SAN JOSE, CA -- 05/08/08 --
The results of the 2008 Annual Javelin
Consumer Payment Poll indicate that the majority of online consumers would
buy more if safer and more convenient payment options were offered. The
Payment Poll responders would each spend between $100 to more than $1000
more per year if better payment options were available online, which, based
on over 15 million active online buyers, translates to over $15 billion of
lost revenue opportunity for digital merchants.
For the fourth straight year, among those who demonstrate a preference, a
majority of consumers (80%) indicated a willingness to spend more online if
given safe, convenient payment options beyond the credit card. More choice
in payment options was the overwhelming driver of purchase behavior by a
three to one margin over improved content and by a six to one margin over
more affordable broadband access.
Commissioned by PaymentOne, the poll results were published by Javelin
Strategy & Research in April 2008. The poll surveyed over 2,000 U.S.
consumers regarding their online payment preferences around digital content
and services. Music, software, online games, security services, content
subscriptions, personals, video, and related premium services were among
the top categories of purchase interest among the consumers polled.
80 Percent of Consumers Would Buy More in 2008, up From 74% in 2006
Consumers are increasingly interested in using payment options that are
safer and more convenient than credit cards. 80 percent of decisive
consumers polled say they would "be more inclined to purchase online if
given a safer, more convenient payment method than credit card." This is up
from an average of 74% in 2006, and up significantly from 61 percent in
2003.
The numbers among younger consumers aged 18-34 were even higher, with over
83 percent indicating they would buy more
85% of fast growing Asian and Hispanic ethnic segments also showed much
more likeliness to buy if given payment alternatives to credit card
Among middle income segments of under $75K per year, 82% indicated they
would buy more.
"The major finding of the 2008 poll is that the availability of secure and
convenient payment options beyond traditional credit and debit cards can
drive significant incremental digital purchases, subscriptions and
transactions. This is an outstanding opportunity for online merchants to
grow their revenue through the introduction of payment alternatives," said
Bruce Cundiff, Director of Payments Research at Javelin Strategy &
Research.
Majority of Consumers Cite Privacy and Identity Theft Concerns
Despite aggressive campaigns by merchants and card companies, fraud and
identity theft concerns still loom large for a significant and growing
number of consumers, and hinder online shopping growth: Three-quarters of
those polled curtail their online shopping due to fears that their privacy
or financial information (or both) will be abused or stolen.
The top concerns (29% and 28%% respectively) are that information will be
either intercepted during a transaction or accessed by unauthorized
parties. In addition to credit card holders who had significant concerns
about buying online, 20 percent of consumers stated that they were not able
to transact online because they did not possess a credit card, which
represents a large opportunity for merchants who can address this
underserved segment.
"Digital media consumers of online games, music, video and more, including
younger demos as well as those with substantial disposable income, continue
to tell the industry that they want a safer, more convenient way to pay
online," said Brad Singer, Executive Vice President of PaymentOne.
"Deploying 'no credit card required' payment options represents a
significant growth opportunity and competitive imperative for online
merchants. Unlike other major product or service enhancements, expanding
pay options does not require up front investment to drive incremental
revenue growth. Many of our PhoneBill(TM) clients see increases of 15%-40%
or more in new subscriber and transaction uptake."
Nearly Two-Thirds of Consumers Have Abandoned Purchases at Point of Payment
-- Billions in Lost Sales
The new study found that 64% of shoppers have abandoned purchases at the
point of payment, representing millions of dollars of lost sales for
merchants.
When asked how much more a consumer would spend if there were easier and
safer alternatives to credit card, results showed an average increase in
spending of $64-$178 per month, or an average of just over $1000 per year
per consumer. For 15 million active online shoppers, this represents over
$15 billion dollars of pent up demand and lost sales.
Small Digital Purchases More Likely With "No Credit Card Required" Options
-- Consumers Prefer Local Phone Bill for Charging Smaller Purchases
Over half of all consumers indicted they are more likely to buy if "No
Credit Card Required" options are available at the digital sites.
"No credit card required" payment options represent significant potential
for content providers and network operators to attract more consumers.
Consumers are increasingly interested in charging digital content and
services to an existing trusted bill. In fact, when asked specifically
which existing bill they would like to add small purchases to, consumers
overwhelmingly pick their existing phone bills:
Over half (58%) of decisive consumers would prefer to add online charges to
their existing local phone and/or broadband bills instead of credit card.
These existing bills are generally trusted, easy and convenient methods for
consumers to utilize for making digital goods and services purchases. Since
phone service is considered a necessity by most, it's one that the typical
consumer will not allow to lapse. These existing billing instruments are
especially attractive because they reduce the need for consumers to
establish multiple, separate billing relationships, and do not require them
to repetitively disclose sensitive information across multiple sites for
small purchases. For merchants, existing bills now offer attractive
economics and high retention and stickiness.
Implications for Digital Services and Network Operators
PaymentOne is the leading provider of "no credit required" payment options
for online digital merchants. PaymentOne's digital media clients alone have
generated over $3 billion in incremental revenues by deploying "no credit
card required" payment options, and have acquired tens of millions of new
subscribers that were previously unreachable.
For a complete copy of the 2008 Annual Consumer Payment Poll, please visit
http://www.paymentone.com/2008poll.
Media interested in speaking with Javelin Strategy & Research directly may
do so by contacting Kathleen McCabe at 925-225-9100 Ext 15 or via email at
k.mccabe@javelinstrategy.com.
About PaymentOne
PaymentOne Corporation is one of the world's fastest growing online Payment
Services Providers (PSPs) and leading provider of PhoneBill(TM) to digital
media providers. Founded in July 2000, PaymentOne has pioneered payment and
marketing services that connect digital merchants and network operators and
accelerate the adoption of online content and services by over 25%.
Based in Silicon Valley, PaymentOne has generated over $3 billion in new
digital revenue over the last 36 months for its clients and partners. The
company manages a network of over 1000 telecommunication/broadband
providers, mobile operators and content partners including leading ISPs,
BSPs, Telcos, broadband operators and media companies such as America
Online, United Online, NetZero and Time Inc.
To help online merchants attract, convert and retain a wider audience,
PaymentOne's integrated suite of revenue optimization services includes a
unique set of non-credit card payment alternatives, macro and micro
payments, identity verification and fraud detection, traditional payment
processing, global payments, and a co-marketing distribution network. The
company's flagship PhoneBill service provides merchants with access to over
180 million consumers with mobile, broadband and land line accounts.
To learn more about PaymentOne, visit www.PaymentOne.com or call
800-747-4028.
About Javelin Strategy & Research
Javelin is the leading provider of independent, industry-specific,
quantitative research and strategic direction for payments and financial
services initiatives. Javelin conducts rigorous research and analysis to
create successful strategies related to financial institutions, payments
firms, technology vendors, merchants and billers, regulators and other
policy-makers, associations, and consumer or business end-users. Javelin
can be found on the Web at www.javelinstrategy.com.
Contact
Lisa Perteet
Email Contact
408-362-4100
