2019 J.P. Morgan Global Payment Trends

2019 Global Payments Trends Report - Austria Country Insights

AUSTRIA INSIGHTS REPORT


Austria is a small e-commerce player but one that is poised to grow considerably in the coming years. This market expansion will be driven by increasingly ambitious local merchants, rising smartphone use leading to double-digit mobile commerce growth, and the arrival of international digital wallet players seeking to make their mark. To help our clients locate, attract and keep their customers, we have tracked and assessed e-commerce developments in 34 mature and emerging markets around the globe.

Introduction

 

Economic growth was strong in 2018, and is forecast to remain robust in 2019 and 2020.1 The main driver of this positive outlook is domestic demand. Consumer spending rose by 2.8 percent in 2018,2 while the labor market has been characterized by falling unemployment and increasing wages.3 These two trends are very positive for the e-commerce sector, which is forecast to rise at a rate of eight percent in the period up to 2021.4 But mobile commerce is the stand-out performer. With growing smartphone usage, mobile shopping is expected to grow at a compound annual growth rate of 16 percent up to 2021.5

This document is based on projected figures and is subject to change at any time.

A country with a small but growing domestic e-commerce market

 

The €9.1 billion16 Austrian online shopping sector has expanded rapidly in recent years, but growth is now leveling out as the market matures. After a period of double-digit annual e-commerce growth, Austrian demand for online shopping has slowed to a single-digit but still healthy rate of 9.4 percent.17 Reflecting this trend, Austrians are spending somewhat modestly online, with the average annual spend a third lower than the European average of €2,186.18

E-commerce expansion in Austria has not been fueled significantly by domestic e-commerce merchants. Securing at least 55 percent of overall Austrian online spend, the market is dominated by international merchants.19 Indeed, Austria ranks third within the EU for international online shopping, surpassed only by Luxembourg and Malta.20

 

Domestic sites are on the rise as online shopper numbers increase

 

Amazon is Austria’s biggest pure play e-commerce merchant, but growth is being driven by sales of third-party providers in Amazon’s marketplace rather than its own brands and stock.21 While high levels of international online merchants should smooth the path for other foreign e-commerce merchants in a country that is already well-versed in cross-border shopping, the presence of Austrian online retailers is rising. The number of sites has tripled in the past decade to more than 9,000 today22 and the foundations to support greater online shopping are already in place. Austria enjoys good internet penetration (88 percent)23 and usage, with 62 percent of consumers aged 16 to 74 already shopping online.24 Growth is also supported by higher shopping penetration, with the number of online shoppers having increased by 24 percent between 2012 and 2017, a trend that is consistent amongst all age groups.25

 

Click and collect is popular in a country known for speedy logistics

 

Clothes and sporting goods are the most popular products to buy online in Austria, with 66 percent of shoppers purchasing these products. Travel and holiday accommodation is the next most popular e-commerce category at 56 percent, and 39 percent of shoppers buy books and magazines online (which rank third).26 To date, men have been more likely to shop online than women and this trend is set to continue.27 High-income households shop online more frequently and spend more per transaction than lower-income households,28 so e-commerce merchants that can provide compelling value sites may be able to take advantage of the growth potential within the lower-income shopper demographic.

When it comes to delivery, there is a trend towards Austrian consumers using click and collect services, with nine percent of the Austrian population buying products online and then picking them up in the store, an increase of three percent compared with 2016.29 Delivery is prompt thanks to strong domestic logistics capabilities. In fact, Austria’s logistics are world-leading, another factor that should support future e-commerce growth. It stands fourth globally in the World Bank’s logistics ranking for ease of delivery and trade logistics, surpassed only by Germany, Sweden and Belgium.30

High smartphone use underpins confident mobile commerce growth prediction

 

Smartphone use is widespread in Austria, with penetration at 65 percent.31 When it comes to preferred brands, Samsung is the market leader,32 but Apple is expected to make gains in the country after opening its first store, in Vienna, in 2018.33

Austria’s mobile commerce market is worth €0.7 billion.34 At present, just 7.8 percent of e-commerce is completed on a mobile device.35 While this is a low starting point, shopping on the go is increasing rapidly. An estimated 1.3 million Austrian consumers now use their smartphone for online shopping, an increase of 17 percent year-on-year.36

As a result of this growth, and combined with high smartphone ownership, the Austrian mobile commerce market is expected to continue expanding at a double-digit rate of 16 percent to 2021, by which point it is projected to be a €1.3 billion market.37

 

Converting browsing to sales is a key challenge

 

The challenge for e-commerce merchants lies in converting smartphone browsing to completed sales. Almost 50 percent of Austrians use smartphones to search for retail goods online but only 23 percent buy directly via smartphone from e-commerce sites.38 E-commerce merchants could most likely boost conversion rates by providing easy-to-navigate, mobile-optimized sites and app-only offers and products. Austria ranks as having a ‘very high English proficiency’, according to the EF English Proficiency Index, one of only 12 non-English speaking countries with this score. As a result, merchants are not under pressure to translate their sites into German.39

