US online retailers increase payment options
Online fraud and the credit squeeze has forced US retailers to increase the number of payment options available and it seems to be boosting sales.
Due to U.S consumers’ worries about the risk of fraud from online purchases with credit cards, e-retailers are increasingly offering alternative payment options. E-retailers on average accepted 2.6 different payment methods this year, up from 2.1 in 2005, says a report from U.S. payments processor CyberSource.
Offering more payment methods appears to boost sales. Last year, sales increased by an average 14 percent for e-retailers offering three or more payment options, CyberSource says.
More than half of online users who are worried about ID theft say that concern has affected their online shopping, a Gartner survey in August 2007 found. Among those consumers, 13 percent said they have stopped shopping online; and 68 percent said they’re more cautious about where they purchase goods online.
In the US there are an increasing amount of users who are not shopping online because of a fear about ID theft and getting their credit card number stolen.
This can be a problem for lesser-known small and midsize retailers, who are most likely to lose business from consumers concerned about online payment, Avivah Litan, a vice president and analyst at research firm Gartner says. “The promise of the Internet was that it would level off the playing field, but it didn’t turn out that way.”
Alternative payment options include Bill Me Later, which sends customers a monthly bill and lets them pay by cheque or money order; and Google Checkout and PayPal Express Checkout, which let customers’ provide financial details only to them, rather than giving personal information to retailers.
