Ecommerce – Global Payment Anomalies

There are some astounding statistics regarding online payments across different nationalities that signify global payment anomalies.
If we look at Japan, one of the top five economies in the world '

There are some astounding statistics regarding online payments across different nationalities that signify global payment anomalies.
If we look at Japan, one of the top five economies in the world, we see that online retailers offer their clients payment by instalment options. For example Apple offer a range of payment options on its Japanese store ranging from three to twenty four months. Instalment payments via credit card is very popular in Japan and some ecommerce sites allow customers to divide the cost of purchases across two different cards. This provision permits customers to continue to make purchases by keeping a low enough credit balance on one of their cards. In spite of the growing use of credit cards for online payments many Japanese consumers still prefer to pay for online products in local High Street shops such as 7-Eleven. Surprisingly, Japan is fundamentally a cash-based society where credit card penetration is not as high as Europe and North America and bears a stigma of lack of security for online transactions. As a rule Japanese retailers must offer 'convenience store' or High Street shop payments to their customers – this has become one of the most popular means of payment for online payments in Japan. Japanese consumers can order goods in a conventional way but they choose 'convenience store' payments as the pay method during the checkout process. On submission of the order the items are reserved and the customer is sent a pay ID via E-Mail. They usually have up to 6 days to pay for the purchase at one of Japan's 40,000 convenience stores. The ordered items are dispatched on receipt of payment.

Amazon permits Japanese customers to collect their orders from the convenience store, similar to Walmarts' site-to-store facility in the United States. Although practically non existent in the UK and North America, cash on delivery remains a popular method of payment in some European countries and throughout Asia. This alternative method of payment collection is a sound solution in many countries where private delivery companies are used for expediting ordered goods and where credit card use is not so popular.

Interestingly the largest online market in the world, China, with 420 million internet users still has per capita a low credit card penetration rate. In the large cities such as Beijing, Shanghai, Shenzhen, Xian and Nanjing, online credit card uptake is increasing exponentially. However, many Chinese find it difficult to obtain a credit card due to lack of credit history and high interest rates. The most popular means of payment for goods ordered online, in china remains cash on delivery. This phenomenon has not stunted the growth of ecommerce business in China and like other countries internationally popular alternatives to credit cards have arisen online. These other payment methods create a different checkout process from what we are generally used to in the UK.

Back in 2004 we saw an example of a variant online payment platform similar to Pay Pal. The Alibaba Group, who established Taobao China's equivalent to E Bay created an Alipay account for customers to pay for products purchased from Taobao.com and Amazon.cn.. With Alipay consumers have the choice of either paying for transactions immediately after purchase or on delivery.

On the other hand in Germany where the consumer does not like to have a balance on their credit cards, they tend not to use their credit card for expensive purchases. Instead they prefer to use bank credit transfers.

Therefore online businesses in Germany have to make provision for their customers to pay by direct bank transfer as well as credit cards. An example of one German ecommerce business that promotes bank transfers as the primary payment method, is Mytoys.de.

If we jump to the South American continent we find that Brazilians use credit cards widely online and most online businesses permit consumers to pay in instalments. Brazil's largest online shoe retailer, Netshoes, provides customer payments through a variety of credit cards including the local Brazilian Hiper card, where they can spread the price of the purchase over a period of up to l year, free of interest.

It is so important that an ecommerce solution provider carefully considers consumers' payment preferences before providing applications in new markets. Credit Cards in general are always acceptable but knowing customer foibles and anomalies regarding acceptable payment platforms is crucial to the planning and delivery of satisfactory payment methods. If not, shopping cart abandonment at the check out process can be high. To avoid payment method disaster ensure that you work closely with payment gateway provider and ascertain any anomalies in local payment types. When you see what payment methods are most popular then you can build them into your ecommerce application pre-empting any payment platform issues in advance of website completion.