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June 20, 2000
When the Customer Doesn't Speak 'Plastic'
Credit card payment is not as popular in other countries

Forms of payment accepted by U.S. online retailers may have to change as more foreigners begin to do business online.

A report by the market research firm Angus Reid shows only half of online shoppers outside the U.S. and Canada use credit cards compared with 75% of Americans who use plastic to complete their transactions. Angus Reid polled more than 28,000 worldwide Internet users, in 34 countries. The survey estimates 120 million Internet users worldwide have made an e-commerce purchase, and Americans account for 54% of all transactions.

E-commerce payment methods "depend on what kind of retail and banking infrastructure there is," says Angus Reid VP Gus Schattenberg. "In countries outside of the U.S., credit cards are less distributed." In non-English speaking countries, for example, two popular forms of payment are direct bank drafts and cash on delivery. In Western Europe, these payment options are exercised for 22% and 10% of online purchases, respectively. In Japan, credit cards are the most popular; however, 18% of Japanese online buyers prefer bank transfers and 14% pay cash on delivery. Even among American shoppers, the second-favorite option, mailing a check or a money order, is used for about 10% of purchases.

The study also finds that some online activities are more common in specific regions. For example, online banking is more common in Europe, South Africa and Brazil, while downloading music files is a favorite in Latin America. Chatting online and downloading music are a few of the activities gaining a foothold, with 37% of respondents using chat and 36% downloading music online. In addition, 20% of global users bank online, and 8% trade stocks.

- by Mark E. Dixon