Eastern and Central Europe eCommerce Explorer: People and Payment Trends

Opportunity abounds in Eastern Europe for ecommerce merchants who adapt their sites to local ecommerce and payment norms.

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The idea of Central and Eastern Europe (CEE) as a cohesive region is a misnomer. In many ways, the only similarities shared by the countries in these regions—Bulgaria, Croatia, Hungary, Poland, Romania, Russia, Serbia, Slovakia, Slovenia—are geographic. Here, crossing borders means changing currencies, payment preferences, and ways of life.

However, there is reason to be optimistic about each country’s ecommerce and payments potential. The European Commission’s 2018 decision¹ to remove geo-blocking on ecommerce means anyone in any EU member state has the same access to online goods and services. Internet penetration is growing in each of these countries. More countries are getting on board with fintech and digital payments.²

This Article Includes In-Depth Insights into eCommerce Trends and Payment Preferences for the Following Countries

- Bulgaria
- Croatia
- Hungary
- Poland
- Romania
- Russia
- Serbia
- Slovakia
- Slovenia
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Bulgaria
- Population: 7 million³
- Population with bank accounts: 72%⁴
- Population with mobile phones: 63.2%⁵
- Internet penetration: 66.8%⁶
- GDP: US$65.1 billion³
- Ecommerce market size: US$626 million (2019)⁷
According to Bulgaria’s National Statistical Institute, 21.7%⁸ of people bought something online in 2019. Most people (88.1%) bought from national vendors, while 41.8% of respondents reported buying something from another EU member state, and 19.1% bought from non-EU countries.⁹ This suggests that while Bulgarians have a preference for national sellers, they are also willing to spend cross-border.

Croatia
- Population: 4.1 million¹⁰
- Population with bank accounts: 86%⁴
- Population with mobile phones: 67%¹¹
- Internet penetration: 81%¹²
- GDP: US$61 billion¹⁰
- Ecommerce market size: US$536 million¹³
In Croatia, mobile ecommerce adoption is growing quickly. According to the Croatian Bureau of Statistics,¹² 70% of people use a mobile device to access the internet, 93% use the internet to find out information about goods and services, and 45% of internet users bought something online in 2019—an increase of 10% compared to 2018.

Online, Croatians like shopping domestically and internationally in almost equal measures, but they do prefer using local payment methods. The top payment method in Croatia is direct bank transfers (31%) and cash on delivery (25%), followed by credit cards (21%). However, 23% use some kind of digital solution, whether it’s from their local bank or from a service like PayPal.¹⁴

Hungary
- Population: 9.8 million¹⁵
- Population with bank accounts: 75%⁴
- Population with mobile phones: 69.2%¹⁶
- Internet penetration: 76.1%¹⁵
- GDP: US$157.88 billion¹⁵
- Ecommerce market size: $2 billion¹⁷
The Hungarian government has, in recent years, put major emphasis on developing its ecommerce sectors and it’s been working. There are now 6.1 million online shoppers¹⁷ in this Central European country. In late 2019, the country also announced¹⁸ a new strategy to improve digitization of its banking sector in particular, by way of promoting cooperation between banks and fintechs. Hungarians are already keen¹⁹ on using their mobile phones for making payments. All this makes it an attractive destination for ecommerce and payments companies looking to expand in Central Europe.

Poland
- Population: 38 million²⁰
- Population with bank accounts: 87%⁴
- Population with mobile phones: 66.5%²¹
- Internet penetration: 77.5%²⁰
- GDP: US$628.2 billion²⁰
- Ecommerce market size: US$13.5 billion²²
Poland is one of the EU’s fastest-growing economies. It’s buoyed by a large domestic market, growing consumer confidence, rising incomes for most people and overall increased consumer spending.²³eCommerce is a massive part of that success.

According to JP Morgan,²¹ bank transfers currently account for half (50%) of all ecommerce payments and cards take up 22%, but digital wallets like PayU are also growing in popularity. They are currently used about 15% of the time, but are forecasted to expand. That growth will be spurred²¹ by a high uptake of mobile banking and a willingness to try new banking services.

