Payment choice is a customer demand retailers and marketplaces simply cannot ignore. As a result, European merchants have started offering five payment methods at checkout on average, although many are looking to increase this, according to new research by Aion Bank, the subscription-based, digital bank, in partnership with Vodeno, the API-based, cloud-native platform.
The analysis assessed the payment options available at checkout for the top 50 non-food retailers and marketplaces across Europe. While credit and debit cards remained dominant, offered by 100 per cent of retailers, digital wallets such as PayPal (84 per cent) and Apple Pay/Google Pay (62 per cent) are now widely adopted, reflecting the increasing demand from consumers for digital payments. Looking specifically at the UK, retailers lagged European counterparts – with only four payment options offered on average.
While the hype may have died down from what it was a few years ago, buy now pay later (BNPL) is still proving to be incredibly popular. BNPL and other ‘Pay in 3’ services are now seen as a normal offering and are offered by the majority (70 per cent) of Europe’s top 50 retailers.
This makes it the third most popular payment option overall. Given that 40 per cent of consumers, rising to 50 per cent amongst those in the 25-35 age group, will remain loyal only to brands that provide financial benefits like BNPL and cashback, brands that offer such services stand to gain.
More is on the way
The data also reveals the emerging payment options not yet widely offered. Only 18 per cent offer some kind of A2A or bank transfer, which facilitates instant payments for customers and removes inconvenient pending transactions. Despite the growth in mobile banking and popularity amongst Gen-Z consumers, only four per cent of these bank transfers offered the option to pay through A2A mobile payments – using one-time push notifications through an app, to complete purchases.
Neil Chandler, CEO of Aion Bank, said: “Customers expect choice when shopping online and if the payment experience doesn’t match the customer journey, they will take their business elsewhere. Providing this experience enables retailers to deepen the relationship with the customer, giving them choice and inspiring greater loyalty.
“Customers don’t want a loan, they don’t want a credit card, and they don’t want a mortgage. They want a holiday or a pair of jeans, or a house. And in difficult economic times, offering the right financial solutions at the right time can help them achieve this, but it is important to remember that rigorous affordability and responsible lending practices are crucial in order to get the right customer outcomes.”
