“Abundance of payment methods” is the keyword for both purchasers and EC site operators!
Purchasers value rewards points and convenience — if they don’t have a preferred payment method, more than 50% will feel annoyed.
More than 50% of operators expect more payment methods and enhanced security after implementing payment systems
DEGICA Co., Ltd. (Head office: Musashino City, Tokyo; President: Jack Momose), a provider of the digital payment platform “KOMOJU”, announced the results of “Fact-Finding Survey on Payment Methods on EC Websites.” With the aim of investigating the actual status of payment methods when purchasing on e-commerce sites, which have become increasingly diverse in recent years, DEGICA conducted a survey on payment methods on e-commerce sites for 400 men and women who shop on e-commerce sites as well as 100 e-commerce site operators who sell products on their EC site.
<Survey Overview>
・Methodology: Online survey
・Survey respondent: 400 men and women aged 18-69 who shop at EC sites / 100 EC store operators
・Valid response: 500
・Survey period: Monday, April 15, 2024 – Tuesday, April 17, 2023
<Survey Results>
■Purchasers
① The top three most popular payment methods on e-commerce sites are: 1. Credit card, 2. Digital wallet, and 3. Convenience store payment. Purchasers see “Rewards points,” “Everyday use,” and “Convenience” are important when making payments.
② The reason for choosing “Convenience store payment” was influenced by the Japanese social environment and lifestyle, such as they can make a payment while they are at a convenience store as well as they have convenience stores nearby.
③ More than 50% of respondents said they had experienced difficulties because the EC site did not have their preferred payment method, and about half of them had purchased from other e-commerce sites.
④ The most important factors for e-commerce sites are: 1. Price, 2. Easy buying process, and 3. Security.
■Operators
⑤ When selecting a payment system, the most important factors are “Low fees” and “Quick payment,” and after the system is deployed, the most important factors are “Enhanced security” and “More payment methods.”
⑥ More than 50% of the operators receive orders from outside Japan; the top three countries are Korea, Taiwan, and China
■Survey Results – Purchasers
①The top three most popular payment methods on e-commerce sites are: 1. Credit Card, 2. Digital Wallet, and 3. Convenience Store Payment. Purchasers see “Rewards Points”, “Everyday Use”, and “Convenience” are important when making payments.
The most popular payment methods used when purchasing products on e-commerce sites were “Credit card” (79%), “Digital wallet” (9.3%), and “Convenience store payment” (5.0%). Although credit card was by far the most popular payment method, digital wallets such as PayPay and LINE Pay, which have gained popularity in recent years, and convenience store payment, which is a cash payment method, also ranked high.In terms of payment methods that are used on e-commerce sites (multiple answers), the number one payment method is “Credit card” (85.5%), the number two payment method is “Digital wallet” (27%), and the number three payment method is “Convenience store payment” (10%), indicating their high penetration level.
The reasons for using the payment method were “I can collect/use rewards points” (65.5%), “usually use it at stores” (38.5%), and “It is a payment method already registered on the e-commerce site” (28.3%).The word “point” is often heard in everyday shopping at brick and mortar stores, but it seems to be no exception in shopping on e-commerce sites.
② The reason for choosing “Convenience Store Payment” which is ranked in the third place was influenced by the Japanese social environment and lifestyle, such as they can make a payment while they are at a convenience store as well as they have convenience stores nearby.
Convenience store payment is the third most popular payment method for purchases made on e-commerce sites, ahead of more convenient online services such as carrier billing and prepaid payment, bank transfer which have long been a popular method, and cash on delivery.
The top three reasons for using convenience store payments were: “I can pay while going to the convenience store” (35%), followed by “There is a 24-hour convenience store near my house” (32.5%) and “I want to pay in cash” (27.5%).
The first and second reasons indicates the convenience and high usage of convenience stores which have more than 55,000 stores nationwide (*1) and permeate daily life in Japan. In addition to the third place, the convenience store payment by cash, there were also responses saying “I don’t have a credit card” and “It is reliable and trustworthy,” indicating a high level of trust in cash payments, which remains strong amid the diversification of payment methods.
