But Macy’s is still bullish on Pinterest this holiday season—in particular, its video ads.
53% of online retailers said they believe instant credit or invoicing services to be “much more risky” than credit cards, CyberSource says.
53% of online retailers said they believe instant credit or invoicing services to be “much more risky” than credit cards, CyberSource says in a recent study on merchant use and perceptions of payment alternatives to general-use credit cards. But the study indicates that many merchants don’t understand the protections in such services, says Doug Schwegman, director of market intelligence.
“When using a third-party instant credit service like Bill Me Later, they guarantee that the merchant gets paid, but many merchants don’t yet understand what their options are,” Schwegman says. “It’s still very much a credit card world online. When some merchants first hear about instant credit, it sounds risky to them, but we think it’s nowhere near as risky as they think.”
The study is based on a survey of 348 retailers conducted last fall for CyberSource by Mindwave Research. Although gathered as part of a broader CyberSource study released in December, the “Sixth Annual Online Fraud Report,” the information on merchants’ use and perception of alternative payment methods was not been made public until now, CyberSource says.
The study found that, on average, 97% of retailers accept general-purpose credit cards, but the acceptance rate varies from 93% among online retailers with under $500,000 a year in sales to 100% for those doing $5 million or more.
Among alternative payment methods, the study found an average merchant acceptance rate for electronic checks or Automated Clearing House payments of 21%; PayPal, 19%; Gift cards or certificates, 17%; and 7% for both instant credit and private label cards.
Large retailers with $25 million or more in sales a year showed a stronger acceptance rate than did small retailers for e-checks (30% acceptance rate, compared to 17% for small retailers), gift cards (28% to 11%) and private label cards (19% to 4%).
But small retailers showed a higher acceptance rate for PayPal (30%, compared to 4% for large retailers). PayPal requires consumers to fund an account that PayPal uses to guarantee payments to merchants.
Although retailers consider private label credit cards less risky than other forms of e-payment -- 84% said that private label cards presented either the same or less amount of risk compared to general-purpose credit cards – on average only 7% of retailers accept private-label cards, the study found.