Why do international customers prefer UK online stores?

The annual Pago Report has established as one of the most important e-commerce surveys all over Europe. It is the only report that is based on real transactions instead of interviews. The Pago market survey of  is built on the statistic evaluation of millions of real purchasing transactions processed on the pago platform.

The Pago Report 2008 is based on real life purchase transactions and compares the national consumer and payment behaviour in European e-commerce

The Pago Report states that the British online merchants are increasingly attracting more international consumers. On the other hand in Germany customers do 95% of their shopping in German online shops where as only 45% of customers in UK shops are from the UK. Around 30% of international customers are from countries outside Europe, like the USA or Asia.

The Pago eTransaction Services, an international Acquirer and Payment Service Provider has just published the Pago Report 2008. This edition ist the seventh of the report and is entitled “Trends in E-commerce Purchasing and Payment Behaviour based on real Transactions”.

The Report analyses developments in European online consumer and payment behaviour, non-payment risks and trends in important e-commerce industry sectors.

The Pago Report 2008 is rounded off by Essays by prominent experts from the major credit card organisations, the Deutsche Bank, giropay and the University of Karlsruhe.

According to the Pago Report 2008, online shops in the UK are more attractive to foreign consumers than are, for example, German online merchants. In German shops less than 5% of online purchases are made by international consumers and only a negligible 0.8% from outside Europe. This could be a result of the language barrier.

English is the most widespread language in the world and with over 340 million native speakers alone and it is understood by a majority of e-commerce consumers. Overall in Europe, German and British online consumers are the most active e-commerce participants but Irish consumers have gained a lot and now rank fourth in Europe behind French consumers.

Selection of about 30 million purchase transactions forms basis of the Pago Report 2008

The Pago Report 2008 is based on a selection of about 30 million purchase transactions processed through the Pago platform between October 2006 and September 2007. The report is based on real life purchase transaction and not on analysis of polls and surveys. The Pago Report covers online merchants in Germany, the UK and the rest of Europe.
The report analyses consumer origin, merchant country, transaction values, purchase time, consumer gender, payment methods - including the new online payment methods Maestro and giropay - success rates, chargeback ratios, direct debit chargeback ratios as well as the general non-payment risk with a detailed look at the implementation of 3-D Secure. 3-D Secure is a procedure introduced by the major credit card organisations which allows the identification of the cardholder thereby preventing a large proportion of e-commerce chargebacks. The chargeback ratio is the percentage of credit card transactions which are reversed due to cardholder dispute.

No real Christmas shopping season in UK e-commerce

Online consumer behaviour in Europe is characterized by differences between individual countries. Whereas German online consumers make about one third of their purchases between October and December, UK consumers do less than 10%. In essence: E-commerce for British consumers takes place only between May and September.

British e-commerce consumer slowdown at weekends

Whereas e-commerce is becoming a more attractive weekend activity for consumers in Europe generally, there is a marked U of activity by UK consumers at weekends. In contrast to global trends, UK weekend online consumer activity has dropped further. Only 20% of all weekly transactions are executed in the UK on Saturdays or Sundays. In comparison, consumers outside the UK and Germany account for 26% of their purchases over the weekends.

UK online consumers do their shopping during office hours

According to the Pago Report 2008, there are also differences in the preferred time for online purchases: German consumers use the period from 8pm to 10pm, i.e. after work, most whereas the peak period in the UK is between 2pm and 4pm, i.e. during working hours.

The credit card dominates European e-commerce

The Pago Report also found differences in payment behaviour between the consumers’ countries of origin. German consumers still pay for two out of three purchases with payment methods other than the credit card, consumers in UK and from the rest of Europe and Non-European customers use credit card payment for over 90% of their online purchases.
Pago is the first non-UK acquirer, that has offered Maestro since the summer of 2006, the internet enabled debit card payment method, to its merchants. Maestro is already a leading payment method in the UK and will gain importance with the introduction of the European-wide SEPA framework. Maestro payments, analysed separately in this year’s Pago Report for the first time, account for about 10% of online purchases in the UK.

New payment methods gain importance in European e-commerce

Untill now, the Pago Report analysed consumer e-commerce activity of European countries. In 2008 Report the analysis was extended to include Non-European countries and individual continents.

The Pago Report 2008 is available immediately for purchase from the Pago Shop at www.pago.de