With a highly developed banking infrastructure and a growing maturity of the market, Western Europe is flourishing.
The region is home to 19 different countries that boast an average annual income of around $55,000 (compared to a world average of below $10,000) as well as a wealth of diverse cultures and payment methods to match.
Western Europe’s more sophisticated and established banking infrastructure gave shoppers the opportunity to purchase a staggering $475.7 billion worth of goods and services online last year.
The opportunities in Western Europe are almost endless for UK merchants to boost their cross border sales, but only if they understand that the different payment cultures in each country across the region vary.
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Credit cards are indeed, still a common way to pay for goods and services online, however they are not equally favoured in all countries as alternative payment methods are becoming more prevalent throughout the region.
Know your payments
It’s vital that UK merchants are aware of the alternative payment options in Western Europe. With this in mind, PPRO Group have produced an extensive global alternative payments guide, which sheds some light on how differently shoppers behave at the online checkout in each country.
Take the Netherlands, for example, around 65% of all transactions are carried out using the iDEAL online banking system.
German and Austrian shoppers on the other hand prefer payment on account, via direct debit and PayPal while in Finland around half of online purchases are made via online bank transfer, and almost 1 in 5 online transactions in Portugal are paid by offline bank transfer.
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PPRO Group’s research has discovered that Western Europeans are sticking with their preferred local established payment methods and providers including Sofort, enter cash and iDEAL as opposed to paying for goods with their credit or debit cards, or even embracing newer, innovative payments methods such as e-wallets (only 19% of Western Europeans use e-wallets).
The exception to this is that nearly a quarter of Norwegians (23%, so higher than the Western Europe average) use e-wallets to shop online.
On the other hand, the Swiss are dismissing digital wallets in favour of paying by credit cards, and are frequent spenders, with the average online shopper spending $3,190 year. These are all important factors for UK e-commerce merchants to think about before selling cross-border in this region.
The need for mobile optimisation
Merchants must also ensure that every online customer touchpoint is mobile-optimised, as the penetration of smartphones is high across Western Europe.
In fact, 70% of Western Europeans now own a smartphone, which is considerably higher than the global average of 42%.
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Those UK e-commerce merchants looking to enter the Nordics or Dutch markets especially need to make sure their online check-out procedure is mobile-optimised, as 77 per cent of Norwegians and 76% of Swedes and Dutch people currently own a smartphone that will be used on regular basis for purchasing goods online.
Stepping into warmer climes
87% of Spanish online shoppers favour credit and debit cards, so UK merchants shouldn’t dismiss these payment methods.
The same goes for those in Sweden, with 53% preferring to pay with this method but also useful to bear in mind is a growing popular alternative payment method, Klarna, a Swedish company that allows shoppers to pay for their purchases through online banking, invoices and instalments.
Thanks to the European Single Market, consumers are very happy to make cross border purchases online, so the opportunity for UK e-commerce merchants to succeed across the channel in Western Europe is huge, but local knowledge and engagement are vital.
Sourced by Ralf Ohlhausen, business development director at PPRO Group
