New Rapyd research uncovers Iceland’s most popular payment methods and the ways Icelanders prefer to shop and pay
With just 344,000 residents, Iceland is a small but influential single-market area.1 Tourism is one of Iceland’s biggest industries, and it’s no surprise given the natural wonders of the small island nation. Alongside the tourism industry is a flourishing ecommerce industry, where a large percentage of Icelandic consumers (83%) shop online.2
When it comes to ecommerce in Iceland, 20% shop via computer on a weekly basis while 17% shop via mobile. Digital wallets are gaining traction as one of Iceland’s most popular online payment methods, especially since Icelanders are keen to buy via mobile.
About the Study
In March and April 2022 Rapyd conducted a research study to understand the financial habits, payment method choices, considerations and preferences of consumers in nine European countries. We surveyed 4,286 online consumers in Denmark, France, Germany, Iceland, Italy, the Netherlands, Sweden, Spain and the UK. Consumer respondents represent a full spectrum of household income levels from low to high across each country. Household Income questions were presented in locally relevant amounts and currencies. The survey was conducted online amongst household decision-makers over 18 years of age. To participate, the survey respondents must have made a purchase online in the last month.
To help our clients understand cross-border commerce and attract and retain more customers in new markets, Rapyd conducts an annual survey of consumer payment and purchase behaviors in Latin America, Europe and the Asia Pacific.
83% of Icelandic Consumers Shop Online
We asked Icelandic online shoppers which devices they used to make online purchases.
Tech Adoption In Iceland
As part of our annual study of payment and payout preferences, purchasing habits and financial product adoption in Iceland, Rapyd asked Icelanders how open they are adopting to new technology. While pretty equally split, the majority of Icelanders (62%) see themselves as being in the middle as members of the early and late majority. A full 22% see themselves as early adopters of new technology. Icelanders rarely use cash and favor newer, alternative digital payments.
Iceland’s Popular Payment Methods & eCommerce Trends
Nearly 8 in 10 (78%) of Icelanders used credit cards for a recent online purchase, and almost half (46%) consider it their first choice payment method. Over one-third of Icelanders have recently used a digital wallet for an online purchase, showing the payment method’s growing popularity.
Popular eCommerce Products and Methods of Purchase
Icelanders are purchasing a wide variety of products and services online. 65% of respondents report making recent restaurant and takeout purchases online, followed closely by fashion products at 64%.
- 39% of Icelanders used PayPal in the past 90 days
- 78% of Icelanders used credit cards and almost half, 46%, prefer them
- Debit cards were the 2nd most commonly used online payment method
What People Buy Online in Iceland
When asked what types of eCommerce purchases they had made in the last 90 days, here’s what Icelandic consumers reported.
- 65% of Icelanders purchased takeout food in the last 90 days
- 47% of Icelanders reported purchasing groceries
- 46% of bought books, music and other media
How Icelanders Prefer to Pay for In-Store Purchases
Most of the country operates essentially cash-free.3 So when it comes to payment preferences in-store, cash use is minimal in Iceland, while cards dominate. In Iceland, most people use credit (72%) or debit cards (67%) for in-store purchases. Cash is on the decline in the country. Similarly, while 1 in 4 Icelanders used cash for a recent purchase, less than 1% chose it as their first choice of payment method.
- Credit cards are the most common form of payment for in-store purchases – used by 72% of Icelanders in the last 30 days
- 1% of Icelanders reported preferring to pay with cash
- Apple Pay was up to 20% – huge growth for the payment platform
- Only 4% of respondents reported using PayPal
How Iceland Gets Paid
Accepting payments in Iceland isn’t the only consideration for businesses. Many businesses operating across the European Union also need to consider how their workers, partners and suppliers and individuals prefer to receive payments.
Using primary research, Rapyd has compiled country-level research on the most used and preferred payout methods in Europe.
Types of Payouts Made to Consumers in Iceland
The following chart illustrates the most common ways Icelanders report receiving payments.
- Most respondents reported receiving payouts for salary, wages and tips
- Direct bank transfers are the most common way to pay out
- Cash is the 2nd most popular way to receive personal gifts
How To Receive Funds In Iceland
This chart shows the most common ways Icelanders receive disbursements based on the payout type.
- Bank transfers are the most common way for Icelanders to receive funds
- Cash is another way to receive a personal gift, next to bank transfers
- Gift Cards were only used for rebates and allowances
What Disbursement Features Matter Most to Icelanders?
When businesses send payouts to Icelanders the most important feature is security followed closely by payouts available for immediate use. Icelanders prioritize data security and demand that their personal information be kept safe. Over half of all Icelanders surveyed rated all of the features we tested as being important. Businesses need to deliver disbursements that offer security, speed, low fees, notifications and the ability to receive funds in local currencies.
- 90% of Icelanders ranked “keeping my personal data safe” as extremely important
- 66% ranked “no transaction fee” as an important factor
- 64% said receiving same-day payments was extremely important
How To Receive Funds In Iceland
This chart shows the most common ways Icelanders receive disbursements based on the payout type.
- Bank transfers are the most common way for Icelanders to receive funds
- Cash is another way to receive a personal gift, next to bank transfers
- Gift Cards were only used for rebates and allowances
Simplify Payments in Iceland and 100s of Other Countries
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Sources:
1. European Payments Council. Country Profile: Cashless Iceland. https://www.europeanpaymentscouncil.eu/news-insights/insight/country-profile-cashless-iceland
2. The European Digital Commerce Association. Ecommerce Europe: https://ecommerce-europe.eu/
3. European Payments Council. Country Profile: Cashless Iceland. https://www.europeanpaymentscouncil.eu/news-insights/insight/country-profile-cashless-iceland
