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Payment in European e-commerce: What retailers should keep in mind

by Editorial Office

A well thought-out combination of payment methods is particularly important in cross-border e-commerce. Using the examples of Great Britain, Germany and France, we explain why retailers should increasingly adapt to local customer needs – and why it often makes sense to cooperate with local service providers.


Payment in Europe: Knowing regional preferences

The payment world with its multitude of options can certainly challenge international online retailers on the domestic e-commerce market: It takes time and know-how to put together the right payment methods. Those who want to gain a foothold in the three large European e-commerce markets of Great Britain, Germany and France must devote even more attention to this topic. How can the trust of consumers be gained in the respective markets? Adapting payment methods to the latter seems to be essential. Meeting country-specific preferences prevents customers from abandoning their purchases shortly before checkout – and promotes customer loyalty.

When it comes to selecting the right payment methods, it makes sense to work with payment service providers. They know local preferences, combine appropriate payment solutions for online stores, and optimize handling processes.

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Online payment in the UK

British consumers are considered to be particularly Internet-savvy and they enjoy shopping. The British score top of the European rankings when it comes to buying goods online and using digital payment options: According to figures from RetailX’s Europe 2020 Ecommerce Region Report, 90 percent of British Internet users of all ages shop online.

With the widespread acceptance of large online marketplaces such as Amazon, which customers perceive as trustworthy, digital payment methods have grown significantly in popularity in recent years. The corona pandemic continued to reinforce this trend. One-third of consumers (32 percent) prefer to use digital or mobile wallets such as PayPal when shopping online. It also remains common to pay by debit card (29 percent) or credit card (23 percent). Other payment methods such as bank transfer (6 percent), cash on delivery (4 percent) or “buy now pay later” (3 percent) are used far less.

Great Britain: Mobile payment via smartphone

The affinity of British consumers for digital payment methods can also be explained by the fact that contactless payment via smartphone has been promoted in everyday life for a long time – for example, when using public transportation. Consumers have experienced how convenient and secure mobile payment processing can be in transit situations and have integrated it into other areas of their everyday lives, such as online shopping.

In Transformation: Online Payment in Germany

Just a few years ago, purchase on account was the undisputed favorite of Germans when it came to online payments. In 2018, at 28 percent, payment after having received the goods had the largest market share among payment methods.. This was based on the decades-long tradition of ordering goods from the catalogs of major mail order companies such as Otto. Alas, the picture has turned: Around one third of local e-shoppers (36 percent) now prefer to pay digitally – for example, via PayPal or with a digital Giro Card integrated into the smartphone – a solution that can be used by savings bank customers, for example.

Payment mix in Germany

In the days of Corona, consumers got into the habit of making contactless payments in retail stores – a development that is continuing in German e-commerce – and transcends generations. Studies show that older consumers are also increasingly open to mobile payments.

However, international online retailers should still consider purchase on account – just like other classic payment methods – in their payment mix:  According to the RetailX report cited above, purchase on account comes in third place in the German payment ranking at 19 percent, after direct debit (21 percent) and ahead of credit card (15 percent).

Germany: Growing confidence in mobile payment

In order to benefit from the increasing confidence of German e-shoppers in mobile payments, leading credit card companies have provided their own wallet with Click-to-Pay. The new digital payment method, which began with Secure Remote Commerce (SRC) and is already in use in the USA, is soon to be available to German and European consumers. Industry experts expect it to become increasingly popular. One of the reasons for this development is convenience: anyone who clicks to pay in the checkout area of an online store can select one of the stored cards directly and initiate a secure digital transaction. This meets the increased need for security that generally characterizes German consumers – data protection is an important concern for them.

Payment in France

Similar to the U.S., e-commerce payments in France are predominantly made by card. Eight out of ten consumers prefer this payment option. The local Carte Bancaire, an interbank payment system, remains popular. International e-commerce providers who want to sell in France should therefore offer payment by Cartes Bancaires along with other common credit cards. Other classic payment methods are less relevant: While one in ten e-shoppers still makes purchases via online banking, offers such as Bank Transfer or Consumer Credit (4 percent each) are used only rarely and mainly for high-priced products. In contrast, there is an upward trend in mobile payments: the increasing use of smartphones and tablets is changing the shopping and payment behavior of French consumers.

French m-commerce on the rise – and so is mobile payment

Compared with European e-commerce markets such as the UK, Scandinavia or Germany, France is still lagging behind in mobile payments, but with increasing sales in m-commerce – which is expected to develop four times faster than conventional e-commerce – digital wallets are also gaining in importance in La Grande Nation.

With a market share of more than 20 percent, e-wallets are now the second most popular payment method. PayPal in particular, with its good reputation for security, is popular. New providers have yet to gain this trust and prove that they offer appropriate buyer protection. International online merchants should keep an eye on developments in the payment sector and, if necessary, include new payment methods in their own offerings.

Payment in Europe

Economic success in cross-border e-commerce depends to no small extent on the payment methods offered: International providers should position themselves with mobile shopping experiences and payment options in order to benefit from the boom in the e-commerce markets of the UK, Germany and France.

When compiling the payment mix, however, it is still important to comply with classic payment methods such as purchase on account (Germany) or credit card (France), which have grown in importance for local consumers. The focus is on convenience and security – both on the marketplaces and in the online stores of brands and retailers.

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