NETELLER Merchant Newsletter, February 2007
The New KYC - Know Your Countries
It’s a fact: credit cards are by far the most preferred method of online payment worldwide. Studies show 59% of consumers use credit cards as their preferred online payment method.1 But simply looking at the numbers misses a key difference: local consumer preferences. Choosing the wrong payment solution is an error that could mean the difference between success and failure when entering a new global market.
Payment preferences vary greatly within Europe and around the world. Regional factors, such as credit card penetration, local payment culture and perception of risk impact consumer payment preferences. So when it comes to localising your payment solution, KYC is as much about knowing your countries as it is about knowing your customer.
Choice Matters
When it comes to payment methods, consumers are clear: choice matters. More importantly, merchants need to offer the right choices. In a 2007 study conducted by eCOGRA (e-Commerce and Online Gaming Regulation and Assurance), over 56% of respondents listed deposit method as the key motivator for choosing an online casino.2
According to a European consumer adoption study, credit cards are the number one payment method in Europe with 40% of consumers preferring to use them for online transactions.3 The European study revealed interesting differences within that group. While 60% of shoppers in the UK prefer credit cards, only 26% of shoppers in Germany, Europe’s second largest online shopping market, list credit cards as their preferred method.
Why? The simple answer is low credit card penetration. Only 26% of Germans own a credit card. But that answer misses an important difference: the local payment culture. The "buy now, pay later" culture of spending that is prevalent throughout North America and Europe is far less acceptable in Germany. The study showed that 56% of Germans opt for a "pay now" method, preferring electronic bank transfers.
Gaming Payment Trends
The payment landscape shifts when the challenges of consumer perception and credit card declines factor into payment preferences. Compared to the overall credit card preference statistics, credit card usage for gaming is significantly lower. Only 28% of NETELLER deposits use credit cards – a startling number considering that 60% of consumers state they prefer credit cards.4 In Germany, credit card usage falls even further with only 11% of NETELLER deposits from credit cards.
Whether due to credit card declines or a negative perception of the gaming industry, the numbers show a definite need for diverse payment options tailored to the local payment culture. Where general consumer statistics show a strong preference for credit cards, gaming payment preferences encompass a range of deposit options, including P2P and bank deposits.
Success on a global scale requires understanding the payment landscape and offering a total payment solution that includes localised payment solutions.
Contact the Merchant Business Development Team today to discuss how we can partner to help you enter new markets.
Footnotes:
1. ACNielsen: Global Consumer Attitudes Towards Online Shopping, 2005.
2. e-COGRA Global Online Gambler Report, January 2007.
3. Forrester European Consumer Technology Adoption Studies, 2006.
4. NETELLER Member Deposit Statistics, December 2006.
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