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E-commerce Payments Trends

2020 E-commerce Payments Trends Report: Austria


Austria’s e-commerce culture continues to grow, shaped by rising mobile commerce and high levels of cross-border spending

 

Key Takeaways

 

Compact-e-commerce

Denmark is a nation willing to spend in high amounts online. E-commerce is firmly established and continues to grow. In the near term, the restrictions caused by COVID-19 may push more consumers online for essentials. In 2020, Danish consumers curbed their spending on luxury items.

Compact-e-commerce

With excellent physical, digital and banking infrastructure, consumers expect to be able to order and receive their products quickly and easily. International merchants will need to be able to meet these expectations, both via desktop and mobile.  

Compact-e-commerce

Online payments in Denmark are card-based. Overseas merchants should offer comprehensive card payment functionalities to reach as many consumers as possible.

 

Business-to-consumer e-commerce continues to increase in Austria, albeit at a modest rate: annual growth has not exceeded 5 percent since 2016.2

E-commerce now accounts for 13 percent of total retail sales in Austria,3 and 62 percent of the population have shopped online.4 Online sales vary widely by product category. Travel has the highest penetration (30 percent), followed by fashion (18 percent), consumer electronics (12 percent) and entertainment (7 percent).5

The Austrian e-commerce market is dominated by international brands. Foreign merchants with dedicated outposts in Austria such as MediaMarkt, Otto and Obi account for 28 percent of the total e-commerce spend, whilst foreign firms without domestic operations such as Amazon and Zalando account for 64 percent of the total e-commerce spend. Austrian online merchants take just 8 percent of total e-commerce spend.6

Black Friday in November is a key online shopping event. For the first time in 2020, Austria introduced a ‘Summer Black Friday’, aimed at clearing unsold stock, which took place in the first week of August. Both major international and smaller domestic brands participated.7

 

Single-Digit Sales Growth Expected to 2023, as Logistics Providers Ramp Up Capacity

  • The Austrian business-to-consumer e-commerce market is worth EUR10.5 billion (US$11.79 billion).8 Growth is expected to continue at a compound annual growth rate (CAGR) of 2.7 percent to 2023,9 one of the lower rates out of the countries surveyed in our report.

  • The COVID-19 pandemic led to a temporary uptick in e-commerce. The number of parcels shipped to Austrian homes by domestic logistics provider Gebrüder Weiss rose by over 35 percent in the first half of 2020, compared with the first half of 2019. Vienna, which is responsible for around 25 percent of Austria’s total economic output, ordered the most parcels.10

  • Logistics providers are increasing their investments in Austrian e-commerce warehouse facilities in an expectation of rising demand for e-commerce. Gebrüder Weiss is enlarging its current capacity to create a new EUR25 million home delivery freight-handling facility near Vienna.11

 

Austrian Mobile Commerce set to Outperform Overall E-commerce

  • Austria’s business-to-consumer mobile commerce market is worth EUR1.1 billion. In contrast to overall e-commerce, mobile commerce is expected to grow at a far healthier 13.7 percent compound annual growth rate to 2023.12

  • Mobile commerce is supported by rising smartphone penetration, which is at 69 percent,13 and is forecast to reach 72.4 percent of the total population by 2022. Samsung is the device market leader with a 34 percent share, followed by Apple (27 percent), Huawei (20 percent), Sony (4 percent) and LG (2 percent).14

  • Austria has good digital infrastructure, with internet penetration at 88 percent.15 Over three-quarters of Austrians use the internet on a daily basis.16

 

Mobile Commerce Growth Prediction Starts From Low Baseline

  • Mobile commerce’s double-digit growth prediction starts from a low baseline. At present, only 9.9 percent of business-to-consumer e-commerce is carried out on a mobile device.17 In line with many other European nations, apps (49 percent) and browsers (51 percent) are currently used in roughly equal measure to complete transactions.18

  • Facebook has the largest social media market share, at 74 percent in 2020. Pinterest is the second-most visited site, with 18 percent market share, followed by YouTube, at 2.84 percent.19

  • Austrians are increasingly using digital personal assistants for online shopping. The number of Austrians who own a voice assistant jumped 125 percent between 2018 and 2019, from 200,000 to 450,000. Amazon’s Alexa has already been used by 30,000 Austrian consumers to shop online.20

 

Make Cards a Priority and Offer Open Invoice to Meet Austrian Expectations

  • Cards are the number-one way to pay online in Austria, taking 32 percent market share and rising.21 Debit cards outweigh credit cards, at 1.14 debit cards per capita, compared with 0.41 credit cards.22

  • Open invoice payment, where items are paid for on receipt, is the second-most popular option, with a 26 percent market share. However, use is declining, and there is a trend towards Austrian online shoppers switching from unbranded open invoices to cards and digital wallets. Physical products are typically paid for after they have been received via open invoicing, while digital products are more likely to be paid for at the point of purchase via card or digital wallet.23

  • Digital wallets at present take 20 percent of online payments. They are set to become second only to cards by 2023, driven by PayPal. Other prominent digital wallets include Skrill, WebMoney, SEQR and Masterpass.24

 

The Majority of Austrian Online Purchases are from Abroad

  • Cross-border merchants take more market share than domestic online businesses: cross-border sales account for 64 percent of total e-commerce in the country.25 More than eight out of every 10 (83 percent) Austrian online consumers have already shopped with an international merchant.26

  • Austria shares its official language, German, and a land border with Germany, which is the most-used cross-border shopping destination, taking 70 percent of cross-border sales. China and the UK rank second and third, respectively.27

  • Austria is surrounded by advanced European e-commerce markets: international merchants can take advantage of this to offer prompt delivery and route products via major European sales platforms such as Zalando and Amazon, which does not have a dedicated Austrian site.

