On Tuesday, Javelin Strategy & Research (Pleasanton, Calif., U.S.A.) and PaymentOne (San Jose, Calif., U.S.A.) released a study of consumers' online and mobile purchasing attitudes, which found that by a margin of almost 4 to 1, consumers believe direct carrier-billed mobile payments are more secure than using credit and debit cards for online digital purchases. The survey also showed that 4 out of 5 consumers would spend more online if offered an easier and more secure way to pay.
According to the survey, which polled 2,000 U.S. consumers, online merchants could add aggregated yearly revenue of $109.8 billion by offering an alternative “no credit-card required” way to pay at checkout, which allows consumers to spend money while not sharing sensitive personal data or credit card information
More than half of consumers surveyed admitted to abandoning online purchases at check-out because of these concerns, showing a huge loss in potential revenue for online merchants, says Payment One. Nearly 6 in 10 consumers are more likely to visit and buy from sites that offer "no-credit-card-required" payment options. Survey results further indicated that digital merchants could realize incremental average monthly revenue of $89 per consumer simply by increasing the available payment choices.
"According to the 2011 Online Payment Poll, consumers are concerned about the use of credit cards online and related issues of privacy, fraud, security and convenience," said Phil Blank, managing director at Javelin Strategy & Research. "If digital merchants simply offered consumers an alternative way to pay, such as mobile carrier-based payments, 79% of decisive consumers indicated they would spend more, driving significant new incremental revenue from subscriptions, transactions and purchases.”
Survey respondents voiced extreme concerns around using credit cards to shop online, especially for smaller digital purchases. Privacy and security topped shoppers' concerns, especially when it came to concerns about merchants sending junk mail (55%) and merchants selling personal information (54%).
Shoppers' security and privacy concerns were universal across all age groups and income ranges, indicating that, regardless of their socio-demographic status, consumers would be inclined to purchase more online if their security and privacy concerns were addressed.
In the survey, consumers identified the wireless bill as the preferred method (58%), followed by the landline/broadband bill (22%) as the safest and most secure alternatives for digital purchases.
Of all survey respondents, 95% have mobile phones, yet just 36% have already used them to make a payment.