It pays to know your customer – Online payment methods

Making purchases via the Internet has become a way of life for many, but people are different, countries are different, and the way in which people choose to handle their money is different. eCommerce has opened the door to an abundance of new payment methods, and whilst some countries prefer a more traditional card payment approach, others prefer some of the alternative payment (AP) methods on the scene.

In 2015, alternative payment methods overtook card payment for the first time – making up 51% of global eCommerce turnover (source: Worldpay).

One of the best things that the Internet offers today is the ability to take your business anywhere on the planet through a website. You wouldn’t want to miss out on selling your products or services to new customers, just because you don’t offer the right payment solutions at the check-out. International buyers want to pay with their preferred and trusted payment methods, and more often than not, these may be country specific.

In global eCommerce it is imperative for businesses to offer a suitable and localised set of classic and alternative payment methods for all markets. A suitable payment set-up is the key to lower costs, fewer drop-outs, higher conversion rates and, ultimately, higher revenues.

The below list aims to provide you with some insight into online payment behaviour for a few specific regions and countries:


United Kingdom 

UK eCommerce turnover in 2015 was a whopping £110 billion and this is expected to increase to over £150 billion in the next 3 years. About 6 in 10 online transactions in the UK are paid by credit or debit card. Popular alternative payment methods include PayPal, Google Wallet and Apple Pay, and these three methods combined represent 82% of online payments in the UK.


Germany 

A global leader in Alternative Payment methods, 92% of eCommerce purchases are expected to be made this way by 2019. The German market is also strong in cross-border payments, with 50% of online purchases made on international websites.


Netherlands 

Whilst the eCommerce market is relatively underdeveloped here, it is growing steadily, thanks to a technologically-aware society. iDEAL, a native real-time bank transfer method, leads the ways in online payments and two thirds of all payments in the Netherlands are made using APs (67%). Card payments are not popular in this market, making up just 11% of transactions.


France 

Many online customers use Carte-Bleu (a debit card that can also be used as a credit card) to pay for their ordered goods online. However, the Carte-Bleu could lose its market share to eWallet systems as French consumers are early adopters of this technology. Interesting fact: in France, 3 of the major banks co-created Paylib, a new payment technology, and so far, this has seen more uptake amongst French Internet users than PayPal (source: techcrunch).


The United States

The major trend here is the move toward mobile payments, as the transaction value in the USA reached $67 billion in 2015 (source: CIO). This figure is expected to grow to $142 billion in 2019, as methods such as eWallets and wearable technology become more popular among consumers.


China 

An AP called Alipay dominates in China with 60% of the market share, and in 2015, their online proposition grew further as they partnered with 2 larger retailers: Walmart China and Uber (source: Worldpay). UnionPay credit cards are also important for retailers entering the Chinese market, because as a card scheme, it is already bigger than MasterCard, as UnionPay has focused on growing internationally and partnering with European providers to open up the market.


India

With only 15% of Internet penetration, India represents huge potential for growth in eCommerce markets.  Internet bank transfers and cash on delivery are the preferred choice here, as card payments have been historically unpopular.


Japan

Adoption of alternative payment trends has not taken off in Japan, due to a security-conscious population. 60% of transactions are made using cards and this payment method is expected to continue to dominate the market.


Australia

Cards with loyalty schemes are popular in Australia, dominating the market with a 61% share. However, Australian consumers are some of the world’s biggest users of eWallet systems, so the market’s share of cards could reduce drastically in the coming years.


South Africa

With online security playing a big part of South Africa’s eCommerce, companies such as PayPal that don’t share financial data with sellers have gained popularity in this market. Credit card payments are still responsible for just under half of all payments.


UAE

There’s no one particular preferred payment method in the UAE, with credit cards taking 21% of the market share, eWallets providing 15%, and cash on delivery and bank transfers representing 14% each. Payment via mobile is expected to triple from $1 billion in 2015 to $3 billion in 2019.


Brazil

Online purchases in Brazil make up 60% of South America’s total eCommerce market and its mobile eCommerce is expected to grow to upto $14 billon in 2019.


61% of online customers have greater confidence in a website that offers them a choice of domestic payment methods in a secure shopping environment. The eWallet landscape is now more competitive than ever and consumers are clear on what they want: convenience of not entering card details repeatedly; a high level of security; and the ability to use payment methods across different stores. Cultural payment preferences may change as new types become available over the next few years, and it is essential that businesses get on board right now and understand their markets – after all, it pays to know your customer.

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