EC Investigation Leads to New Regulations on Geo-Blocking

Oct 28, 2016

According to a new report by the European Commission, two-thirds of European digital content providers are blocking cross-border online sales into certain other EU member states. It was also estimated that 40 percent of physical goods retailers engage in this practice as well. What is geo-blocking? Geo-blocking is the practice of either blocking access to websites from customers that are located outside a particular jurisdiction, or rerouting them to a different website.

In an effort to manage cross-border e-commerce between its member states, the European Commission launched an investigation. The purpose of this investigation – which took place last year – was to examine the prevalence of geo-blocking and evaluate if there was a competitive basis to investigate certain, key companies. The main concern of the European Commission is the contractual agreements between companies that result in geo-blocking (of digital content and physical goods).

Even with their concerns, the European Commission acknowledged the reasons why these businesses may feel the need to refuse to sell into another country. First, the costs incurred by these businesses to expand an online business cross-border. Second, a company’s online payment provider might refuse to accept payment from IP addresses in certain countries, in an effort to reduce fraud.

According to commissioner in charge of competition policy, Margrethe Vestager, “Where a non-dominant company decides unilaterally not to sell abroad, that is not an issue for competition law. But where geo-blocking occurs due to agreements, we need to take a close look whether there is anti-competitive behavior, which can be addressed by EU competition tools.”

After its initial reports were released in March, the EC continued working on its final report. On May 25th, the European Commission published a draft of the new regulation. This regulation proposes prohibiting geo-blocking and various related acts by traders that discriminate (by nationality, country of residence or establishment within the EU). While the scope is broad, it would ultimately prevent geo-blocking and discrimination in sales, pricing or payment conditions for online sales.

Controlling fraud and chargebacks is a big issue for businesses everywhere, especially in online sales. High chargeback rates can make it difficult for companies to hold onto their payment processing solutions. For startups, whose industries are considered to be high risk because of fraud and high chargeback rates, securing a merchant account is almost impossible.

As a high risk provider, EMB specializes in working with “high risk” businesses. Merchants can secure safe payment processing services and chargeback protection and prevention programs. The application process is simple, fast and hassle-free. If you’d like to learn more about EMB’s merchant chargeback protection, contact our expert team today.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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