The Austrian e-commerce and m-commerce market structure and the necessity of alternative payments

By Annett van de Bunt - Head of Marketing on 17. December 2013 in eCommerce, Market Insights, Mobile Payment Solutions
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An interview with Stefan Kalteis, CEO and founder of payolution GmbH

The Austrian eCommerce market is currently facing one of its biggest challenges – many providers on the market have not paid great attention to the online world and are now being confronted with a large number of competitors from other German-speaking countries who have devoted significantly more time, effort and expertise into their eCommerce field. But there is also increasing pressure from consumers to guarantee a customer-friendly and simple shopping experience.

1. The Austrian market and the German eCommerce and mCommerce dynamics are rather similar. Summarising the market structure, what do eCommerce companies need to understand to be successful?
Stefan: Although the German and Austrian markets are very similar; when examined closely, there are some peculiarities that are pivotal for success in eCommerce. For example, in Austria it is illegal for merchants to charge their customers a payment fee. In addition, the statutory cooling-off period is only seven days in Austria instead of fourteen. Austrian customers should also be offered a 14-day cooling-off period, however, as they are used to getting this at German online shops. But it’s not just legal differences that are relevant here – there are also significant differences in mentality between German and Austrian customers. Since many Austrian customers order from foreign online shops, they are used to longer delivery times. However, they are not so tolerant when it comes to customer service. Firstly, they want an Austrian telephone number (free of charge) and, secondly, they prefer the person on the other end to speak ‘Austrian’ or ‘Bavarian’ because for many Austrians, northern German sounds a little ‘harsh’ (editor’s note: laughs).

2. Regarding the distribution of payment methods, what portfolio is a prerequisite for success and what are the challenges?
Stefan: Just like in the entire German-speaking countries, invoice payment is also the most popular payment method in Austria. This is particularly due to the fact that the entire risk lies at the merchant’s side when an invoice sale is made. And since customers do not have to pay until they have received the ordered goods.

3. Regarding alternative payments, what do payment service providers and therefore merchants need to offer in order to fulfil local payment demands?
Stefan: The secure invoice sale service from payolution, of course (editor’s note: laughs). For the Austrian market we also recommend credit cards, EPS and PayPal as payment methods. But with credit cards it must be remembered that Diners Card is much more widely used in Austria than, for example, in Germany. Accepting this credit card could therefore be worthwhile.

4. How do you support market entry for international merchants?
Stefan: With our payment methods of invoice payment and instalment payment, we offer merchants the most popular payment methods in the entire D-A-CH region. We also understand this particular region and the needs of its merchants. We offer our products as white-label solutions, reimburse the merchants quickly, support large purchase volumes and give end customers fair and individual services.

5. Do you have any closing remarks for our readers?
Stefan: Although the same language is spoken in Germany, Switzerland and Austria and there are many similarities between the three countries, there are also many small differences. To avoid stumbling over all these little things, one must definitely seek local support before starting in eCommerce here. We therefore offer unbinding advice to all merchants – all they have to do is contact us. We will be happy to help – and not only with payment matters.

About payolution
Founded by Stefan Kalteis in Vienna in spring 2011, payolution GmbH offers the services of invoice payment and instalment payment to the entire D-A-CH region in the form of white-label solutions. With subsidiaries in Berlin, Nuremberg as well as in Vienna the payolution staffs are not only experts for the German eCommerce market, but for all German-speaking countries.

Annett van de Bunt - Head of Marketing

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Annett van de Bunt - Head of MarketingView all posts by Annett van de Bunt - Head of Marketing

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