Browsers are still used for the majority of transactions, accounting for €0.4 billion sales, but apps are close behind, at €0.3 billion.40 Austria’s most popular shopping apps include Lidl Plus and consumer-to-consumer selling platform Schpock.41 Apps are launching in an effort to drive up domestic online merchant sales, such as Jingle, which acts as a sales platform for local brands.42

Cards and open invoicing set to be challenged by digital wallet growth

 

Cards and open invoicing are the two most popular ways to pay online in Austria, accounting for 31 percent and 28 percent of transactions respectively, in terms of value.43 Card payments are expected to grow at a compound annual growth rate of 14 percent out to 2021,44 where they are expected to have a 32 percent share of sales,45 while the more traditional open invoicing method is expected to grow at a slower rate of eight percent per year to account for 23 percent of transactions by 2021.46

Debit cards are more popular than credit cards, with 1.12 debit cards per capita compared with just 0.39 credit cards per capita.47 The use of debit methods suggests an aversion to taking on debt, but attitudes towards using credit appear to be changing. Consumer credit in Austria hit an all-time high in 2018, at €164.5 billion.48

Digital wallets are expected to be the fastest-growing payment method, with transactions forecast to increase at a compound annual growth rate of 25 percent out to 2021.49 PayPal® is a well-utilized option for digital wallets, accounting for 12-15 percent of additional payment methods.50 Other methods look set to become increasingly prominent in the coming years; Google Pay is already available in the country for Android users51 and Apple is reportedly in talks with Payment Service Austria to launch Apple Pay.52

Bank account penetration in Austria is high, at 98.2 percent,53 and bank transfers account for 15 percent of online transactions.54 Electronic Payment Standard is a popular domestic online bank transfer payment service, accepted by 80 percent of Austrian merchants.55 At the point of purchase, the consumer logs into their online bank account and authorizes the payment before being returned back to the merchant’s website. The funds are instantly debited from their bank account and the merchant receives an immediate payment confirmation. The service is offered by all major banks in Austria. This removes the chargeback risk associated with card payments for merchants and offers local currency settlement.56

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 wallets.57

Low fraud rates a positive sign for the market

 

Fraud rates are low in Austria, with only one percent of online shoppers experiencing this, compared with the European average of two percent.58 The main area of threat that has been increasing in recent years has been identity fraud.59 However, through the EMPACT Payment Card Fraud initiative, which has been led by Austria,60 some progress is being made against online scammers. The Austrian customs authorities are also working to prevent imports of fake goods into the country. Almost a quarter of a million counterfeit products totaling more than €13.7 million are seized each year.61 Local trade associations are calling for Austria to implement a digital customs process for e-commerce merchants and buyers to prevent counterfeit sales and reduce customs and payment fraud.62

Key takeaways

 

  • The €9.1 billion Austrian online shopping sector has expanded rapidly in recent years, but growth is now levelling out as the market matures63
  • The mobile commerce market is expected to continue to expand at a double-digit rate of 16 percent out to 2021, by which point it is projected to be a €1.3 billion market64
  • Cards and open invoicing are the two most popular ways to pay online in Austria, accounting for 31 percent and 28 percent of transactions respectively, in terms of value65
  • Digital wallets are expected to be the fastest-growing payment method, with transactions forecast to increase at a compound annual growth rate of 25 percent out to 202166

 

Data may vary from historical figures, due to certain categories being re-stated as new information sources have become available.

* J.P. Morgan 2019 Payments Trends – Global Insights Report series includes the following European countries: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland, The Netherlands, UK.

 

About J.P. Morgan

 

J.P. Morgan offers a full suite of payments services to enable a seamless connection across the payments continuum for clients. We bring our consultative expertise, data-driven insights, and local service around the globe to provide a more unified view of payables, receivables and cash management. Merchant Services is the payment acceptance and merchant acquiring business of JPMorgan Chase & Co. (NYSE: JPM) – a global financial services firm with assets of $2.6 trillion and operations worldwide.i According to The Nilson Report, it is also the top merchant acquirer of e-commerce transactions in Europe.ii

 

JPMorgan Chase & Co. Q4 2018 Earnings Report 2018.

ii The Nilson Report, #1132 May 2018.

 

 

 

Global Payments Trends Reports

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Information contained in this document has been prepared by third parties or obtained from sources which are believed to be reliable; but neither Chase Paymentech Europe Limited nor any of its affiliates warrant the completeness or accuracy of the information contained herein. Chase Paymentech Europe Limited and any of its affiliates shall have no liability to the user or to third parties, for the quality, accuracy, timeliness, or for any special, indirect, incidental or consequential damages which may be experienced because of the use of or reliance on the data or statements made available herein. Third party trademarks, brand names, products and services are only referential and Chase Paymentech Europe Limited and its affiliates disclaims any sponsorship, affiliation or endorsement of or by any such third party.

