Whitepaper 26.08.2016 TRANSACTION SECURITY THE KEY TO UNDERSTANDING E-CUSTOMER BEHAVIOUR
Online payments seem to be a natural way to complete transactions in online stores. Perceived as easy and convenient, they are treated cautiously by some online shoppers. Why? Some customers are worried about the security of their personal data and money in their accounts. The lack of trust, which is the result of those fears, is one of the barriers the e-commerce industry has to break to reach another milestone of its evolution. Despite the development of the latest forms of online payment, there is still a group of customers who prefer traditional money transfer to a fast one, or they want to pay with cash on delivery. In this group of customers fast online payments raise fears over their security, as did contactless payments in traditional shops a few years ago. Today it is hard to imagine shopping without waving the card over a reader it s instant, convenient and secure. It should be the same with online shopping, especially, as the research results show, that convenient payment forms are one of the factors building the online store s credibility. And trust is one big step towards the beginning of a transaction. How do online stores adapt to the needs of their mobile customers? As many as 85,34% of the respondents of the research conducted by evl.pl for InPost considered the convenient payment forms as rather important or definitely important in the process of making a decision about the purchase in an online store. In the same research a question about payment option chosen by the respondents during online shopping done in the last three months was asked. What can be seen here is a considerable advantage of modern payment methods. As many as 85,33% of respondents declared paying with an online transfer. 55,07% of respondents paid with cards (both debit and credit). But the results also show that there is still a significant group of online shoppers who choose more traditional payment methods. 46,98% of respondents declared that they paid on collection. 32,95% paid with cash and 14,01% - with card. Traditional money transfer (made either in a bank or at the post office) has been chosen by 20,18% of respondents. The fact that traditional payment forms are getting less important has also been confirmed by the study conducted by Gemius. Consumers most often choose fast online transfers, such as PayByLink. This payment form is preferred by as many as 59% of online shoppers. In relation to 2015 popularity of payments with cards also increased (from 17% to 21%). Results of the research by evl.pl also show one transaction security-related issue. Payments made from mobile devices are still an important barrier for online customers. As many as 28,40% of respondents indicated problems with payment completion as an obstacle in shopping from the level of mobile devices. 16,35% of respondents claim that online payments made with mobile devices are not secure. 1
Why are customers afraid of online payments? To sum up, we are dealing with three important phenomena: There is a noticeable segment of customers who purchase online but not use modern payment forms Payments with cards are a relatively low percentage in transactions Customers indicate a problem with payments from the level of mobile devices One may also assume that payment methods available online are one of the barriers due to which only 37% of Poles shop online (source: Eurostat). What are then the reasons why online payment methods are still not as popular as they should be? Some indicators can be found in the research by evl.pl. Customers who did not pay with cards, were asked additional question regarding the reason of their reluctance to these types of payment. The answer was unequivocal here: as many as 46,69% of respondents had doubts concerning transaction security in the process of data transfer. Objections regarding the convenience of this solution were less important 24,64% of respondents made them. What is interesting, customers who have already been paying with cards, are generally positive in terms of security of this type of payment. This group was asked additional question about their impression of security of transactions made with cards. As many as 76,33% of respondents rated online payments with card as secure. Transaction security and reliability of the online store The payment data transfer (or, e.g. credit card details) may seem risky to customers. There are certainly factors that increase this reluctance even more - if we shop often and in many different stores, we are forced to pass our data to many different entities. Not always, however, are we 100% sure in terms of their reliability. It is worth mentioning that in the survey conducted by evl.pl, the credibility of the store was considered by respondents as the most important factor in the purchasing decision. As many as 90,49% (!) of respondents considered this issue as important. The problem of payment security can be directly linked to the trust to the store. Both elements form a whole and are the primary factor in determining whether a customer chooses to make a transaction or not. The credibility of the store and the security of payment and personal data - are set even higher than the total costs of purchase (product price + shipping + commission for payment), which, as rather important, and definitely important were rated by a total of 88,96% of the respondents. 2
How to increase the credibility of the online store? It is a difficult task, because the stores cannot act alone here. Currently, external sources of evaluation of the online store s credibility are used: 1. Reputable operators of payment Customers wishing to make an online payment can follow the reputation and brand recognition of the payment system service. Well-known brands, such as ecard or DotPay, worked on its opinion in a number of online stores, and are now recognized by customers as proven and reliable. And thus - they increase the credibility of the store. 2. Certification Conscious customers are increasingly paying their attention to prizes or certificates, which an online store takes pride in. A good example here is a growing popularity of platforms like TrustedShops, that is, services, which verify the reliability of an online seller and issue an appropriate certificate for them (the certificate is visible on the store s website in the form of the TrustedShops logo). Independent ways to make transaction security reliable 1. Renowned payment operator A well-known brand s image increases the online store s credibility 2. Certificates Positive verification by independent authorities taking care of customer security 3
But this is still not enough. A perfect solution of the payments security issue in online stores, is to find out how to not only take care of the buyers data security, but also have a certifying function. We are talking about a tool that will allow customers to leave their data in one secure place - instead of many, often less trustworthy online stores. A tool of this kind could be used by a single user in a number of online stores, which would also remember their preferences regarding payment and delivery forms - regardless of the page they are visiting. The security of data transferred by the tool should be supervised by a recognizable brand, which will offset the objections of buyers in relation to modern forms of payment. If such a tool facilitated the completion of transactions from mobile devices as well, we would get a product that could allay customers fears and familiarise them with convenient, fast and secure online payment methods. 4