Credit Cards the Most Popular Online Payment Method

Thais Online Shoppers the biggest VISA fan in Asia

1 December 2005

Bangkok

Bangkok, December 1, 2005 --- More than 325 million people have shopped online within the last month, and for most of these purchases, credit card (59%) or bank transfer (23%) was used to make the payment. Thais online shoppers using VISA card ranked the second in the world and the most in Asia, according to a study released today by ACNielsen, the world’s leading marketing research and information company.

In Europe, however, cash-on-delivery (COD) is the 2nd most used payment method, following credit card, in markets like Portugal (35%), Greece (31%), Spain (29%) and Italy (28%), while almost half of online shoppers in UK used debit cards.

The twice-yearly global ACNielsen Online Consumer Opinion Survey, the largest of its kind, polled over 21,100 respondents in 38 markets from Europe, Asia Pacific, North America, Latin America and South Africa (See Table 1 for market breakdown).  The study asked Internet users around the world about their online shopping experiences including the method(s) of payment used, what payment card was used the most for online purchases and the most preferred payment method when shopping online.

Cash-on-delivery is also a popular payment method used in some Asia Pacific markets, ranking 2nd to credit card in India (29%) and Japan (25%).   China is most unique with COD (34%) as the most used payment method, followed by Bank Transfer (31%).  Credit card ranks only third (26%) in this market and is followed closely by Money Transfer (23%).  Yet when asked about preferred methods, credit card (24%) actually comes second to COD (32%) in China, indicating an unmet need for online credit card usage in this market.

A GAP analysis of the findings show an unmet demand for online payment card usage in such markets as Russia, France, Poland, South Korea, Japan and China.  In each of these markets, a significant number of people wanted to use a payment card but had to use another method or payment.   In Canada, on the other hand, there was an unmet demand for PayPal.

“Our recent regional and country-specific consumer studies show that a major concern in lesser developed markets is the safety of online--and offline--payment methods, while in more developed markets, online shoppers are demanding more sophisticated payment methods,” says Mrs. Chantira Luesakul, Managing Director, ACNielsen (Thailand) Ltd.

“This represents both a challenge and an opportunity for payment card companies and their competitors to understand exact usage drivers as they evolve differently in each market.”

In Japan and Taiwan, payment through a convenience store is an important online purchase payment method.  Where credit cards rank first in both usage and preference, the fact that this method ranks second (Taiwan) or third (Japan) in terms of usage and ranks second in both markets in terms of preference, displays the important role that convenience store plays in online shopping in these markets.

In North America, while credit card (69%) is still the more commonly used payment method, PayPal (29%) ranks second while debit card, primarily driven by the US market, ranks third (22%).  Although credit card was also largely used in Latin America, PayPal generates high usage in Brazil, next to credit card.

Nearly six in 10 say that Visa is the payment card (credit/debit/charge/ATM/deferred debit) that they use the most, while about a quarter claim to use MasterCard the most.  Visa ranks highest across most regions except in South Africa where over half of the consumers use MasterCard for their online purchases and about four in 10 use Visa.

In Asia Pacific, Visa is most used for online purchases in all markets led by Thailand where 80 percent of its online shoppers used the card, followed by Taiwan (75%) and Hong Kong (75%). In China the local brand, China Union Pay, is used by over half of the respondents and only 29 percent use Visa.  In Japan and Korea, meantime, MasterCard ranks third following JCB in Japan and BC Card in South Korea.  In Malaysia, the online shoppers are almost equally split between Visa (49%) and MasterCard (46%) on their online payment card usage.

In Europe, on the other hand, Visa (37%) is only second to MasterCard (50%) in Netherlands.  Both payment card brands are also almost equally split in markets like Austria (Visa at 44% and MasterCard at 46%) and Switzerland (Visa at 49% and MasterCard at 43%).

Meanwhile, American Express generates the highest incidence in Mexico, with 14 percent of online shoppers claiming to have used it the most for their online purchases.  It also registers some 6-8% incidence in markets like Australia, Italy, US, Canada, Germany, Netherlands and Singapore.

About ACNielsen

ACNielsen, a VNU business, is the world’s leading marketing information provider.  Offering services in more than 100 markets, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior.  Clients rely on ACNielsen’s market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.  To learn more, visit www.acnielsen.com.

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Table 1 

The 38 Markets Covered in the 2005 Global Consumer Confidence Study were: