Are UK retailers’ limited payment options restricting their growth potential?

The UK’s top retailers are “inhibiting their online sales potential by up to 30%” by not offering a range of payment options for customers, according to new research.

A new study carried out by ecommerce and digital agency Visualsoft, has found that almost one in five (19%) of the UK’s top 240 retailers are failing to offer a payment choice aside from a mainstream credit or debit card.

This is despite prominent research from ACI indicating that offering at least three payment options can increase conversion by 30%.

Allowing non-bank card payments such as vouchers and mobile payments, can also increase the appeal of sites, said Visualsoft. This “gives consumers confidence that they are using payment methods they are personally comfortable with”, and in turn can help increase the speed of their purchase.

The report found that PayPal is the most popular alternative payment method, with 71% of retailers offering this alongside a traditional credit or debit card. Visualsoft says that retailers offering PayPal usually see around 25% of customers using this option.

Vouchers, meanwhile, are much less utilised, with only 8% of retailers allowing customers to use gift cards or other common voucher types.

“It’s the final – and potentially most critical – stage in the purchasing cycle, so it’s surprising that so many of the UK’s biggest retail players are limiting their conversion potential by overlooking the importance of payment options,” said Tim Johnson, chief sales officer at Visualsoft.

“This may be particularly pertinent around Valentine’s Day, when millions of gift cards are set to exchange hands. However, many shoppers may face disappointment when they are only able to use their credit in bricks-and-mortars stores. When considering the example of this Christmas period, which saw online sales grow 18% on 2016, the inability to use gift cards online seems oddly out-of-step with the current consumer trend for avoiding the high street and shopping from home.”

International growth may also be limited, with 38% of retailers offering no option to pay with international currency. Lack of local payment options for international customers can lose sites up to 13% of customers, according to some industry estimates.

“Retailers are shying away from the potential of international sales,” said Johnson. “Outside of the UK, customers are already well adjusted to using alternate payment types – such as in Holland where payment solution, Ideal, processes around 55% of transactions. This could prove crucial in a post-Brexit era, when providing US shoppers with their most popular payment options and charging in dollars could pay dividends.”

About Laura Barnes 149 Articles
Founder/Publisher of UK musical instrument industry publication MI Focus.