Lack of payment methods leads to loss of money
Online retailers in the UK lose more than 1.8 billion pounds (2.13 billion euros) annually due to the lack of payment methods available for their customers. This was discovered in new research amongst regular online shoppers.
New research shows the importance of offering multiple payment methods on websites of online stores. More than 2.200 adults in the UK over the age of 18 took part in a study conducted by Merchant Advice Service. All participants shop online at least once per week.
Abandoned carts lead to loss of revenue
Twenty percent of respondents admitted that every time they can’t pay with their preferred payment method, they abandon the purchase. When they were asked to estimate the value of the items they dropped each month, the average answer was 17.5 euros.
Online retailers lose as much as 2.13 billion euros annually due to the lack of available payment methods.
The researchers at Merchant Advice Service therefore estimated that with about 50.9 million adults in the UK, and the one fifth of respondents who admit abandoning about 210 euros worth of products online per year, online retailers lose as much as 2.13 billion euros yearly due to the lack of available payment methods.
Only debit and credit card frustrates shoppers
The research found that 67 percent of respondents find it frustrating when there is a lack of payment methods available. And 54 per cent of them are discouraged to complete an online purchase if the payment options are only debit or credit card details.
Most respondents’ preferred payment method is PayPal.
The study also asked respondents which payment methods they would like to see in an online store. The majority (71 percent) said they prefer PayPal, closely followed by 67 percent who tend to use digital wallets like Apple Pay and Google Pay. But respondents (24 percent) also wanted to see ‘buy now, pay later’ payments, such as Klarna and Clear Pay.
The importance of alternative payment methods
The findings of this research show that offering alternative payment methods to credit or debit cards can help online retailers generate more sales. “By limiting your payment methods, you’re equally limiting your chances of a sale if customers are unable to pay using their preference. To avoid customers falling at the final stage of checkout, consider adding payment methods that make the online shopping experience as seamless and hassle-free as possible, by offering one-click payments and more”, said Libby James, co-founder of Merchant Advice Service.