Internet merchants can raise their transaction rates by 20% by offering alternatives to credit card payments to online shoppers.
According to a study of US Internet payment practices conducted by CyberSource Corporation, those merchants offering one payment type, such as general purpose credit cards, convert 60% of their shoppers. Those offering four types, such as credit cards, gift certificates, eChecks, and PayPal, convert 72% of their shoppers - a 20% increase. Currently, 18% of North American online merchants offer one payment type, another 35% offer two. Only 20% offer four or more.
Doug Schwegman, CyberSource director of customer and market intelligence, comments: "Adding payment types can be effective because the Internet is now reaching well beyond the early adopter. We're hitting different demographics now; people who may prefer not to use credit cards and people who don't have them."
According to the survey, 38% of merchants say they plan to investigate or offer a new payment method in the next 12 months. Methods they plan to implement first are: electronic cheques (31%), PayPal or other non-card payments (26%), private label cards (19%), gift certificates (14%), instant credit (13%), and recurring billing (7%).