The days when online merchants could only offer a credit card payment option are long gone by. Today, online customers expect to be able to choose from a variety of ecommerce payment options whenever they are in the payment processing stage. So which payment methods are right for your ecommerce site, and what payment gateways will you need to support them?
Statistics vary from region to region across the globe as to the preference for payments.For instance, US customers prefer credit card payment above all, Read on and find our what European, Asians, and African country customers prefer.
Preferred online retail payment methods worldwide.
Global online shoppers, at least 42 percent of them stated that they preferred to pay via credit card. Credit cards were the most popular payment method, ahead of electronic options such as PayPal.
Source: Statista
Online Payment preference in US
According to a survey conducted by Ipsos and ING, the leading online payment methods in the US are:
credit card (stored) - 45%
PayPal - 22%
credit card (manual) - 17%
Amazon Pay - 5%
Cash on delivery (COD) - 4%
Other payment providers - 3%
Google Pay - 2%
Apple Pay - 2%
As can be seen above, credit card is still the most preferred payment method by most Americans. It is also one of the most popular online payment method across the globe. PayPal came in second place, while other payment options like Amazon Pay, Apple Pay, and Google Pay were less used.
Online payment preference in Europe
Every country in Europe is different. So, it’s no surprise consumers of these countries have different online payment methods they prefer to use.
When it comes to paying for the goods they have ordered online, shoppers in Europe globally prefer to pay through digital wallets, such as PayPal and Alipay. Visa and Mastercard are also very popular, followed by domestic bank credit and debit cards.
Here are 3 facts about European customers payment preference:
Most prefer Digital Wallet(paypal, apple pay, amazon pay, ewallets, etc)
Credit and debit cards are more popular in Western Europe
Cash-on-delivery popular in Eastern Europe
Source: ecommercenews
Online payments preference in Asia
While paypal and credit card are popular mode of payments in asia, it does not take the top preferred method of payments. COD and cash payments are still the number one payment preference in Asia.
Source: paypalobjects
Increasing Internet penetration and smartphone ownership are making people more open to exploring new payment methods that can replace cash. Of those surveyed, 35% said they use mobile wallets and 13% use contact-less payments via mobile phones.
However, cash continues to remain the top preference. When asked which payment method they used most often, 57% answered cash, compared to 12% who said e- or mobile wallets and just 1% who cited contactless payments via mobiles.
Online payment preference in Africa
Although the statistics vary, at first glance it appears that South Africans still favour paying via credit card. Statista (see the graph below) says the current figure for credit card e-commerce payments is 45%. This is followed by Debit Cards.
Source: comalytics
So before deciding on what payment method to use, evaluate your business first.
What factors should influence the choice of ecommerce payment methods?
There are several factors you need to take into account when deciding what ecommerce payment methods to offer. Let’s take a look at some of those.
#1. Who your ecommerce customers are
This will vary hugely depending on who your customers are, so it pays to know your customer segments. You might like to look at:
Their demographics, such as age, income and education level: For example, older customers may prefer to stick to what they know (probably credit cards), rather than experimenting with something new and (to them) unproven
Where they live – internationally or locally: For example, some people tend to be security conscious and risk averse, so safety and security may appeal to them rather than convenience and ease of payment.
How they use their devices and their level of connection to the internet: For example, some people are connected all day while they are out and about. They are attracted to convenient ecommerce options they can take advantage of from their mobile, wherever they happen to be.
Their access to bank accounts, and credit and debit cards: For example, in a less develop countries, many individuals and small businesses don’t have credit or debit cards. They may prefer to pay in cash or do online payments through eWallets.
Their lifestyle: For example, Millenials are very internet-savvy and open to alternatives. They especially like a transaction method to be quick, safe and easy, so they can get on with their lives. If it’s innovative, like ewallet, even better.
#2. What type of product are you selling
Payment for most of the myriad of products and services available online falls into one of two categories:
One-Time payment: This applies to products and services that are purchased only when they are needed e.g. a new music system or the re-upholstering of a piece of furniture. For these, the more secure options you provide the better. Your customer should easily be able to find their preferred payment method and complete the transaction.
Recurring payments: This applies to products that are purchased regularly, for example, a weekly box of organic vegetables, or services that are ongoing, such as subscriptions or rentals. For these, it’s best to provide additional options that are less vulnerable to things going wrong, like identity fraud or a credit card reaching its expiry date, for example. Methods such as direct debit payments also reduce the chances of customers opting out of contracts and simply not paying.
How many e-commerce payment options are ideal?
It’s best to offer several payment options to make sure you cover your ecommerce customers’ needs. If they can’t see an option that works for them, you may lose the sale. On the other hand, if the process of checking out becomes too overwhelming or confusing, you again run the risk of abandoned carts.
We highly recommend that you speak to the payment gateways yourself as you gather information at a specific point in time.
Contact us to find out more about integrating your ecommerce site with international payment gateways.
In conclusion...
Although there are numerous ecommerce payment methods out there, some will work better for you than others. The key is to know your customers and your business, and to tailor your choices accordingly. The right options, well displayed and explained, will gently ease your customers to conversion, boosting your sales along the way.
What ecommerce payment methods do you prefer to use when shopping online? Share your thoughts and experiences in the comments below.
