March 3, 2009, 12:00 AM

Credit cards gain as a payment method among European online retailers

Credit cards account for more than eight in 10 purchases at European online retailers whose transactions are processed by Deutsche Bank subsidiary Pago. That’s up 6 percentage points from a year earlier.

Credit cards are gaining ground as a way of paying European online merchants, and the Visa brand is gaining among credit cards, according to a new report from Deutsche Card Services GmbH, a subsidiary of Germany’s Deutsche Bank.

Credit cards accounted for 81.6% of purchases from European online retailers processed through Deutsche Bank’s Pago processing platform from October 2006 through September 2007, 6 percentage points higher than during the previous year, according to the report “Purchasing and Payment Behaviour in Online Retail.”

Another 5% of payments were made by offline methods, such as invoice, cash on delivery or prepayment. And nearly 12% of payments were made through direct debits to consumers’ bank accounts.

Among consumers in the United Kingdom credit cards account for 94.9% of purchases, with the remaining 5.1% being made with Maestro cards, a debit brand of MasterCard Worldwide.

German men use general-purpose credit cards, with such brands as Visa and MasterCard, for 50.4% of their online retail purchases. But German women use direct debits for 31.4% of purchases and retailer credit cards for another 42.7%, the report says.

Visa’s lead over MasterCard increased to more than 25% from 19% the previous year, according to the Pago report. Even in Germany, where MasterCard led a year earlier by 41.7% to 34.0%, Visa has pulled ahead to a lead of 44.4% to 35.4%. In other European countries, Visa’s lead over MasterCard is more than 36%, according to the Pago report.

Pago process transactions from some 6,000 online retailers in Europe. This report is based on an analysis of 7.5 million online retail transactions.

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