May 12, 2005, 12:00 AM

Europeans have access to – but don’t use – alternative payment systems

Only about 14% of Europeans aware of alternative payment methods have used one, a Forrester study says. Adoption is highest where alternative methods deliver something shoppers can’t get with cash or credit cards, such as using PayPal to buy on eBay.

Though alternative payment methods such as gift cards and deferred billing are increasingly available, U.S. consumers most often still use credit and debit cards when paying for online purchases. It’s the same in Europe, according to a recent report from Forrester Research: on average only 14% of European online consumers who are aware of any alternative payment systems have used it.

In a poll of consumers in France, Germany, Italy, Spain and the Untied Kingdom, about half of consumers surveyed were aware of at least one alternative payment system. Awareness was highest in France, with about 80% of consumers aware of at least one locally offered alternative payment system; followed by Germany at 70%. Germany also leads in terms of the number of consumers using an alternative payment system: about one in six German consumers last year, Forrester analysts found.

In the U.K., 13% of consumers reported using an alternative payment method – chiefly PayPal – though only 29% of those polled were even aware of the existence of alternative payment methods. In countries where awareness of alternative payment options was higher than in the U.K., use of alternative payments was much lower.

Forrester believes adoption rates will remain low unless using alternative payments gives consumers something they can`t get by using credit cards or cash. The U.K.’s relatively high adoption rate is largely from consumers using PayPal to buy on eBay, for example.

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