Customer Behaviour

New research points to changing payment habits among online shoppers. A European study of 10,000 consumers and 1,000 merchants commissioned by Trustly found that seven out of ten (71 per cent) UK shoppers now prefer to pay via debit, compared to 25 per cent who prefer credit.

When asked why they use debit, more than half (52 per cent) said they prefer to be in control of their spending, while 48 per cent said they do not like the feeling of being in debt. The report showed the strongest preference for debit among younger consumers. As many as 78 per cent of UK 25-35 year-olds said they prefer debit compared to 16 per cent who prefer to use credit cards and Buy-Now-Pay-Later credit options – the highest proportion of any age group, closely followed by 16-24 year-olds (76 per cent). The least likely group to prefer debit was 66-75 year-olds (54 per cent).

This strong preference for debit is reflected in recent transactions. When asked how they paid online in the last three months, 86 per cent said they had used debit – compared to just 40 per cent who had used credit options, including Buy-Now-Pay-Later.

“Before the pandemic there was a shift away from credit but this has now accelerated,” said William McMullan, Trustly’s Director of eCommerce. “An uncertain economy has created a bigger appetite for debit options, particularly among young people, who want to steer clear of unnecessary debt.

“As with some other changes brought about by the pandemic we expect this trend to stay,” added McMullan. “Our research also shows convenience is a big driver for debit payments. History tells us that the most convenient solutions are the ones that gain adoption. The most successful retailers make things as easy for shoppers as they can.”

The preference for debit is not confined to shoppers. The majority of UK merchants (79 per cent) said that variable card scheme fees create uncertainty and are an issue to deal with. More than three-quarters (76 per cent) said they have low negotiating power with card schemes and are not in full control of their costs, with 58 per cent feeling the cost structure of card schemes is difficult to understand.

The survey also provided evidence that UK consumers are edging towards technology that might make online shopping even more convenient. Overall, one in ten respondents said they preferred to authenticate their online identity via fingerprint or face ID. But this preference rose to one in four (25 per cent) for consumers under the age of 25, indicating a possible shift in future shopping and payment behaviour.

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