Digital money outfit Ukash says the credit crunch has helped it record a 130% increase in the number of pre-paid vouchers issued in the UK and Europe this September over the same period last year as online shoppers rein in their spending on credit cards.
The firm says the crunch is making consumers more wary about credit cards and leading them to pay for their online purchases with vouchers instead. Rather than paying on credit, Ukash users buy vouchers at retailers and then enter the unique number at participating Web sites.
The vendor also claims its growing popularity is being driven by security concerns, with people unwilling to enter their personal details online. It cites research from Interactive Media in Retail Group showing a two per cent drop in confidence in online shopping security in the last year.
Mark Chirnside, CEO, Ukash, says: "We believe that there is a definite shift in the way consumers are shopping online and the increase in use of cash pre-paid methods is down to two factors. Firstly, consumers are concerned about fraud and revealing their details online. Secondly, the credit crunch has made people much more cautious about credit and we are seeing a return to the use of cash."
Earlier this month the European Commission (EC) set out proposals for a legal framework governing the issuance of electronic money which it hopes will accelerate take-up of the technology.