E-Retailers must offer multiple online payment methods

While web shopping is on the up, retailers must do more to encourage buyers to pay for goods online

Businesses with an online arm must offer a wider variety of electronic payment options, particularly those targeting European customers as preferred transaction methods vary from country-to-country.

While more than half (56 per cent) of European web users regularly shop online, many of them are snubbing online payment methods, according to a report published this week by analyst Forrester Research.

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The number of web-based shoppers increased by four per cent between 2005 and 2006, but people are still opting for a mix of both online and offline payment.

In the past three months, 64 per cent of net shoppers favoured electronic payments, while just under a quarter (24 per cent) went for purely offline methods of paying for their goods.

Some 13 per cent of buyers opted for a bit of both.

That said, the UK is more advanced than its European counterparts when it comes to embracing online payment.

Despite Germany being hailed as Europe's second largest online shopping market, just 26 per cent use credit cards as their preferred buying tool, compared to 60 per cent of UK shoppers.

PayPal also rates highly with UK purchasers, with more than a third (35 per cent) citing the payment method as one of their favourites.

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To encourage shoppers to ramp up their online payment activity, Forrester suggests that retailers and other businesses reassure consumers about security from the word go by making the safe nature of their shop clear on the home page.

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The analyst also advises e-organisations to offer new online payment options for those who want to pay in that way but are wary of disclosing personal financial data.

To combat these fears, Forrester says companies should follow the example set by Germany and the Netherlands. Both have made headway in this are with their respective giropay and iDEAL initiatives.

The former makes online payment much easier, while the latter is a collaboration between major banks and enables consumers to pay for goods directly using the familiarity of their own bank's trusted online banking system.

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