It’s all in the mix


Supporting local payment methods is a simple and effective way to increase e-commerce conversion rates and reach. So why have so few traders embraced the opportunity to internationalise their business? By excluding certain payment options you are limiting your sales opportunities, because some customers will have no choice but to leave without purchasing what they wanted. They will simply go elsewhere – and probably will not bother coming back to you. You might not think that any merchant would damage their own business in this way. But most online traders do exactly that – whether they are retailers, travel companies or service providers.

Proven correlation between conversion rate and payment method:

Recent studies have shown a clear link between conversion rates, customer reach and the right mix of electronic payment methods. 83 per cent of online shoppers have said that choosing between different ways to pay is important to them, while 42 per cent declared that a wider range of payment schemes would result in them spending more.

The message is clear: merchants need to offer a wide range of online payment methods that meet customers‘ expectations and needs if they want to increase site traffic and revenue. For international online stores in particular, a variety of payment methods is a key success factor.

Across the world, credit cards are still the most common way to pay for goods and services online, but they are not equally favoured in all countries. Alternative payment methods – i.e. payments that are not made by credit or debit card – are becoming more and more popular around the world. In 2013 alone, transactions using alternative methods increased by 21 per cent compared with 2012, with a further prediction of alternative payments accounting for 59% of all transaction methods by 2017. Analysts agree that the share of alternatives will continue to increase in the coming years. Payment method preferences vary by region first and foremost, but also by target group and product Group.

But does this mean that you should just offer 20 or more online payment methods at checkout to be on the safe side? Unfortunately, it is not that simple. E-commerce merchants have to take a number of payment factors into account to ensure the success of their online shop:

Ӣ Offer each market its preferred payment methods Ӣ Know and support the payment preferences of your target groups Ӣ Ensure your checkout page is clearly structured

It‘s all in the mix:

Ultimately, it is not about the number of payment methods offered – the key is to find the right mix for each market and target group. In the ideal checkout, the choice of payment methods offered will vary – based on the user‘s country at the very least.

For most US-based customers, credit cards, an e-wallet, possibly ACH (Automated Clearing House) and a cash option for those without a bank account should suffice. In the Asia-Pacific region, which is projected to overtake the USA for e-commerce sales in 2014, e-wallets have a particularly large market share at just over 40 per cent.

German customers are fond of payment on account, direct debits and PayPal; in Finland around half of online purchases are made by online bank transfer; almost one in five online transactions in Portugal are paid by offline bank transfer; and around 45 per cent of Russians favour cash on delivery.

Selecting the right payment partner:

Discovering the best payment methods for particular markets and target groups is costly, time-consuming and requires a certain level of experience. That is why online retailers usually turn to payment solution providers (PSPs). Ideally, PSPs should not only provide a wide-ranging portfolio of payment methods, but also offer valuable experience of international markets.

Looking beyond technical onboarding and transaction performance, factors such as experienc


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