The UK’s top retailers are inhibiting their online sales potential by up to 30% by not offering a range of payment options for customers, according to a new study.
The study, carried out by e-commerce and digital agency Visualsoft, found that almost one in five (19%) of the UK’s top 240 retailers are failing to offer a payment choice aside from a mainstream credit or debit card. This is despite prominent research indicating that offering at least three payment options can increase conversion by 30%.
Customers are used to using alternate payment methods in countries like s Holland where payment solution iDEAL, processes around 55% of transactions. iDEAL was introduced in 2005 and offers a real-time payment method for retailers to accept online payments.
This could prove crucial in a post-Brexit era, when providing US shoppers with their most popular payment option and charging in dollars could pay dividends.
According to the study, allowing non-bank card payments, including vouchers and mobile payments, can also increase the appeal of sites. It can increase customer’s confidence in purchasing and increase the speed of their purchase.
The report found that PayPal is the most popular alternative payment method, with 71% of retailers offering this alongside a traditional credit or debit card. Visualsoft data also shows that retailers offering PayPal usually see around 25% of customers using this option.
Consumers see PayPal as very secure payment method which gives them confidence when purchasing goods.
Vouchers, however are less popular, with only 8% of retailers allowing customers to use gift cards or other common voucher types. Multi-store vouchers such as Love2Shop and One4All are among the most popular vouchers in the UK.
International growth may also be limited, with 38% of retailers offering no option to pay with international currency. Lack of local payment options for international customers can lose sites up to 13% of customers, according to some industry estimates.
According to iDEAL spokesperson, consumers are more likely to convert when they are able to view the cost of an item in their own currency which like PayPal gives them the confidence when making purchases without having to worry about further charges or fees.
Tim Johnson, chief sales officer at Visualsoft, said: “It’s the final – and potentially most critical – stage in the purchasing cycle, so it’s surprising that so many of the UK’s biggest retail players are limiting their conversion potential by overlooking the importance of payment options. “
“This may be particularly pertinent around Valentine’s Day, when millions of gift cards are set to exchange hands. However, many shoppers may face disappointment when they are only able to use their credit in bricks-and-mortars stores. When considering the example of this Christmas period, which saw online sales grow 18% on 2016, the inability to use gift cards online seems oddly out-of-step with the current consumer trend for avoiding the high street and shopping from home.”