Report: Online Merchants Dropping the
Ball on Alternative Payment Options
Oct. 25, 2010
Consumers are spending more online and more than half are
paying using alternative payment options, according to a new report from
payments consultancy Javelin Strategy & Research and Shop.org, the
e-commerce division of the National Retail Federation. But while consumers show
interest in alternative payment methods—such as PayPal, Bill Me Later, Checkout
by Amazon, eBillme or Google Checkout—the report found only a third of online
merchants offer those methods. “Consumers are moving away from using credit
cards and have increasingly adopted pay-now options such as debit cards or
pay-before options such as gift cards,” said Mary Monahan, Javelin’s research director.
“Many merchants underreport the market use of debit cards and are not aware of
the much broader mix of payment options that consumers are already actively
using. If merchants are not aware of the actual mix of debit, credit card, and
other payment transactions they are handling, it may prevent them from taking
full advantage of discounting opportunities, routing, or reduced fees available
under the Durbin Amendment regulations, scheduled to go into effect in early
2011.” The report, Online Alternative
Payments: A Merchant vs. Consumer Divide, found that less than 20 percent
of the merchants surveyed consider adding online alternative payment options a
high priority over the next 12 months.