Online merchants are losing over $5 billion in digital commerce revenues due to the lack of secure alternative payment options for consumers, according to research conducted by Javelin Strategy and released by US e-payments firm PaymentOne.
The poll of 2200 US consumers shows that over two thirds - 78% - would make more online purchases if given a safer, more convenient payment method than credit and debit cards.
PaymentOne says the survey shows choice in payment options to be the overwhelming driver of purchase behaviour. Nearly half of consumers are willing to spend more for monthly services simply for the convenience of using their existing billing system.
Javelin estimates that merchants are collectively losing nearly $5.5 billion in incremental revenue and tens of millions of potential subscribers per year.
Bruce Cundiff, research analyst, Javelin Research, says: "The availability of secure and convenient payment options beyond traditional credit and debit cards can drive significant incremental purchases - indicates an outstanding opportunity for online merchants to grow revenue through the introduction of payment alternatives."
The research also found that over half of the consumers surveyed - 54% - said they had curtailed their online shopping due to fears that their financial information would be stolen. The top concern, cited by 28% of respondents, was that information will be either intercepted during a transaction or accessed by fraudsters.