 

Beware High Return Rates on Purchases

 

  • Regulation/trends 
    Typically, online businesses who intend to make a profit are required to register with the relevant local trade authority in Austria. Ecommerce is regulated by EU laws and the domestic Ecommerce Act.28

  • Barriers or benefits to e-commerce market entry 
    No local entity is required, and there are no currency or foreign exchange limitations.

    Austria has a high return rate, with the overall return rates for physical goods at approximately 43 percent. This figure is even higher for fashion purchases, at 54 percent.29

  • Factors driving the cost of payment acceptance 
    The European Commission caps interchange on consumer debit and credit cards to 0.2 percent and 0.3 percent respectively. PayPal, which is a popular digital wallet option in Austria, is more expensive to accept than card.30

 

J.P. Morgan has analyzed 34 e-commerce markets to decipher the trends and challenges driving global e-commerce in 2020. To access our insights on a country-by-country basis, click here.

 

1.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2018.
2.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2019.
3.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via RegioData, 2020.
4.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Eurostat, 2020.
5.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2019.
6.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2019.
7.vienna.at, July 2020. ‘Erster Summer Black Friday: Eine Woche lang Rabatte.’ Accessed July 2020
8.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2019.
9.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
10.ajot.com, July 2020. ‘Gebrüder Weiss invests in €26 million logistics terminal in Austria.’ Accessed July 2020.
11.ajot.com, July 2020. ‘Gebrüder Weiss invests in €26 million logistics terminal in Austria.’ Accessed July 2020.
12.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
13.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Statista, 2020.
14.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
15.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Eurostat, 2020.
16.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2019.
17.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2019.
18.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
19.statcounter.com, July 2020. ‘Social media stats Austria, June 2019-July 2020.’ Accessed July 2020.
20.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2019.
21.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
22.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Oesterreichische Nationalbank, 2020.
23.Arvato.se, 2018. ‘Arvato Payments Review – Austria.’ Accessed November 2018.
24.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
25.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
26.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Eurostat, 2019.
27.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via IPC, Cross-Border E-Commerce Shopper Survey 2018, 2019.
28.lexology.com, July 2018. ‘Digital business in Austria.’ Accessed September 2020.
29.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Handelsverband, Bundesweite eCommerce Studie Österreich 2018.
30.J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.

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If you have a technical issue or a question about your merchant account, please call your Relationship Manager directly.
Alternatively, call our merchant support team on:

For Europe: +353 1 726 2909     UK: 0845 399 1130

Further information is available at any time through your Paymentech Online account.

 

Out of Courts Complaints and Redress Procedures

  1. J.P.Morgan has in place complaint resolution procedures to settle complaints of Merchants arising from their rights and obligations under Parts 3 and 4 of the Payment Services Regulations 2018.
  2. If you have a complaint, please contact your Relationship Manager. Your complaint will be addressed in accordance with J.P.Morgan complaint policy, which we are happy to provide upon request.
  3. In the event of a complaint, a Merchant may refer the matter to the Irish Financial Services and Pensions Ombudsman (FSPO) or such relevant out-of-court complaint body or to such other competent out-of-court complaint body applicable to you in the country where you are established.
  4. Details on complainant eligibility are available on the FSPO website.

                   You can contact the FSPO at:

Irish Financial Services and Pensions Ombudsman
Lincoln House
Lincoln Place
Dublin 2
D02 VH29
Ireland
Tel: + 353 1 567 7000
Email: info@fspo.ie
Website: https://www.fspo.ie

 

Merchants domiciled in the UK

  1. From 1st January 2021, J.P.Morgan will enter into the UK's Temporary Permissions Regime (TPR).
  2. The TPR has been established by the UK regulators to allow firms such as J.P.Morgan to continue to operate in the UK following the end of the Brexit transition period.
  3. During the TPR, a UK-based merchant that is not satisfied with our response to a complaint and that qualifies as an eligible complainant may refer the matter to the UK's Financial Ombudsman Service. Details on complainant eligibility are available on the Financial Ombudsman Service website.

                   You can contact the Financial Ombudsman Service at:

Financial Ombudsman Service
Exchange Tower
London
E14 9SR
Free phone: 0800 023 4567
Email: complaint.info@financial-ombudsman.org.uk
Website: www.financial-ombudsman.org.uk