German customers prefer to pay for their online purchases on account, because this offers them many advantages. For retailers, however, this method of payment remains risky, as they ultimately pay in advance.

In Germany, purchase on account continues to be popular. This is the result of the latest study Online Payment 2018 by the EHI Retail Institute. With a total market share of 28 percent, purchase on account 2017 continues to hold its position as the most popular means of payment in online trading. Payment by direct debit and PayPal therefore ranked second and third in the turnover ranking. However, the figures from the survey also show that bill purchases fell by 2.5 percent compared to the previous year, whereas PayPal increased its share by two percent.

Advantages for customers, disadvantages for dealers

As reports with reference to the dpa, the popularity of the invoice purchase in this country is mainly due to the many advantages it offers the customers. On the one hand, customers do not have to pay in advance to receive the goods, on the other hand they only pay for the items they want to keep when they return them. In addition, customers do not have to provide sensitive payment data – a point that is still very important for many online shoppers.

For retailers, however, this method of payment has always posed a corresponding risk in the past due to the goods being shipped in advance. In order to minimize the risk of payment default, many shops now carry out standard credit checks. But even if customers pass the credit check, there is still a certain residual risk for the retailer. In order to keep this as minimal as possible for shop operators, more and more payment service providers such as Klarna or PayPal are now taking over the entire payment process from the creditworthiness check to the collection procedure for corresponding fees for the merchant. This is particularly worthwhile for smaller shops for which the effort involved in dunning and collection procedures does not pay off.

More and more shops offer purchase on account

Both sides in particular can benefit from this. Current surveys also show that if a shop does not offer the desired payment methods, there is a risk that the purchase will be cancelled. Buying on account is particularly popular in the online fashion trade. Customers often send back items of clothing that do not fit, so they do not want to advance the entire purchase price in advance.

The number of shops offering purchase on account is rising steadily. With an increase of just under 10 percentage points to 76.1 percent of the top 1,000 shops, online merchants offer purchase on account even more frequently than in 2016. With payment service providers such as Klarna, it is not only possible to purchase on account, but also to divide the payment amount into flexible installments or even to pause payments.


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Link: EHI presents study “Online-Payment 2018 EHI

Image: EHI Retail Institute, AndreyPopov / istock