People in the UK and USA are the most prolific online shoppers, compared to consumers in Europe and Australia.
The findings come from the sixth annual ING International Survey Mobile Banking – How do you prefer to pay? –which investigates the behaviour and attitudes of nearly 15,000 people across 13 countries in Europe, as well as the USA and Australia.
Hey big spender
One in six (16%) Britons and Americans have bought goods or services more than once a week in the last 12 months, six per cent higher than the overall European average of 10%.
Overall, more than three-quarters of people in the UK (77%) shop online at least once per month – 10% higher than the European average (67%). At the other end of the scale, only half of those in Belgium (51%), 55% in Romania and 57% in France shop online at least once a month. For further breakdowns see table 1 below.
Many ways to pay
When it comes to buying physical items in store, 92% of all payments in Europe are made either in cash or by debit or credit card. For online spending, there are more options available; consumers are now able to design their own user experience, which gives them more control over their spending.
While the popularity of different payment methods varies by country due to availability and familiarity, alternative payment technologies are starting to take off. Of these, PayPal is the most accepted overall, with only 13% in Europe reporting that they would never use the online service.
However, the research finds that other online giants such as Amazon, Google and Apple have work to do to compete with PayPal. Across Europe, 25%, 31% and 32% respectively say they would never use these providers to pay for goods and services, either in store or online. And it’s even worse news for Facebook, as half of Europeans (52%) say they would never use it to make a payment.
Nudges offer more control
When it comes to money decisions, ‘nudges’, which offer reminders and suggestions without restricting decision-making, can be useful – and this is where newer technologies can really add value for consumers. The report reveals that four in five (80%) in Europe agree it would be useful to see their bank account balance after making a payment and 76% think notifications of every payment above a certain amount leaving their bank account would be helpful.
Notifications of weekly spending and reminders of long-term financial goals were generally thought to be less useful by consumers. Behavioural science suggests people tend to prioritise short-term impacts over long-term outcomes and it’s possible that ‘nudges’ can help people to feel more confident in their decisions.
Jessica Exton, behavioural scientist at ING, said: “While the majority of payments in store are split between either cash or card, the ways we pay online remain varied. It’s plain to see that local payment channels lead the market in some countries while in others methods such as PayPal and debit/credit card are most popular. Part of this may be due to the reliability and availability of payment technologies in different areas, but user preference for efficient and cost-effective methods will also play a role.
“We’re seeing the number of people managing their personal finances online continue to grow. And while natural inertia plays a role in keeping many people with their traditional bank, some are now complementing these services with alternative providers for activities like transferring money and making peer-to-peer payments.
“New payment technologies offer innovative ways to manage money across a range of providers and platforms. The majority agree the digital notifications and reminders that these technologies can deliver may help them to stay in control of their finances and to make informed decisions.”
James Knightley, chief international economist at ING, said: “Traditional bricks and mortar retailers are struggling to compete with the more flexible and lower cost e-tailer model with store closures and profit warnings an increasingly common phenomenon. As such, internet sales will take an ever-greater share of total consumer spending.
“Those physical stores that are left need to adapt to changing consumer habits and expectations, which includes being flexible in how they accept payments. As such the use of cash will continue to decline and the opportunity for using alternative payments will only increase. Credit and debit cards are likely to benefit in the near term, but as awareness of alternatives grow these too are likely to see market share gradually shrink.”