Author: Luke Griffiths, General Manager, UK, Klarna
German consumers are some of the biggest online shoppers in Europe, with research from B2C Europe showing that 70% purchase a physical product online at least once a month. When it comes to paying for these purchases, payment by invoice is still one of the most popular payment methods in the region – according to the Internet World Fair, just over half of consumers prefer to pay in this way.
Although the German market is one of the earliest and largest adopters of the pay by invoice method, we’ve seen demand for this growing globally too. Consumers add their items to their shopping cart, enter their shipping and billing addresses and their invoice is delivered along with their package – or via email.
For sectors with high return rates where customers can order different sizes or models, – such as fashion and technology – it gives them flexibility to effectively try before they commit to buying.
The way in which invoices are delivered and processed varies depending on provider. If customers want to spread out the payment of a purchase, they just need to pay the minimum payment on the invoice to turn their payments into instalments.
In a physical store you can always see and feel a product before you pay for it – paying by invoice allows customers to do the same online. This means that conversion rates are likely to be higher for merchants, and customers can be sure they are paying for something they really want.