ePayment Decisions - The Answer is in the Mix

ePayment Decisions - The Answer is in the Mix

17. September 2014

eCommerce is easy - at least if one believes the popular equasion "more payment methods = more sales"

As an experienced merchant you might know that the reality of online trades is more complex than that. It seems logical that revenues will increase if more payment methods are activated. However, implementing a wider variety of payment options also means more efforts and higher maintenance. The conflicting priorities are obvious: every additional payment method means more effort and cost. Hence the main goal is to find the right combination to optimize the revenue (i.e. the increase in sales) while keeping expenditures in mind.

Indeed, sales increase by 23,1 % with every additional payment option (Source: Payment im E-Commerce – Der Internetzahlungsverkehr aus Sicht der Händler und der Verbraucher (IZ 2013), A study by ECC Köln, available here:

However, the study also shows that „according to a recent survey, eight in ten online customers regard the option to pay with their preferred payment method as an essential criterion for completing a purchase. Consequently, transaction cancellations are more likely when this payment method is not available. In turn this leads to shortfalls in sales. Which method a customer favors depends on a variety of factors such as nationality, age, gender, online shopping experience, the used device as well as the price and nature of the purchased item.
Therefore it is not exclusively the number of payment methods that makes the difference. Instead it is important to know the customers and to make the methods they prefer available to them.

Different Target Groups - Different Payment Methods

The ideal combination of payment methods is primarily dependent on the identified target group for the online shop. The most important characteristics are gender, age structure, regional distribution, income etc. Along with these socio-demographic factors there are other influences to be considered: What is the percentage of regular customers? Is the shop aimed at more experienced or new online customers?
These data from the ECC Study's findings support the importance of target groups (Source: IZV11, 2013, ECC Handel):

- Women show a higher need for security than men: 52,8% of surveyed women prefer to buy at a shop they are already registered at. In contrast, 51,8% of men would change to a shop with better prices, even if they have to set up a new account.

- Services like sofortüberweisung.de are most popular with online customers under the age of 25 whereas the target group 'Best Agers' (age 55+) favors purchases on account.

- Customers with higher incomes prefer to pay by credit card. Unexperienced customers value the security of purchase on account.

The Importance of the Sales Mix

In addition to the factors mentioned above the sales mix plays an important role in choosing the ideal range of payment methods. Along with the price, the nature of the goods is highly relevant - are they consumer goods or services?

Study findings support this assumption (Source: Studie Erfolgsfaktor E-Payment, 2013, ibi research):

- Offering the option to pay by credit card as well as by prepayment - as opposed to exclusively using prepayment - decreases the number of transaction cancellations by 71% for inexpensive products and by 64% for expensive products.

- The combination prepayment + purchase on account decreases cancellations by 78% for digital goods. With a decrease by 83% this effect is even stronger for services.

Consultation Can Make the Difference

"One size fits all" is not a formula for success in the fashion industry and the same applies to "one payment mix fits all" when looking at a successful online shop. One can conclude: The ideal payment mix has to be defined individually, by carefully analyzing the structure of a shop. Hence consulting a professional offers 'valuable' support - in the true sense of the word.
Contact your Payment Service Provider to assess which payment mix is the best solution for your shop. The payment modules by sellXed already ensure that the expenditures for activating payment methods in your shop are as low as possible. All our payment modules include all methods offered by the Payment Service Provider - and they can simply be activated by a click.

Further information can be found here: