An average of 1.2 million internet purchases are made through banks in Estonia every month

Photo: Fotomontaaž

Eesti Pank's statistics show that in the past 11 months, 1.2 million internet purchases have been made through Estonian banks, with a total turnover of 54 million euros. Of these purchases, 4/5 were payments within Estonia made through a bank link service, accounting for 40 million euros in value. The average size of these payments was 42 euros. Credit cards were used more over the internet for making payments for goods and services ordered from other countries. Credit card payments were made on average 235 thousand times a month for a total value of 15 million euros. Only one tenth of these payments were within Estonia. The average credit card payment was 64 euros.

Three methods are used for paying for internet purchases: card payments, internet bank payments through a bank link service, and wallet solutions like PayPal. Paying for purchases made over the internet within Estonia is convenient and safe. It is possible to use a bank link service so that the purchase can be made within the internet bank of the purchaser's own bank, or else a credit card can be used. When MasterCard or VISA cards are used for internet payments, an additional password is required to ensure security. The payment options for cross-border payments are more limited and the most popular is card payments, though various wallet-solutions are also used. These are provided by various payment institutions and e-money organisations and allow consumers to pay for internet purchases more flexibly.

As internet shopping becomes ever more popular, it should be remembered that the payment solutions offered for paying for purchases are provided by both licensed payment service providers

and by some companies  that have no licence to offer such services. The Estonian Financial Supervision Authority supervises companies with licences, and its website provides information on whether a company offering payment solutions has a licence or not. Consumers using payment solutions offered by companies that are not under supervision do so at their own risk. Research by the European Commission shows that only rarely do internet purchasers have problems with criminal misuse of personal data, bank card data or internet bank passwords. The main worries of internet purchasers are more the difficulty of returning goods and getting reimbursed, problems with the delivery of goods, and inaccurate descriptions of goods on websites. The research also showed that awareness among consumers of the rights of internet purchasers is low.

Recommendations from the European Central Bank to payment service providers should be implemented by February 2015, increasing the security of internet payments around Europe and increasing consumer understanding. The new recommendations will also affect companies selling goods and services over the internet through payment service providers like banks, payment institutions and e-money institutions.