Consumer Behaviour and Competition Dynamics in Online Payments

Over the past decades, the e-commerce sector in the EEA has experienced steady growth, accompanied by the emergence of innovative online payment methods. Despite these developments, established payment methods maintain a strong position in many EEA countries. While several market forces may contribute to this outcome, the conduct of established market players may also play a role in maintaining or reinforcing their position. For instance, certain market players may be able to secure a more prominent positioning and display on online retailers’ checkout pages: to the extent that the design of the check-out page can effectively nudge users towards certain payment methods, these practices may contribute to creating an unlevel playing field in the online payment sector. As part of a new market study on competition in online payments, a behavioral experiment provides original causal evidence on the impact of practices giving a more prominent display or positioning to payment methods on consumers’ choices, in a selection of 14 EEA Member States. This note discusses the key findings of the experiment and their potential implications on competition in online payments.