Shoppers are paying more attention to the payment options they find on sites. With constant news of security breaches and online scams, one of the biggest challenges for online retailers is finding a payment method that consumers trust. A recent study from Bizrate shows the situation is worse than marketers may think, with a large percentage of consumers left dissatisfied with their payment options. This article will discuss the findings from this study and how marketers can use them to create better ecommerce experiences for their customers.
There are a large number of payment options that business owners can use on their site. However, consumers want more than a functional payment system. It’s important for business owners to have options that consumers trust to handle the transaction and protect their personal information. This is something that many websites have not done well. According to the Bizrate study, more than three-quarters (76%) of online shoppers are ‘dissatisfied’ with either the security for their credit card or personal information online.
Even if a lot of consumers are dissatisfied, the online sales revenue for the past year shows that people are finding options they are willing to use. The right option isn’t just about having the highest security and consumer protections. People still want the system to be easy to use and intuitive. This analysis fits with what the researchers found when looking at the most used payment platforms.
“Among these tech transactional titans, it is those that have low barriers for usage and that have put consumer protection in the forefront, that have earned the greatest amount of trust,” stated Hayley Silver, VP of Bizrate Insights, a division of Connexity. She continued, “PayPal ranking number two, and with greater than 50% trust from the younger generations, could be a ‘Major Opportunity’ that deserves more investigation among its customer base. With low barriers to usage and such high levels of trust, PayPal could make a strong case to add a wallet-less payment option to its arsenal.”
As Silver indicated in her statement, how much people trust online payment methods vary by generation and gender. Much of this can be traced to the fact that younger generations have more-or-less grown up with online payment systems and are more comfortable than older generations. The older the demographic, the more inclined they are to trust traditional financial institutions likes their bank or major credit card. This can be seen in some of the other key findings from the study.
Among the other finding of interest:
Men are far more likely than women to trust Google and eBay.
Generation Y is most trusting of their bank, PayPal and Amazon – with less than 50 percent of Generation Y trusting each.
Generation X has greater than 50 percent trusting their bank and PayPal.
The only entity earning trust from at least 50 percent of Boomers and Seniors is their bank.
American Express garners substantially more trust from older generations than from younger generations.
Apple, eBay and Google are more likely to be trusted by younger generations.
The study had a good, though somewhat limited, sized sample. Data from the study was collected from 6,256 online buyers from October 23 – 28, 2014. The Bizrate Insights Payment Security Study #1 was conducted via the Bizrate Insights survey platform and offered to online buyers immediately after purchasing from the Bizrate Insights Network of over 5,000 e-commerce retailers in the US and Canada.
Business owners and marketers can use this information to create ecommerce experiences that shoppers trust. For example, including PayPal as a payment option makes sense, especially for sites that expect traffic from young adults. Even if the retailer loses a little in fees to PayPal, it’s better to losing the consumer because the site uses a payment platform that the audience doesn’t trust.
As was mentioned earlier, the evidence shows that people will and are buying online once they find a payment option they can trust. Using this information to create a more trustworthy ecommerce site can help business owners increase sales.
For a similar research about in-store payments, read this article on why local business needs mobile payments.