One of the findings that struck me most during our research was the growing popularity of PayPal. That PayPal is used by many online shoppers across Europe is well known, and partly explained by the success of eBay. What struck me as new is how many big European online merchants now accept PayPal, among them leading fashion retailers and airlines. Perhaps I didn't spot that sooner because the British merchants have been much slower to adopt than those in Italy, Germany, France and Spain.
The growing acceptance of PayPal raises questions for two groups of eBusiness executives:
If you work at a retailer or other merchant, is it time you accepted PayPal payments online?
If you work at a bank or card issuer, what does the growing use of PayPal mean for your relationships with your customers?
For both groups, what payment methods are customers likely to want as they start buying from tablets and mobile phones?
What do you think?
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I have a great interest in history. I always have.
I grew up in the North of England very close to Hadrian’s Wall. In fact, the remains of the Vallum (the defensive ditch dug behind the wall to keep out marauding Pictish warbands) ran through the playing fields of my high school. I grew up wondering what far-flung Legionaries had stood on that wall on cold northern nights. Imperial citizens from Rome itself. Germanic mercenaries from the Rhine. Gaulish Auxiliaries from France. A constant reminder of the diversity of people, cultures, and beliefs that made up the Roman Empire.
So history has wound on, through war and peace, trade and intrigue, to bring us to 21st century Europe. We have a European Union. A single currency. We even have a flag. So Europe is well, Europe, right?
If history has taught us one thing, it is that a massive diversity of language, currency, habits, attitudes, and beliefs thrives in Europe, and this directly affects the way in which Europeans (or rather British, German, French, Italian people, etc. -- because we are all different) use the Internet to shop. What they buy online, how they pay for it, how it’s delivered, and what their service expectations are, are to some extent shaped by the eCommerce offerings of retailers within their respective countries, but in a large part are led by national culture and behavioral norms.
Forrester’s Technographics® shows that online European consumers have lost their trust in traditional media as an information source. A low 30% of online Europeans state that they trust the TV as an information source. The traditional media that Europeans see as most trustworthy are radio and newspapers. About one-third agree that they trust newspapers as an information source. Funnily enough, this number varies significantly across European countries: 45% of French Internet users trust newspapers as an information source — a number that is almost three times as high as the 16% quoted by their UK counterparts!
In fact, consumers trust consumer reviews and price comparison Web sites more than manufacturers' Web sites. But what does this trust mean? How influential are consumer reviews in the purchasing process? About one in 10 online consumers takes consumer reviews specifically into consideration when making a major purchase. Information sources that influence them most in the purchasing process are going to the shop (34%), talking with family and friends (24%), and the retailer’s Web site (13%). And although we see some differences in the percentages reported by country, these top three are the same everywhere.
I am intrigued by last week's announcement from UK payment processor VocaLink and Australian financial software vendor eWise that they are collaborating to build an online banking transfer payment system for the UK. Online banking transfer systems make it (fairly) easy for online shoppers to authorize payments through online banking by integrating the payment details into their bank's secure online banking site. The customer is routed directly from the merchant's site to the bank to authorize the payment and back again.
In the Netherlands, the iDEAL online banking transfer system has been highly successful. It's now used by some 10 million Dutch online shoppers for about 5 million transactions a month. But the UK's online shopping market is different to the Dutch one in a couple of important ways. Firstly, debit cards can be used to pay online in the UK. Since almost all adults have a debit card, paying online is not a big problem in the UK, unlike many other European markets. Secondly, UK Net users have always been relatively complacent about online security compared with other Europeans. That means that one of the primary attributes of an online banking transfer system -- more robust security -- may not cut that much ice with British online shoppers.
Forrester has long argued that any new payment system needs to overcome three hurdles to succeed: providing a clear improvement over the existing alternatives, driving consumer and merchant adoption, and developing a viable business model for all parties.