The web comprised nearly 42% of the growth in the U.S. retail market last year. E-commerce represented 11.7% of total sales in 2016, but ...
Before introducing new online payment methods, retailers should strengthen credit card security measures, Jupiter says. 66% of consumers polled by Jupiter say they would not be comfortable using online debits with PINs if that option were available.
Internet retailers could realize cost advantages from enabling non-credit card-based payments, but most consumers aren`t yet ready to embrace alternatives such as debits with PINs, according to findings from Jupiter Research Inc. 66% of consumers polled by Jupiter say they would not be comfortable using this option online if it were available.
That may change as newer users` online tenure increases, however, if it parallels consumers` gradual acceptance of credit card use online. Across the survey group, new users were more likely than those with five or more years of experience online to regard non-credit card options as a risky or less desirable way to pay online, Jupiter found.
Consumers` comfort level with credit cards, the longest-entrenched method of online payment, was associated with online tenure in Jupiter’s survey. 72% of those with longer experience online said they were comfortable using credit cards online compared with only 33% of those online for a year or less. Among online credit card alternatives, “bill-me-later” options have the highest acceptance rate among consumers, with 68% saying they’d be comfortable using this payment method online.
While credit card-like payments represent an opportunity for online retailers who have customers without their own credit cards such as teens, Jupiter cautions that retailers should approach new online payment methods cautiously, particularly if they require more information from consumers. Asking for such data could alienate existing customers, Jupiter says.
With 83% of online consumers now holding credit cards, retailers should give first priority to taking steps to reduce fraudulent transactions, such as address verification, according to Jupiter. Alternative payment methods should be assessed in light of their potential use by target audiences, the retailer`s potential liability for fraud, and consumer education as well as dispute resolution needs.
Consumers have less to fear than retailers do in online credit card use, Jupiter points out. “Online retailers have more to fear, and in order to avoid becoming targets for fraud rings, they should bolster internal security mechanisms while encouraging legitimate users to use their issuer protected credit cards,” Jupiter says.