As ecommerce continues to boom throughout Europe, retailers are looking into optimising their online strategies and checkout processes to capitalise on consumers’ appetite for shopping. This means implementing seamless and secure payment solutions that are tailored to the specificities of each European market and streamlining the checkout experiences while balancing friction and security.
Looking into the habits of European consumers, payabl. has commissioned a pan-European survey of shoppers, analysing both the online and offline markets. The report ‘The state of European checkouts’ aims to discover what consumers are expecting from the checkout experience and how merchants can improve their payment processes to meet these needs.
According to the study, the average transaction value is GBP 53, with few resorting to expenses less than GBP 10 per transaction. Only 10% of consumers spend over GBP 100 per transaction, suggesting that these consumers might choose high-value purchases regularly, including electronics, luxury goods, or buying in bulk.
Online shoppers have become more disciplined in the past years, with most of them planning their purchases to benefit from discounts, bundling multiple items for convenience, or to avoid free shipping costs. Interestingly enough, some shoppers may choose a sustainable approach to ecommerce, with some consumers choosing to purchase less frequently to reduce package waste and lower their carbon footprint.
Impulse buying still occurs in some cases, as marketplaces and ecommerce platforms push for personalised recommendations and time-sensitive offers to create a sense of urgency.
Although preferred payment methods vary depending on the country, the payabl. survey mentions PayPal as the market leader, with 1 in 2 customers using it. Debit cards and credit cards follow shortly, being preferred by 39% and 33% of shoppers respectively. Other payment methods used for checkout include direct bank payment, gift cards, mobile wallets (Apple Pay, Google Pay), BNPL, local payment methods, or cash on delivery.
However, each European country comes with local nuances. For instance, in the UK, shoppers use debit cards in 63% of the cases, while in the Netherlands, a local payment method, iDeal, is the most popular way of paying, at 39%. In Germany, users prefer PayPal in 71% of the cases, followed by direct bank payments and credit cards.
The report also analyses the key factors considered by shoppers when choosing a particular payment method, with 50% of respondents opting for the fastest payment method. Convenience, security, broad acceptance, and the lack of additional feels also weigh in when deciding on the best payment method at checkout.
Habit and familiarity were among the least influential drivers, suggesting consumers are increasingly making active, informed choices at checkout. Thus, merchants are encouraged to partner with a payment provider that not only offers a wide array of popular payment methods but also takes into account each market’s particularities and provides a good balance between speed and acceptance.
According to David Birch, who served as a consultant on this report, PayPal’s rising popularity is in strong correlation with the brand’s strong policies and practices when it comes to security, buyer protection, and fraud protection policies.
Although ecommerce started its surge in shopping preferences during the COVID-19 pandemic, brick-and-mortar stores remained the most popular choice for customers to shop, especially after all health restrictions were lifted. The payabl. report shows that consumers choose different payment methods for in-store purchases than they use online. Out of those choosing a different payment method for in-store purchases, 60% resort to using cash. Contactless debit/credit cards are used by 41% of consumers, followed by chip and PIN debit/credit cards, mobile wallets, and loyalty points. This proves that cash is not dead but continues to remain an integral part of shoppers' in-store behaviour, even though it is not used for every transaction.
Incentives such as cashback, discounts, and faster checkout options may increase consumers’ willingness to try new payment methods.
When it comes to high-value purchases, consumers’ preferred payment methods change again, with 40% claiming they rely on credit cards. Buy Now, Pay Later (BNPL) services are also favoured as they allow customers to pay in 4 or 6 instalments without additional costs. These payment methods also provide an additional layer of protection, such as purchase guarantees or fraud prevention.
Users are adamant when it comes to a seamless checkout experience, as 43% of them would not return to a merchant’s website if they faced extra layers of friction. Other reasons that make consumers doubt their future purchases include the need to create an account to complete a purchase, unclear final costs, or particularly delivery costs appearing late in the checkout process. However, multi-factor authentication (MFA) plays a minor role in cart abandonment decisions, with customers viewing MFA as an extra layer of protection against fraud.
As technology advances and new payment methods appear, consumers’ expectations around online shopping are also shifting. Merchants need to stay ahead of these trends and adjust their payment strategies to enhance checkout optimisation and ensure client loyalty.
Clear communication on security measures and fraud prevention strategies;
Collaboration with trusted payment providers to implement fraud strategies without adding extra friction;
Full transparency when it comes to fees, delivery costs, account creation, etc.;
Introduction of guest checkouts instead of forcing consumers to first create an account;
A tailored array of payment methods taking into account market preferences;
Don’t forget to get your free copy of the report! Download it to discover more on checkout optimisation and preferred payment methods in Europe’s most competitive markets!
Irina is a Senior Editor at The Paypers, specialising in fraud and online payments. Leveraging her Ph. D. in Economics and a strong economic academic background, she constantly observes new developments in tech, innovation, and regulation, educating the audience about trends in fraud prevention, chargebacks, scams, social engineering, digital identity, GenAI, and ecommerce. You can reach out to her via LinkedIn or email at irina@thepaypers.com.
Established in 2011, payabl. is a leading financial technology provider with offices in Germany, the Netherlands, Cyprus, and the UK. The company offers a comprehensive range of payment products, including card acquiring, business accounts, integration to over 300 local payment methods, and POS terminals. payabl. offers its customers a high-tech, high-touch approach, providing future-proofed payment solutions to merchants from a wide range of sectors around the world. With unrivalled experience in helping clients navigate the complexity of an ever-evolving payments environment, payabl. is the trusted partner for the world’s most innovative merchants to unlock growth.
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