2014-04-24

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. E-commerce 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. Because of this, some ecommerce markets and regions are booming, while others are trailing behind. 

One of the best things that the Web 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 e-commerce 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 – About 4 in 10 online transactions in the UK are paid by credit card, while debit cards account for around 35%. PayPal is the country’s third most used online payment method, and these three methods combined represent 96% of the online payments in the UK. The Alternative Payment market is yet to take off here.

Germany – A global leader in Alternative Payment methods, as currently 66% of eCommerce purchases are made in this way. ELV (a form of direct debit payment) makes up a huge 28% of the market.

Netherlands – Whilst the eCommerce market is relatively underdeveloped here, two thirds of payments are made using APs (66%) – the vast majority using iDEAL, a native real-time bank transfer.

France - Many online customers use Carte-Blue (a debit card that can also be used as a credit card) to pay for their ordered goods online. Other popular credit cards used in France are MasterCard and American Express. PayPal is also quite popular in this market.

The United States - The major trend here is the move toward mobile payments, as the transaction value in the USA reached a two-digit figure in billions of Euros in 2012. This figure is expected to grow further as mobile commerce increases and more stores accept this form of payment.

China – An AP called Alipay dominates in China with 60% of the market share, especially now that this company has launched a mobile wallet application, offering online-to-offline payments. Cash on delivery is also a popular form of payment in China, accounting for around 20% of the market. China UnionPay credit cards are also important for retailers entering the Chinese market, because as a card scheme, it is already bigger than MasterCard, and is forecast to be bigger than Visa this time next year.

India – Internet bank payments are the preferred choice here. Prepaid cards and cash payments are also popular, but mobile payments are gaining prominence due to the large number of mobile phone users in this region.

Asia-Pacific – Mobile payment methods are on the increase here too, with over two-thirds of those acquainted with the methods willing to use digital wallets and SMS payments in 2013.

Africa – The mobile payment market has outpaced banking services, with mobile payment users outnumbering the bank accounts holders in 2012, and more mobile payment outlets being present than bank outlets.

The Middle East – The number of online payment providers increased in 2012, while the cash-dominating economies in these countries are expected to experience a more substantial growth in online payments when banking services become more widespread and regulations more encouraging. In the Middle East PayPal started to accept locally issued bank cards in 2012, planning to double its market share in the region by 2015.

A report from WorldPay earlier in the year revealed that alternative payment methods are growing at an exceptional rate, and today account for 22% of all global e-commerce transactions, amounting to 165 billion Euros. It is estimated that there are over 300 AP schemes operating globally including: real-time bank transfer, offline credit transfer, direct debits, eWallets, paper-based payments and mobile payments. The AP market is expected to continue to grow until it outstrips that of traditional card payment schemes.

Overall, alternative payments are on the rise. In 2013, the amount of payments processed as APs were up 22% and it is estimated that alternative payments will account for 59% of all online transactions in 2017. 61% of online customers have greater confidence in a website that offers them a choice of domestic payment methods in a secure shopping environment. 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!

The post It pays to know your customer – Online payment methods appeared first on Capita Translation and Interpreting.

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