• by Jack Loechner , Staff Writer @mp_research, June 13, 2004

More Payment Choices, More Sales

In a recent study reported by eMarketer, CyberSource finds that North American e-commerce Web sites offering four or more payment methods get, on average, sales conversion rates of 72%. More options, more sales.

Sales Conversion Rate For Ecommerce Sites By Number of Payment Methods Offered

• 4+ methods 72%
• 3 methods 71%
• 2 methods 66%
• 1 method 60%

Source: CyberSource, May 2004

The report finds that nearly all sites offer general purpose card payments (payments made with Visa, American Express, Master Card or Discover cards.) 46% offer gift certificate payments and 41% allow consumers recurring billing options. Over 20% offer choices like PayPal or electronic checks.

Types of Payment Methods Offered (% of respondents)

• General purpose cards 99%
• Gift certificates 46%
• Recurring billing 41%
• Electronic checks 27%
• PayPal/other non-card 25%
• Instant credit 19%
• Private label card 14%

Source: CyberSource, May 2004

The survey also found that shopping cart abandonment rates decline with increases in the number of payment methods. Cart abandonment for survey respondents offering only one payment method was 40%. The rate dropped to 34% for retailers offering two payment methods, 29% for those with three and 28% for those with four or more.

"To get dramatic steps of improvement, retailers need to move to whole new payment categories beyond cards," said Doug Schwegman, director of market intelligence for CyberSource.

You can find out more here at eMarketer.