Report: 80 Percent of Online Consumers Would Buy More With Safer Pay Options
San Jose, Calif. — May 8
The results of the 2008 Annual Javelin Consumer Payment Poll indicate that the majority of online consumers would buy more if safer and more convenient payment options were offered. The Payment Poll responders would each spend between $100 to more than $1,000 more per year if better payment options were available online, which based on more than 15 million active online buyers, translates to more than $15 billion of lost revenue opportunity for digital merchants.
For the fourth straight year, among those who demonstrate a preference, a majority of consumers (80 percent) indicated a willingness to spend more online if given safe, convenient payment options beyond the credit card. This is up from an average of 74 percent in 2006, and up significantly from 61 percent in 2003.
The numbers among younger consumers aged 18-34 were even higher, with more than 83 percent indicating they would buy more. Eighty-five percent of fast-growing Asian and Hispanic ethnic segments also showed much more likeliness to buy if given payment alternatives to credit card.
More choice in payment options was the overwhelming driver of purchase behavior by a three-to-one margin over improved content and by a six-to-one margin over more affordable broadband access.
Among middle income segments of under $75,000 per year, 82 percent indicated they would buy more.
“The major finding of the 2008 poll is that the availability of secure and convenient payment options beyond traditional credit and debit cards can drive significant incremental digital purchases, subscriptions and transactions. This is an outstanding opportunity for online merchants to grow their revenue through the introduction of payment alternatives,” said Bruce Cundiff, director of payments research at Javelin Strategy & Research.
Majority of Consumers Cite Privacy and ID Theft Concerns
Despite aggressive campaigns by merchants and card companies, fraud and identity theft concerns still loom large for a significant and growing number of consumers, and hinder online shopping growth: Three-quarters of those polled curtail their online shopping due to fears that their privacy or financial information (or both) will be abused or stolen.
The top concerns are that information will be either intercepted during a transaction or accessed by unauthorized parties. In addition to credit card holders who had significant concerns about buying online, 20 percent of consumers stated that they were not able to transact online because they did not possess a credit card, which represents a large opportunity for merchants who can address this underserved segment.
Commissioned by PaymentOne, the poll results were published by Javelin Strategy & Research in April 2008. The poll surveyed more than 2,000 U.S. consumers regarding their online payment preferences around digital content and services. Music, software, online games, security services, content subscriptions, personals, video and related premium services were among the top categories of purchase interest among the consumers polled.