How much more would consumers spend if they didn’t have to share sensitive person data or type in long credit card numbers to complete their purchase? According to an online survey conducted by Javelin Strategy & Research, online merchants could add an aggregated yearly revenue amount of $109.8 billion simply by offering alternative payment options that don’t require credit cards. Conducted this fall, the 2011 Consumer Payment Poll revealed that consumers have dramatic and growing concerns about the safety and privacy of using credit or debit cards for online transactions. Pretty substantial findings, when more than half of consumers surveyed admitted to abandoning a check out process due to security fears.
While it’s hard to place a price tag on security and privacy, the consumer study has found in general, 4 out of 5 consumers would spend more online if offered a more secure way to pay. For those who are unfamiliar with other alternatives, enter PaymentOne, an interesting Silicon Valley-based company we met at this year’s Pepcom’s Mobile Focus Event. If you hadn’t guessed it, P1 is a digital payment processing company, but they do things a little differently. Instead of routing your payments to a debit or credit card, all transactions conveniently show up on your monthly mobile phone bill instead.
And with one of the largest telecom and user bases in the mobile payments industry, the company is positioned strongly as consumers are looking for more secure ways to pay for goods online.
(About the survey) Commissioned by PaymentOne, poll results were published by Javelin Strategy & Research surveyed over 2,000 U.S consumers regarding their online payment preferences for digital content and services. These products included games, mobile apps, music, streaming media and entertainment, software, security services (e.g. antivirus and anti-spam), subscriptions, etc.
Other findings from the survey also pointed to additional ‘dangers’ and concerns that ultimately kept consumers from making their online purchases, concerns such as:
- Being spammed to death by merchants or websites
- Personal information being sold to other merchants
- Credit card information being intercepted
- Unauthorized parties having access to personal information
- Mis-use of credit card information by merchants
- Just plain hate providing personal and financial data online
- Worries of personal information being air intercepted when paying via phone
The results of the study seemed universal across all age groups and income brackets indicating that the vast majority of online consumers, regardless of socio-demographics, are feeling uneasy to use credit cards online. So for those who have been a victim of credit/debit card fraud (way too many times here), there’s definitely exciting things on the horizon for the online payment space.