※1 Source: Japan Franchise Association
③ More than 50% of respondents said they had experienced difficulties because the EC site did not have their preferred payment method, and about half of them had purchased from other e-commerce sites.
In response to the question, “Have you ever experienced any inconvenience when paying at an online shopping site because your preferred payment method was not available?” about 50% of the respondents answered “Often” (4.8%) and “Sometimes” (45.8%), indicating that they have experienced the difficulty. When asked what they did after that, the results showed that many people left the site: “I shopped at another online shopping site” (47%) and “I stopped shopping” (37.6%).
In addition, the top responses for points that would contribute the reliability of an e-commerce site (multiple responses) were “I can collect/use rewards points” and “I can use the payment method I usually use,” indicating that the availability of payment methods that are usually used increases not only convenience but also reliability of e-commerce sites.
④ The most important factors for e-commerce sites are: 1. Price, 2. Easy buying process, and 3. Security.
When evaluating an e-commerce site to purchase from, the most important considerations were “Low product prices” (44%), “Ease of use from product search to purchase” (17%), and “Strong security” (14.8%).Price and the ease of use of the site are important, but “safety” seems to be also important, probably because it handles personal information.
■Survey Results – Operators
⑤ When selecting a payment system, the most important factors are “Low cost” and “Quick payment,” and after the system is deployed, the most important factors are “Enhanced security” and “More payment methods.”
When choosing a payment system, EC site operators rated “Low cost” (62%), “Quick payment” (57%), “Ease of use” (53%), and “abundance of payment methods” (51%) as important factors.
In addition, the survey results show that the operators expect to have the following features in the future (multiple responses): “Enhanced security” (55%), “More payment methods” (50%), and “Shorter payment cycle” (46%).
In terms of the importance of choosing a payment system, “payment security” was 49%, but after the implementation of the system, “importance of security” and “abundance of payment methods” seem to be recognized as points to be strengthened.
⑥ More than 50% of the operators receive orders from outside Japan; the top three countries are Korea, Taiwan, and China.
Regarding which countries/regions, including overseas countries, orders are coming from, more than half of the respondents received orders from overseas, with 46% saying that only domestic orders were received and 54% saying that orders were received from overseas. The top three countries with the largest number of orders were Korea (37%), Taiwan (33%), and China (32%), with neighboring countries accounting for the largest number of orders, followed by the United States and Canada (27%), and Southeast Asia (22%).
Summary
The survey results show purchasers put importance on “Rewards points,” “Convenience,” and “Everyday use” when deciding payment methods on e-commerce sites. Also, the use of “Convenience store payment” suggests that “environment” and “lifestyle” also play a role in their payment method decision.
And when their preferred payment method is not available, a majority of them feel inconvenienced, and nearly half of them have purchased from other sites.
EC site operators put importance on “Low cost,” “Quick payment,” and “Ease of use” when evaluating a payment system, and once they deploy and start running the system, they recognize “Security” and “More payment methods” as points they expect to be strengthened. In addition, more than half of the e-commerce sites surveyed receive orders not only from Japan but also from other countries and regions, so handling payments for overseas customers is also a consideration.
[Advantages of KOMOJU]
“KOMOJU” digital payment platform is a payment agent service that enables businesses that operate e-commerce sites (including cross-border e-commerce transactions) to introduce domestic and overseas payment methods such as credit card payment, convenience store payment, e-commerce smartphone payment, Pay-easy, electronic money payment, bank and ATM transfer, and deferred payment all at once. KOMOJU is already embedded as a payment method in e-commerce platforms including Shopify and Wix, making it easy to bulk deploy major payment methods at scale. Customers choose KOMOJU because they can deploy the platform safely and securely without any upfront investment or monthly fee, choose the sales payment cycle from weekly or monthly, and fully utilize our support services from our Customer Success team after deployment in both Japanese and English.
* “KOMOJU” is an abbreviation for “Konyu mojuru,” literally “purchasing module.”
