The selection of the methods of payment offered is a complex task for every online retailer. After all, the mix has to be custom-tailored to the respective clientele. In its study “Online-Payment 2017”, the EHI Retail Institute has now determined the preferred methods of payment – at least for all German e-commerce customers. As in previous years, purchase on account was the dominant factor in 2016.
In order to find out the preferences of German e-commerce customers, the EHI Retail Institute has analysed the shares of the various methods of payment in the turnover of Germany’s 1,000 top-selling online shops. The result was that almost every third euro (30.5 percent) earned in 2016 in German online retail was generated by a purchase on account. Thus many customers prefer to pay for their order after receiving the goods. For companies, however, the anticipated shipment of items carries an increased risk of default. This may explain why, despite the popularity of the method of payment, only two out of three online shops (67.7 percent) offer a purchase on account.
On average customers can choose between seven methods of payment
Nevertheless, the variety of methods of payment offered in German online shops is still high: on average, customers can choose between seven different methods of payment. Most often online retailers integrate e-wallets such as PayPal and payment by credit card into their webshop. Although these methods of payment have also established themselves with a revenue share of 17.9 percent (PayPal) and 12.2 percent (credit card), they have so far not nearly reached the importance of purchase on account. Instead, they ranked third and fourth in the ranking of the methods of payment with the highest turnover shares after the direct debit (20.2 percent).
According to this study, more than four fifths of German e-commerce turnover (80.8 percent) are generated through the four most popular methods of payment. Other methods of payment such as hire-purchase (4.5 percent), advance payment (4 percent), Sofortüberweisung (2 percent) and cash on delivery (1.9 percent) occupy only a marginal position. Paydirekt, the joint payment service introduced by the German banking industry in 2015, has so far also played a minor role. Nevertheless, the relevance could increase in the coming years – 34 percent of the surveyed retailers say they intend to integrate Paydirekt into their online shop by the end of 2018.
Image source: Fotolia – Andrey Popov