Jump in adoption of alternative payment methods
16 January 2008 | 7545 views | 0
Around 30% of US online retailers now offer customers the option to use alternative payment methods (APM) - such as Google Checkout, PayPal and Bill me Later - which is a 25% increase since February 2007, according to a poll conducted by interactive marketing firm Brulant.
The survey of 100 US e-retailers, conducted in November, shows that instant credit outfit Bill Me Later saw the highest adoption, with 21% of firms polled offering the service, a rise from 17% last February.
PayPal came closely behind with 19% of firms offering the service - up from six per cent at the beginning of last year. Meanwhile, 10% of e-retailers now offer the Google Checkout service, double the adoption it saw in February 2007.
Around five per cent of the surveyed companies now offer all three of these alternative payment options, compared to none in February last year. Adam Cohen, principal, Brulant, says this demonstrates that retailers want to keep customers happy by providing as many options as possible.
"Online consumers are looking for more payment options, and retailers are finding that offering more options is leading to increased conversions," says Cohen.
He says that with PayPal in particular, shoppers who are concerned about credit card fraud have an option "that has established a high level of trust".
A US study released by Javelin Research & Strategy in September last year predicted use of APMs will increase to gain 30% of all online transaction volume by 2012, up from 14% in 2007.
Javelin said consumers view alternative payment methods as a trusted and viable way to pay for online purchases.
The research house predicted that e-mail payment accounts - primarily PayPal - would see the biggest growth, jumping from five per cent to 11% by 2012 whilst instant credit services, such as Bill Me Later, would only see a small rise.