European cross border commerce is booming, with growth rates amongst those international enabled retailers often outpacing their domestic counterparts. However, each region within the European eCommerce market has its own particularities, and adapting to these becomes paramount if you want to achieve the full potential of your business with customers that have different habits to your domestic buyers. Which payment methods are offered online is a critical strategic move and clearly one of the key localisation success factors that international retailers must consider. Credit Cards and PayPal are widespread through practically all European markets, being the two main (and many times only) payment methods, but their share changes depending on the country. According to eBay Enterprise data:
- UK: since 3 years ago PayPal has been stealing share to credit cards. At the end of 2011 about 10% of the Payments were made with PayPal, while currently it is approaching 20%.
- Spain: similarly to the UK, PayPal is steadily gaining share, now holding 1/5 payments share.
- France: credit cards remain constant over the past years with a share of payments at 86%, and PayPal holding 14%.
On these three countries, numbers seem pretty similar to the US, where according to eBay Enterprise data 80% of the payments are made with Credit Card and 20% with PayPal. However, the situation is very different in other European markets. For example, in Germany (the second largest e-com market) our figures show that only 10-20% of the orders are placed with cards. In Germany, Sweden and other Nordic countries, Open invoice (granting the customer credit to pay after receiving their order) is also a very important tender type. Real-time banking is also popular in Germany, Austria, and Netherlands. The importance of cash-on-delivery is paramount in less mature e-com markets (Russia and many Eastern European countries) which usually have very low penetration of credit cards. In other countries like Italy, pre-paid cards are very popular. Portugal has its own payment method which accounts for 90% of online payments: Multibanco, allowing buyers to pay for the order on the ATM or the online bank. So if you are planning to take the most out of the different European markets, make sure you consider local payment methods! In the next two posts of this series we’ll review Real-time banking and Open invoice.