), where consumers are making the leap from cash to omnichannel payments enabled by mobile devices. According to PCM’s Digital and Card Payments Yearbooks 2021-20223, Polish consumers used cash for fewer than half of all payments in 2021. There is a clear trend: as cash use declines, payments are going digital – both online and in store.

Mehret Habteab, Vice President of Digital Products at Visa Europe, says several factors are encouraging the rapid adoption of digital in CEE:  “From tokenization to risk-based authentication (RBA) and biometrics, many merchants are using sophisticated techniques to make transactions safer and optimise their use of transaction data.”

After-sales convenience: refunds and delivery

Keeping customers happy isn’t all about what happens at the point of sale. As transactions become faster and easier, customer expectations are rising across the board. In Romania, an online retailer eMAG noted significant dissatisfaction with even a 4-5 day turnaround for refunds, despite being seven days faster than legal requirements. The company implemented Visa Direct - Visa’s real-time4  money movement product - to enable faster refunds for customers shopping with a Visa-branded card.

Since introducing faster refunds, eMAG have seen a 5 percent uplift in consumers paying by card, also claiming that instant returns have increased customer satisfaction. Visa’s Habteab says this innovation “has strengthened the user experience considerably – it’s all about reducing friction in the refunds process and improving customer satisfaction.”

While fully digital transactions are accelerating, cash on delivery remains an important payment method in CEE. To enhance consumer convenience, speed up payment on delivery and make payments more secure, Romanian courier company Cargus enabled Visa’s tap to phone product for deliveries. Tap to Phone allows the consumer to tap their card against a mobile device operated by Cargus personnel. Categorised as a “card-present” payment, these mobile device payments make payment and customer verification faster, more simple and more secure.

Omnichannel: the new reality after COVID-19

With more shoppers blending their online and physical shopping habits and a wider range of payment types and devices, it looks as though the long-promised future of “omnichannel” payments is now a reality. For many merchants, this will mean adopting payments technologies that enable instant returns, walk-out capabilities and faster check-out times.

As Visa’s Habteab notes, “Many merchants realise most consumers want maximum convenience and a wide range of payment options, from QR-codes to crypto payments and walk-out. By using these new techniques both in store and online, merchants can improve the customer experience and drive more sales.”

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All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

“Europe’s next step in ecommerce growth”: Nielsen IQ, 15 June, 2021: https://nielseniq.com/global/en/insights/analysis/2021/its-time-for-the-next-stage-of-ecommerce-growth-in-europe/
2  “European Card Fraud 2020” FICO, 21 June, 2021: https://www.fico.com/blogs/european-card-fraud-2020-uk-shrinks-fraud-losses-ps46m
3  “The Digital and Card Payment Yearbooks 2021-2022”, Payments Cards and Mobile, 10 January 2022: www.paymentyearbooks.com
Actual fund availability depends on receiving financial institution and region

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