Consumers Seek New Payment Methods To Allay Internet Security Concerns
Consumers willing to purchase online more if assured their personal information is secure, NYCE study saysConsumers who limit their online shopping say they would make more purchases online if their financial institution offered them a safe payment method. This is according to research commissioned by NYCE Payments Network, LLC, a leading U.S. electronic payments network and a Metavante (NYSE:MV) company. Metavante is a leading provider of banking and payments technology.
SECAUCUS, N.J., July 1, 2009 - Consumers who limit their online shopping say they would make more purchases online if their financial institution offered them a safe payment method. This is according to research commissioned by NYCE Payments Network, LLC, a leading U.S. electronic payments network and a Metavante (NYSE:MV) company. Metavante is a leading provider of banking and payments technology.
Security remains a top concern for many
The research, conducted by marketing research firm Analytica Inc., surveyed 2,608 consumers for their attitudes about shopping online and their reasons for choosing the payment methods they use. The findings indicated that consumers remain concerned about the security of their personal information when shopping online:
- Of respondents who had never purchased on the Internet, 43.5 percent gave security concerns as the reason.
- Among those who rarelyshopped online, 26.4 percent cited security as the reason they did not do so more often. Security was the second most commonly cited reason, behind a preference for the in-store shopping experience.
Market exists for financial institution payment offering
The NYCE study asked whether respondents would be interested in trying a secure payment method offered by their financial institution. Even those who rarely or never shop online now indicated interest in such a solution:
- Eighteen percent of those who had never purchased anything online indicated they would likely try online shopping using a secure payment method offered by their financial institution.
- Among those who rarely shopped online, 27.6 percent indicated they would likely make more purchases using such a method.
- Nearly half (49.9 percent) of the frequent Internet purchasers who were reached for the survey online indicated they would consider replacing their current method with one offered by their bank or credit union, as long as they felt it was safe and secure.
“We have found that consumers are not necessarily loyal to the online payment options available to them today,” said Steve Rathgaber, president, NYCE. “This is good news for financial institutions that would like to keep consumers' demand deposit accounts central to their payment relationships. Offering an online payment method gives institutions the potential not only to generate new revenue by encouraging consumers to make more purchases, but also to solidify their relationships with the people they serve.”
In 2008, NYCE introduced SafeDebit™, a secure Internet purchase solution. The SafeDebit solution enables consumers to pay for Internet purchases directly from their deposit accounts without disclosing their debit card information online. The system validates shoppers through their online banking credentials, and generates a pseudo card number for one-time use on a merchant's site.
Additional Resources
2008-2009 Consumer Internet Purchase Study: Key Highlights
SafeDebit Demo
Methodological Notes
In late 2008, marketing research firm Analytica Inc. surveyed 2,608 consumers regarding their behaviors and preferences related to Internet purchases, as well as their interest in SafeDebit™ — a new Internet purchase payment method from NYCE. The surveys were partitioned into two samples:
- 1,608 surveys came from a stratified random sample of a population of U.S. e-mail addresses, conducted over the Internet.
- Using the same survey questions, 1,000 interviews were conducted over the phone with a U.S. representative RDD (random digit dialing) sample.
Both samples were representative of the U.S. population by geography, ethnicity, age, income and gender. Surveys were completed between December 2008 and February 2009.
By conducting a portion of the survey using RDD and not limiting it to Internet users, Analytica was able to eliminate an Internet bias and determine whether there are individuals that would like to purchase (or purchase more) on the Internet but don't do so because they are not happy with the payment alternatives currently available.
About NYCE
NYCE Payments Network, LLC, a Metavante company, helps its clients grow with innovative new products and strategic alliances that enable them to capitalize on the efficiency, consumer convenience and security of electronic real-time payments. The NYCE Network provides consumers with secure, real-time access to their money, offering hundreds of thousands of ATM locations and millions of point-of-sale locations nationwide. The NYCE Direct Bill Payment service offers cardholders a convenient way to pay bills online in real-time using their deposit accounts. NYCE Balance Transfer services drive asset growth for consumer credit issuers through automated balance transfer/consolidation payment services. Headquartered in Secaucus, N.J., NYCE Payments Network, LLC, (www.nyce.net) is a wholly owned subsidiary of Metavante (NYSE:MV).