January 15, 2007, 12:00 AM

Internet shoppers in Europe are uneasy about making online payments

While 56% of European Internet users regularly shopped online last year, not all of them paid for purchases using an online payment method, according to a new report from Forrester Research Inc.

 

While 56% of European Internet users regularly shopped online last year, not all paid for purchases using an online payment method, according to a new report from Forrester Research Inc.

Among European consumers who purchased products and services online in the past three months, 24% used only offline payment methods, 64% used only online payment methods, and 13% used a mix of online and offline payments, Forrester says.

While credit cards remained the most popular payment method, only 40% of European online shoppers say they prefer using credit cards for online purchases, Forrester says. The United Kingdom had the highest number of online shoppers who prefer to pay with credit cards-60%-while in Germany, Europe’s second largest online shopping market, only 26% of online shoppers prefer credit cards. In Italy and Spain, 51% of online shoppers prefer using credit cards, followed by France (35%), Sweden (34%) and Netherlands (19%).

PayPal, eBay Inc.’s alternative online payment service, is increasingly popular among online shoppers in Europe, with 23% using PayPal to pay for web purchases. The UK has the most online shoppers using PayPal (35%), followed by Italy (26%), Germany (22%), France (16%), Spain (14%), and Netherlands and Sweden (both 11%), according to Forrester.

Despite the growing use of credit cards and PayPal, strong national preferences are making it difficult for European online retailers to offer a single online payment, Forrester says. For example, one-third of Spanish online shoppers prefer to use cash, in part because of worries about online transactions’ security. Almost two-thirds of Spanish Internet users who have never bought products online say they avoid it because they don’t want to give out personal information over the Internet, according to the report.

In France, checks are second only to credit cards-they’re used by 17% of online shoppers-while 56% of German online shoppers say they prefer making an electronic bank transfer when buying products or services on the Internet, Forrester says.

“To serve the online shoppers who like the convenience of paying online but don’t want to give out their personal financial information, online retailers should continue to promote new online payment options,” according to the report, “European Retailers Still Need to Offer Multiple Online Payment Methods.”

 

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