 

Chase Paymentech Europe Limited, trading as J.P. Morgan, is regulated by the Central Bank of Ireland. Registered Office: J.P. Morgan, 200 Capital Dock, 79 Sir John Rogerson’s Quay, Dublin 2 D02 RK57, Ireland. Registered in Ireland with the CRO under the Registration No. 474128.

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1 European Commission, November 2018. ‘Autumn economic forecast – Austria.’ Accessed December 2018.

2 Western Europe Economic Research, JPMorgan Chase Bank, September 2018.

3 European Commission, November 2018. ‘Autumn economic forecast – Austria.’ Accessed December 2018.

4 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

5 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

6 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

7 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via CIA, 2017.

8 World Bank Open Data. ‘Austria.’ Accessed December 2018.

9 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

10 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

11 HANDELSVERBAND, Studie: Rekordausgaben im österreichischen E-Commerce 2017 dank Smartphone, 26 June 2017.

12 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Eurostat, 2017.

13 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2018.

14 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

15 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ECB Statistical Data Warehouse, 2018.

16 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-Commerce Foundation, 2016.

17 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

18 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

19 WKO.at, June 2018. ‘Dreimal so viele Online-Shops wie vor zehn Jahren.’ Accessed November 2018.

20 WKO.at, June 2018. ‘Dreimal so viele Online-Shops wie vor zehn Jahren.’ Accessed November 2018.

21 Euromonitor.com, January 2018. ‘Internet Retailing in Austria.’ Accessed November 2018.

22 WKO.at, June 2018. ‘Dreimal so viele Online-Shops wie vor zehn Jahren.’ Accessed November 2018.

23 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Eurostat, 2017.

24 Export.gov, August 2018. ‘Austria – eCommerce.’ Accessed November 2018.

25 HANDELSVERBAND, Studie: Rekordausgaben im österreichischen E-Commerce 2017 dank Smartphone, 26 June 2017.

26 Export.gov, August 2018. ‘Austria – eCommerce.’ Accessed November 2018.

27 EShopWorld.com, 2016. ‘Insights into the growth of Austrian eCommerce.’ Accessed January 2019.

28 WKO.at, June 2018. ‘Dreimal so viele Online-Shops wie vor zehn Jahren.’ Accessed November 2018.

29 HANDELSVERBAND, Studie: Rekordausgaben im österreichischen E-Commerce 2017 dank Smartphone, 26 June 2017.

30 WorldBank.org, 2018. ‘International LPI Global Rankings 2018.’ Accessed November 2018.

31 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2018.

32 Euromonitor.com, August 2018. ‘Mobile Phones in Austria.’ Accessed November 2018.

33 Apple.com, February 2018. ‘Apple opens its first store in Austria Saturday.’ Accessed November 2018.

34 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

35 HANDELSVERBAND, Studie: Rekordausgaben im österreichischen E-Commerce 2017 dank Smartphone, 26 June 2017.

36 HANDELSVERBAND, Studie: Rekordausgaben im österreichischen E-Commerce 2017 dank Smartphone, 26 June 2017.

37 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

38 Export.gov, August 2018. ‘Austria – eCommerce.’ Accessed November 2018.

39 EF EPI, 2018. ‘EF English Proficiency Index.’ Accessed January 2018.

40 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

41 Statista.com, 2018. 'Leading shopping apps in the Google Play Store in Austria in April 2018, by number of downloads (in thousands).’ Accessed November 2018.

42 Ecommercenews.eu, November 2018. ‘Austrian app Jingle wants to boost local shopping.’ Accessed November 2018.

43 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

44 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

45 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

46 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

47 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ECB Statistical Data Warehouse, 2018.

48 TradingEconomics.com, 2018. ‘Austria Consumer Credit.’ Accessed November 2018.

49 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

50 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

51 Google.com, 2018. ‘Countries where you can use Google Pay.’ Accessed November 2018.

52 9to5mac.com, July 2018. ‘Apple Pay reportedly coming to Austria ‘in the coming months’’. Accessed November 2018.

53 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

54 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

55 AlternativePayments.com, 2018. ‘EPS – Austrian Online Bank Payments.’ Accessed November 2018.

56 AlternativePayments.com, 2018. ‘EPS – Austrian Online Bank Payments.’ Accessed November 2018.

57 Arvato.se, 2018. ‘Arvato Payments Review – Austria.’ Accessed November 2018.

58 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Eurostat, 2017.

59 FICO, 2017. ‘Evolution of card fraud in Europe 2017.’ Accessed December 2018.

60 Europol, June 2018. ‘95 e-commerce fraudsters arrested in international operation.’ Accessed December 2018.

61 OEVZ.vom, June 2018. ‘Cross Border eCommerce: EUR 120 million damage due to tax fraud in Austria.’ Accessed January 2019.

62 OEVZ.vom, June 2018. ‘Cross Border eCommerce: EUR 120 million damage due to tax fraud in Austria.’ Accessed January 2019.

63 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-Commerce Foundation, 2016.

64 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

65 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

66 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

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