Romania
- Population: 19.5 million²⁴
- Population with bank accounts: 58%⁴
- Population with mobile phones: 46%²⁵
- Internet penetration: 70.7%²⁴
- GDP: US$239.5 billion²⁴
- Ecommerce market size: US$4.6 billion²⁶
If there’s one thing Romanians love to do, it’s use their mobile phones. Major online retailers report that 80% of their traffic comes from mobile, and 86% of internet users connect via mobile²⁷. It shows in their shopping habits. Romania’s ecommerce market jumped 22% in 2019, and 30% in 2018²⁶. They love shopping with both domestic and international vendors. However 85% of sales are paid on delivery²⁷. That means vendors need to provide a variety of online checkout options including CODs.

Russia
- Population: 144.5 million²⁸
- Population with bank accounts: 76%⁴
- Population with mobile phones: 66.3%²⁹
- Internet penetration: 81%²⁸
- GDP: US$1.7 trillion²⁸
- Ecommerce market size: US$19.75 billion³⁰
Russia is an ecommerce powerhouse. Its online shopping sector is growing 10-times faster than traditional retail and the broader economy, according to the Moscow Times.³¹ Ecommerce has grown by 20% in each of the past seven years.³⁰ In 2018, 49.66 million³² Russians shopped across international borders. Russia’s payment landscape is complex. There is still a strong preference for cash-on-delivery and bank transfers, although cards and ewallets are gaining ground.³³ In fact, the majority of urban Russians in big cities like Moscow and St. Petersburg prefer the speed and convenience of local electronic payments.

Serbia
- Population: 7 million (not including population of Kosovo)³⁴
- Population with bank accounts: 71%⁴
- Population with mobile phones: 45.5%³⁵
- Internet penetration: 73.4%³⁴
- GDP: US$50.6 billion³⁴
- Ecommerce market size: US$354 million³⁶
Serbia has been slower than many Eastern European nations to adopt online shopping and digital payments. Keep in mind that this country is not a full member of the EU yet. It applied in 2009, and is still working³⁷ on aligning itself with EU norms and statutes. As for local payment preferences in Serbia, citizens here are still wary of digital payments.³⁸ While institutions are working on boosting consumer trust, cash-on-delivery remains the top payment preference.

Slovakia
- Population: 5.5 million³⁹
- Population with bank accounts: 84%⁴
- Population with mobile phones: 51.01%⁴⁰
- Internet penetration: 80.7%³⁹
- GDP: US$105.9 billion³⁹
- Ecommerce market size: USD$1.29 billion⁴¹
Slovaks like to shop online, and more than half of them use their mobile phones to do it.⁴¹ They tend not to discriminate between regional and international vendors, although they do have a strong preference for online department stores.⁴¹ Slovakia’s top preferred payment methods for online purchases are debit and credit cards, followed by payment-on-delivery. Mobile payments are becoming more popular in the country, though, especially as more local options come online.

Slovenia
- Population: 2.1 million⁴²
- Population with bank accounts: 98%⁴
- Population with mobile phones: 97%⁴³
- Internet penetration: 79.7%⁴²
- GDP: US$54 billion⁴²
- Ecommerce market size: US$403 million⁴⁴
Slovenians spend more time on mobile devices than many of their CEE counterparts, but they don’t use them for payments—at least, not yet. They mainly rely on prepaid cards⁴³ and payment-on-delivery.⁴⁵ Meanwhile, Slovenian banks⁴⁶ just launched a peer-to-peer bank transfer system called Flik.⁴⁷ This could push more Slovenians to embrace online banking and payments.

Payments in Every Local Flavor

The Central and Eastern Europe region is a melting pot of languages, cultures and local customs. There’s no way any ecommerce retailer or payments provider can win here without getting on board with local payments preferences—and there’s a lot of them.

Now is an opportune time to strategize on regional approaches. The COVID-19 pandemic is driving record ecommerce growth. It’s a shift that will have a major long-term impact on consumers’ shopping habits. The businesses that position themselves to win customers today will be long-term winners.

Looking to Grow Sales Cross Border?

Check out our State of Cross-Border eCommerce, U.S. Merchant Outlook

Sources:

Mark Stiltner

Mark Stiltner is a finance and fintech writer. From educating independent investment advisors on retirement plan management to helping families maximize their savings to educating businesses on global payment preferences, Mark has spent over a decade researching and educating audiences on complex financial topics. Mark has been a contributing author on blog articles and educational content for the Bank of Colorado, Pinnacle Bank, TD Ameritrade, First Data and Rapyd.