by Guest Authors
April 04, 2016

Invoicing is the most popular online payment type in Germany, but as the recent “ECC payment study vol. 20” has revealed, Germans are not as taken with it as they once were. Alternative payment methods such as credit card payments have won ground with consumers

By Sabrina Mertens, ECC / IFH Köln

Online retailers currently offer their customers an average of 5.3 payment options. This was one of the findings revealed in the “ECC Payment Study Vol. 20”. The number of payment methods offered by online retailers has therefore remained relatively stable in comparison with last year’s survey.

The continual expansion of payment options available to online shoppers on company websites evident up until 2011 has therefore not continued. Online retailers in Germany seems to have found “their” payment mix for the most part. However, this does not mean that they will simply ignore innovations on the payment market or evolving consumer wishes: portfolios will be consistently further optimised and, from time to time, innovations will be checked and payment methods replaced.

German customers are now increasingly paying by credit card

ECC Payment Studies have in recent years shown that four payment types have predominantly become established among online shoppers. Consumers most often use invoicing, PayPal, credit card or direct debit to pay for their online purchases. However, a glance at the most popular payment methods (c.f. image) shows that ‘SOFORT Überweisung’ is also gaining in popularity in Germany. While, as before, invoicing – consumers’ absolute favourite for a long time now – may still be top of the pile in terms of the most popular payment types, it has recently declined in overall favour.

Other popular payment methods were able to attract new fans among consumers. In this regard, PayPal in second place is further closing the gap in invoicing. At the moment, four in ten consumers prefer to use invoicing for their online purchases; however, the corresponding figure in the last survey was one in every two consumers. In the meantime, around 31% of online shoppers now prefer to use PayPal, a rise in popularity among shoppers equating to approximately 2.5 percentage points.

Security and no additional fees – what do payment methods have to offer?

The most popular payment types fulfil the basic requirements of German consumers: security, no additional fees, data protection, ease of use and simple refund procedures. A comparison between invoicing and PayPal reveals that invoicing leads the way in terms of security, usage costs and data protection. However, PayPal scores well for the fact that it’s simple and convenient to use in addition to a straightforward refund procedure.

Furthermore, speed is important to German consumers who often buy online. In an ideal world, the payment process should be completed during the purchase. A simple, one-time registration process for an online shop, international acceptance as well as simple and convenient smartphone/tablet compatibility are also important features.

Online payments set to become even quicker in future

No wonder, then, that one of the groups with a particular preference for invoicing are the “rare shoppers”: they use the internet to make purchases a maximum of once per quarter and especially pay attention to security. Nearly 45% of “rare shoppers” expressly prefer invoicing when paying for their online purchases. Invoicing is also the number one choice for an above average proportion of shoppers aged 50+ (49.8%) and for consumers with little trust in payment service providers (47.1%). Conversely, PayPal appeals to consumers who prioritise speed and convenience: these are primarily “heavy shoppers” (39.6%).

However, as consumers are shopping online ever more frequently, we are expecting that invoicing will become less relevant in future.

Distinctions in the payment market will become increasingly difficult to spot. Payment service providers with plans to conquer the market will have to consider in detail what their exact strengths are. Everything else in the study!

Sabrina Mertens is Head of ECC Köln which is part of the IFH Köln market research group. As an industry insider, IFH Köln supplies information, research and consultancy for market research-relevant questionnaires in the digital era.