The survey, commissioned by PaymentOne and conducted by Javelin Strategy & Research, surveyed over 2,000 US consumers in September regarding their online payment preferences around digital content and services, and found that by a margin of almost four to one, consumers believe direct carrier billed mobile payments are more secure than using credit and debit cards for online digital purchases.
So, how much more would consumers spend if they didn't have to share their sensitive personal data or type in a long credit card number to complete their purchase? The answer, according to the survey, is that online merchants could add aggregated yearly revenue of $109.8 billion, simply by offering an alternative 'no credit card required' way to pay at checkout.
Worringly for merchants, credit card companies and the eCommerce industry generally, the poll revealed that consumers have 'dramatic and growing concerns' around the safety and privacy of using credit or debit cards for online transactions. More than half of consumers surveyed admitted to abandoning online purchases at check-out because of these concerns, confirming a huge loss in potential revenue for online merchants.
With four out of five consumers polled indicating they would spend more online if given an easier and more secure payment alternative to credit or debit cards, PaymentOne says this indicates that digital merchants could realise incremental average monthly revenue of $89 per consumer simply by increasing the available payment choices. And, they say, pent'up demand and lost opportunity for commerce was consistent across a wide range of segments such as age, ethnicity, income, geography, early/late adopters of technology and gender.
According to a spokesperson for Javelin Strategy & Research, digital merchants are losing a lot of money because consumers have huge concerns about the use of credit cards online and the related issues of privacy, fraud, security and convenience. 'If digital merchants simply offered consumers an alternative way to pay, such as mobile carrier based payments, 79 percent of decisive consumers indicated they would spend more, driving significant new incremental revenue from subscriptions, transactions and purchases. With an estimated $110 billion in new revenue for digital merchants being left on the table each year in the US alone, this 'commerce gap' represents a massive untapped opportunity.'
The consumers in the United States voiced 'extreme concerns' around using credit cards to shop online, especially for smaller digital purchases, according to Javelin, with privacy and security topping shoppers' concerns like:
'¢ I'm concerned a merchant or website will start sending me junk mail (55 percent)
'¢ I'm concerned my personal information will be sold to other merchants (54 percent)
'¢ I'm concerned my credit card information will be intercepted (51 percent)
'¢ I'm concerned unauthorised parties will access my personal information stored by merchant (51 percent)
'¢ I'm concerned my credit card information will be misused by merchants (41 percent)
'¢ I don't like the idea of providing private or personal financial information (38 percent)
'¢ I worry that my personal financial information could be intercepted over the air when I enter it using my phone (32 percent)
Looking ahead, PaymentOne and Javelin say the survey indicates that mobile payments are the future,although of 95 percent of survey respondents who have mobile phones, only 36 percent have already used them to make a payment.
Neverthless, the two companies say the online payment poll finds strong interest for using a mobile phone for payments beyond subscriptions, service bills and mobile apps. Among consumers who have used their mobile devices to make payments, nearly one in four who were surveyed have purchased digital entertainment, one in three purchased entertainment tickets, and approximately one in four purchased travel and apparel.
Merchants deploying additional payment options, including mobile payment options that enjoy strong consumer interest, can reach and convert more potential consumers and capture millions of dollars in additional revenue, according to PaymentOne and Javelin.