The world’s third largest region by B2C E-Commerce sales shows wide diversity in terms of payment methods used in online shopping. While non-cash payment methods, especially credit cards, dominate in the Western sub-region, cash on delivery and various alternative methods are most used in Eastern European countries. Both sub-regions show potential for mobile payments growth.
Europe’s largest online market, the UK, was dominated by credit and debit cards in terms of payment methods in 2014, while a quarter of online shoppers dropped the purchasing process if their preferred payment method in not offered. Moreover, over one fourth of Internet users in the UK are interested in using mobile payments, with the mobile payment offerings growing rapidly in H2 2014: Vodafone launched SmartPass in cooperation with Visa, while the joint mobile effort of banks, Paym solution, signed up 500,000 users in the first month after its launch.
In Germany, PayPal and express checkout methods were gaining a larger share of B2C E-Commerce payments in H2 2014, and Amazon offered “Login and Pay” method. Invoice remained the leading payment method in German B2C E-Commerce sales, while PayPal increased its share. Mobile payments in Germany are forecasted to grow rapidly in the next several years in Germany to near one billion Euros in the next five years.
The payment method used the most by online shoppers in France was “Bank Card” at the beginning of 2014, followed by “Online Payment Service”. The ecosystem for mobile payments is developing rapidly, while adoption by consumers is still to take off.
In many other Western European markets, including Italy and Spain, credit card remained the dominant method. However, several countries have own specifics: in the Netherlands, for example, local banking method iDEAL accounts for more than half of all online purchases and in Sweden payment against invoice is used more than credit card in B2C E-Commerce.
In Russia, cash remained the most used payment method in online shopping, while alternative payments showed dynamism in H2 2014: payments made through online banking grew, PayPal started accepting cash payments through stores, terminal payments and E-Wallet company Qiwi held SPO raising EUR 60 million and another popular wallet Yandex.Money cooperated with Alibaba’s Aliexpress. While Cash on Delivery remained the most used payment method, half of Internet users already have experience with online payments and a significant share plans to do so more.
In some other Eastern European markets, including Hungary, Romania and Belarus, cash on delivery is the most used method. However, there are also exemptions to this trend: in Turkey card payment dominates and grew rapidly in the first three quarters of 2014.
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