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Delivery vs. online payments then and now

Delivery vs. online payments then and now
We Slovaks like to compare ourselves with the rest of the world in almost everything... and we think it's great. Sometimes the comparison does set up an unpleasant mirror for us (remember World Championship in hockey?) but if we learn and apply positive changes to our next work - we are on the right track. Hockey aside, what about payment trends in online business? We are one step ahead of others? And most importantly: Do e-shops offer sufficient comfort to customers when paying for goods?

A mini-excursion through the history of Slovak e-shops

Changes in online payments have gone through a lot of changes in the past few years. Let's look about 20 years back when the first e-shops were created in the world and in Slovakia. When it come to comfort of payment and other services it was really not good. E-shops were rather online catalogs where the customer looked at the product and ordered it in a quite complex purchase process. The delivery was about a week (or longer). The package arrived at your post office, you paid in cash and you were happy that the package contained what you ordered. Now imagine this kind of service today... not the best idea, right?

Let's stay in Slovakia but let's move a little further in history - to the year 2000. The survey shows what respondents considered to be the biggest problem of online shopping:


1. undelivered / wrong goods, goods delivered on a different date, goods delivered late

2. too long / complicated purchase process

3. network freeze

4. movement in the virtual store

5. search for a store on the network

6. narrow assortment

7. inaccurate description of services and goods


Online shopping during this period was associated with a great deal of mistrust on the part of customers who often had bad experiences. The Internet in Slovakia was initially used as a source of income by speculators and non-serious businessmen but especially by companies that lacked any experience in online business and offered insufficient services. Persistent mistrust was also closely related to the choice of payment method. Unfortunately there are no exact statistics but according to available information - approximately 95% of orders were paid by customers via cash on delivery. People were simply afraid to pay upfront for the "cat in the bag."

The co-founder and current CEO of the most successful Slovak online bookstore martinus.sk Michal Meško:



After 2001 Slovakia dynamically "internetized". Coverage increased and the price of connection decreased. A survey by the Gfk Slovakia agency from 2005 shows that approximately 40% of the population over the age of 15 used the Internet on daily basis. Merchants sensed an opportunity - new e-shops were constantly being created.

The first turning point occurred around 2006-2007. Brands/stores that have been stable "offline" are entering the online market more prominently and slowly moved their activities to the online environment which has been constantly growing. Many e-shops created during this period are still operating today. This period also brought an increase in quality. A larger selection of goods, a faster delivery method and expanded payment options. In this period cash delivery was still dominant at around 75%. Customers are gradually starting to get acquainted with other payment methods - payment in advance to the e-shop account / through the online payment buttons of banks / or through their card. According to Ivan Kubaš, the chairman of the Association for Bank Cards of the Slovak Republic, the reason why people used card payments was simple:

"Consumers look for card payment because it brings them several benefits at once. The biggest advantage is a fast, simple and safe purchase. The turning point definitely came with the development of e-shops and later online payment portals."

Let's look at 2009. The financial crisis brought a recession all over the world. According to Ing. Jozef Dvorský, the executive director of the Slovak Association for Electronic Commerce, Slovak e-shops saw a paradoxical increase:

"During this period consumers began to place much greater emphasis on the price of purchased goods and services and to a greater extent than ever before, they began to use the Internet to compare the price level and, subsequently, to make purchases in online stores. This type of store was able to react more flexibly to the new situation on the market and offer more favorable price ranges. The crisis actually represented a certain kind of positive impulse for online business. Despite the general uncertainty, the number of orders in online stores increased by almost 30% in 2009."

Michal Truban, co-founder and CEO of websupport.sk, considers the years 2010-2012 - also from the point of view of the increased number of registered sites - to be the next important phase of the e-commerce boom in Slovakia which according to him continues to this day and has a big growth potential.


Increasing competition

With the increasing number of e-shops, competition is increasing too. That means lower prices and improved service quality. The lowest price does not equal the most customers anymore. Successful e-shops have understood that the primary goal is a satisfied customer - served comfortably and quickly. Only such a customer will return to the store again and again, in the best case they will recommend the e-shop to their friends. In my opinion, understanding this strategy is a critical point at which e-shops choose their future destiny. I am convinced that if e-shops adopt this philosophy, they can grow long-term and sustainably. One of the requirements that today's times have brought with it is enabling sufficient payment comfort in e-shops which is an essential part of shopping cart optimization.


What are the current trends?

The global trend in payments is clear - cashless transactions are winning and customers increasingly prefer this payment method in online as well. Statistics of banks record a constant increase in online transactions - confirms the spokesperson of Tatra bank, Zuzana Povodová:

"It has been growing since 2005. The average growth rate of the total turnover realized through the TatraPay service over the last 10 years has reached a value of over 33%. When we compare the rate of increase in the number and volume of transactions there is an increase in the average amount of one transaction and thus, in general, consumer confidence in online shopping is constantly increasing."

There are several reasons. First of all, the online market has been sufficiently cleaned of dishonest players which has resulted in increased trust in e-shops. Ing, Jozef Dvorský from SAEC considers the lower legal awareness of e-shops, which often do not know the legislative environment created for the operation of e-shops, to be a problem.

Price comparators such as Heureka or Pricemania have also contributed to making the market clearer. Customers have the opportunity to learn about e-shops through references and experiences of shoppers. Last but not least - customers consider cash on delivery less convenient. People carry less and less cash with them.

Progress and changes in the payment method have changed most significantly in Slovakia over the last 4-5 years. This trend continues, and more or less copies the direction of Czech e-commerce which is more developed than the Slovak one. Currently, cash on delivery in Czech e-shops is already in the background, payments via internet banking and card payments dominate, the growth of which was ensured by payment gateways that were established on the Czech e-commerce market earlier than in Slovakia, around 2010. If we go further - in the most developed countries such as the USA and Germany it is difficult to find an e-shop that sends goods on delivery. Do you think we will follow this trend? Certainly yes. It is payment gateways like Besteron that represent a win-win situation not so often seen in business. A cheaper, faster and more comfortable solution for both the e-shop and the customer. But about that next time...

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