Non-payment of orders - let's look at the figures

By Martin Bay

Are you aware that 11.2% of all orders placed with online payment (card payment, MobilePay, PayPal, etc.) are not paid?

The 11.2% comes from a measurement on our own ideal.shop platform. Here we have looked at all orders placed on 400+ Danish webshops over the last 100 days. This covers a wide range of industries, customer segments and payment methods. And a LOT of orders.

More than one in 10 times an end customer tries to buy something in a webshop with online payment, the payment is not completed. And the order is lost.

The figure would even be a bit higher if we didn't sent out payment reminders. We can see that 15.6% of lost orders can be saved (paid) when we send a reminder and a payment link to the end customer.

(statistics for rescued orders via payment reminder are based on smaller data basis - corresponding to the last 8 days of orders placed over 400+ webshops)

The reason is...

i think it's important to emphasise that lost orders at the payment window are inevitable. And we shouldn't automatically assume that a loss of 11.2% is bad.

Everyone reading this blog is probably better off in terms of e-commerce than the average Dane. You, as an IT professional or experienced e-shopper, think it's easy to buy something online. But that's not the case for everyone.

In addition, there are natural blockages such as:

• the customer can't find their payment card
• the customer cancels the purchase at the moment of payment
• the customer has insufficient funds in their account
• customer loses internet connection or laptop/tablet/mobile crashes/runs out of power
• the customer's bank has blocked the card due to suspected fraud

That said, there are trends in the way the customer can pay in the webshop. That is, payment methods (payment cards, MobilePay, etc.).

Based on 400+ webshops, we can see the error rate when the following payment method is chosen by the end customer (based on orders placed between February 2021 and April 2022):

• Payment method with Visa, Mastercard and Maestro: 15.49% payment interrupted
• Payment method with pure Dankort only: 26.59% payment interruption
• Payment method with pure Dankort, Visa, Mastercard and Maestro: 13.59% payment interruption
• Payment method with MobilePay only: 6.57% payment interruptions
  
• Payment method with PayPal only: 38.25% payment abandonment rate

There is no doubt that MobilePay is a payment method that results in fewer lost orders at the moment of payment. However, it is a bit surprising that the difference is so big compared to other payment methods.

We can also easily see that a pure Dankort payment option is not smart. And that's probably because the average Dane is not fully aware of the difference between pure Dankort, Visa/Dankort and Visakort. Conclusion: pure Dankort should not stand alone as a payment method.

It is also surprising that the drop-out rate for PayPal is a huge 38.25%. PayPal actually only allows you to pay with Visa, Mastercard and several other payment cards. We can only guess that the dropout rate is due to distrust of PayPal's payment window, which is far less widespread in Danish e-commerce than the classic paymentpayment windows from the major payment gateways.