No credit card? Go e-shopping anyway.
Some 100 million consumers don't have access to a credit card, according to a recent Nilson Report. And a good number of those who do have credit cards are leery of using them online.
Checkspace, which allows vendors and consumers to post electronic checks for online payment, will announce next month wireless pay-by-check services and a paper check service for vendors. Also in January, the company will announce a payment reminder service.
The company's payment method stores consumer financial information on its servers and does not send it out over the Web to merchants. Rather, it transfers cash from a consumer's bank account through the National Automated Clearing House network, or ACH, into a merchant account. ACH is run by the federal government and is used by financial institutions and others to transfer funds.
Separately, Seattle-based Achex, which uses the ACH network in the same way, announced this week that BlueLight.com, the online retailer backed by Kmart, had made the Achex service available on its site.
Part of Kmart's overall strategy with its middle- to lower-income consumers is to make the Internet more accessible, said Janet Ball, director of advertising for BlueLight.com.
"A lot of our customers don't have credit cards, and for some, they just don't want to put their credit cards on the Web. There is a lot of concern about security," said Ball.
In the same vein, Kmart last week took over the operations of Spinway.com, which had provided free Internet access to BlueLight.com customers but shut down because of revenue shortfalls. Kmart will operate Spinway as an independent unit at least through the holiday season.
Checkspace and Achex aren't alone. Others in the fieldââ,¬"like PayPal, which has 4.5 million consumers and 100,000 merchants signed on to its peer-to-peer payment systemââ,¬"are growing at a steady clip, according to Jim Van Dyke, a senior analyst with Jupiter Communications, in San Francisco.
Big boys have plans, too
Not to be left out in the cold, major financial institutions are working on their own alternative payment schemes. San Francisco-based Bank of America has inked a deal with CheckFree Holdings Corp. to develop new platforms for person-to-person and other Internet payments. Those platforms are due sometime in 2001, according to company officials.
Wells Fargo purchased an equity stake in VeriSign to develop online payments and bill presentment.
In the meantime, Wells Fargo is hoping to capture the holiday shopping crowd with its "WellsFargoEasyOrder" payment service that allows consumers to use an electronic wallet system to pre-populate online forms, eliminating the need to re-enter shipping and credit card information with every purchase.E-Shoppimg Continues to Surge
The number of e-shoppers has reached its highest level yet and now stands at 16 million – around 1.3 million higher than May 2004.
This new peak, as measured by the internet monitor also probably reflects a renewed faith in the internet as a tool for conducting shopping – particularly for summer items such as holidays.
The average online spend amongst e-shoppers (in the last six months) has increased to £605 from £572 in May 2004. Total annual internet spend is now put at £19.4 billion – a ten per cent increase on August last year.
Among users of the internet who have not yet bought online, concern over credit card security is still the most cited reason, mentioned by 27 per cent. This is down from 31 per cent in May, reflecting a general improvement in confidence in the security of E-commerce. This improvement in confidence has been the long-term trend but there was a dip in confidence earlier this year.
Almost a fifth (18 per cent) of internet users who have yet to buy online say they still prefer the personal contact of going into a shop.
eBay maintains its position as the most visited e-commerce site in the last four weeks at 51 per cent of the online population, an increase of five percentage points since May. Amazon.co.uk has moved back up to number two with 37 per cent. Argos has also slightly improved its percentage of visitors in the last four weeks but has slipped back to third overall due to Amazon’s gains.
eBay also continues to enjoy the highest awareness of all the e-commerce sites measured (91 per cent – up from 78 per cent just one year ago).
Meanwhile, Tesco remains the most-visited supermarket site, visited by 23 per cent of internet users in the last four weeks, followed by Sainsbury’s (12 per cent), Asda (nine per cent), Iceland (six per cent), Safeway (five per cent), and Ocado (two per cent).
Consumers are increasingly going online this holiday season. Data from Nielsen//NetRatings's Holiday eShopping Index shows a 33 percent increase over last year.
Weekly shopping sessions at online retailers rose from 348.3 million over the holidays last year to 462.5 million in 2005. The increase is a 33 percent jump over the 2004 holiday season.
"Both new and experienced Internet buyers are not only researching products and comparing prices online before making a purchase, but they are also finding good holiday discounts online," said Heather Dougherty, senior retail analyst, Nielsen//NetRatings.
Week six of the 2005 holiday shopping season (December 4-10) experienced a 33 percent year-over-year gain over week six of last year (December 5-11).
Books, music, and video combined are the fastest growing category, with a 238 percent increase over last year. Dougherty attributes the growth to a vast selection of titles released during the holidays.
Toys and video games make the combined fastest-growing online retail category for the current holiday season, beginning October 30. Toy and video game buys online account for 149 percent growth from week one to week six. Flowers and gifts grew 117 percent; and consumer electronics grew 90 percent.
The Holiday eShopping Index looks at over 100 representative online retailers across 10 categories.
U.S. Home and Work Online Shopping Trips by Retail Category, 2004 and 2005 | |||
---|---|---|---|
Category | Week Ending 12/04/2005 | Week Ending 12/05/2004 | Growth (%) |
Books/music/video | 45,945 | 13,594 | 238 |
Apparel | 17,186 | 12,498 | 38 |
Home and garden | 12,325 | 9,592 | 28 |
Toys/video games | 11,283 | 8,795 | 28 |
Retail | 262,121 | 204,805 | 28 |
Consumer electronics | 24,880 | 19,614 | 27 |
Computer hardware/software | 27,129 | 22,228 | 22 |
Flowers and gifts | 6,216 | 5,154 | 21 |
Shopping comparison/portals | 53,078 | 49,277 | 8 |
Total | 462,468 | 348,267 | 33 |
Source: Nielsen//NetRatings, December 2005 |