New American Express Survey Shows 71% of
U.S. Merchants Surveyed Say Digital Sales Are Increasing, But
Nearly 40% of Consumers Surveyed Have Halted Purchases over
Security Fears
Merchants may be losing out on potential ecommerce sales due to
shoppers’ concerns over the security of their information in the
digital world, according to a survey released today by American
Express (NYSE:AXP). The 2017 American Express Digital Payments
Survey shows that consumers are increasingly relying on online and
mobile technology to make purchases, opening new opportunities for
merchants to reach more customers and grow revenue. Among U.S.
merchants that have both ecommerce and physical retail operations,
81% view online and mobile sales as the channel with the biggest
growth opportunity for their business, according to the survey. To
effectively capture that potential growth, the results show that
merchants should prioritize the security of their interactions with
customers online as much as the checkout experience, as many
consumers say they have abandoned making an online purchase over
security concerns.
The survey findings are based on responses from 1,020 U.S.
consumers1 and 401 U.S. merchants2 and reflect online shopping
habits on desktop computers and mobile devices. The results show
that merchants and consumers are increasingly conducting commerce
through digital channels. Nine-in-ten (90%) U.S. consumers say they
have made at least one online purchase in the past 12 months, and
more than seven-in-ten (73%) have made three or more online
purchases in the same time frame. Nearly half of online shoppers
(47%) say they have increased the frequency of their online
purchases in the last year. At the same time, 71% of merchants say
the proportion of their annual sales generated through online and
mobile channels has increased over the previous year.
As consumers shift more of their spending to digital channels,
they’re also showing a strong propensity for using digital payment
options. More than 70% of online shoppers say they have used
digital-payment services, including mobile wallets, one-click
checkout buttons and P2P payment apps. And four-in-ten (41%) say
they always or sometimes use such digital solutions when they pay.
Internet-connected, voice-activated devices, are also poised to
further shape consumer purchasing behavior: 18% of consumers
surveyed say they are very likely or somewhat likely to use
voice-activated services to make a purchase in the future. With
industry estimates predicting a surge in Internet-connected devices
in the coming years, the number of consumers who may ultimately use
such gadgets to make a purchase is likely to grow in the
future.
Security Concerns Put Purchases on Pause
While consumers are doing more of their shopping online, they
also place a high priority on payment security. Of consumers who
have made three or more online purchases in the last year, nearly
four-in-ten (37%) say they have abandoned an online purchase
because they did not feel their payment would be secure. At the
same time, 73% of merchants say their level of fraudulent online
sales has increased or remained the same over the past year. This
suggests that while consumers are increasingly shopping online,
merchants have an opportunity to capture a larger share of their
customers’ online spending by taking steps to reduce fraud and
enhance security in their digital channels.
“Digital innovation is enabling consumers to buy from merchants
when and where it’s most convenient for them,” says Mike Matan,
Vice President, Industry Engagement, Product and Marketing, Global
Network Business, American Express. “But the results of our survey
show that for merchants to capitalize on consumers’ continued shift
to online and mobile commerce, they need to provide their customers
with the confidence that their information is secure.”
Security Investments and Incentives Can Boost Sales
Growth
The survey found that investments in online security yield
tangible benefits. Among the 71% of merchants that have experienced
an increase in online and mobile sales over the last year, more
than half (58%) say that enhanced security features have had a very
significant impact on their sales. Other factors that have had a
very significant impact on their sales include an improved checkout
process (54%), the availability of free delivery (55%), marketing
offers and discounts exclusively for online customers (53%), and a
general consumer shift toward online shopping (54%).
The good news is many merchants are prioritizing security
investments. In the past year, merchants spent 31% of their IT
budgets on payment security, according to the survey. In addition,
more than half of merchants (54%) report that their budget for
payment security will increase over the next year.
But there are key steps that more merchants can take to boost
security in digital channels:
- A little more than half (53%) of
merchants take the simple step of requiring customers to enter the
CVV code found on credit cards for online purchases.
- An even smaller percentage of merchants
say they offer technology to confirm customers are not robots (42%)
or utilize data encryption for their online channels (40%).
- Just four-in-ten (39%) merchants
decline transactions when a verified billing address has not been
provided.
- Only 38% of merchants require customers
to set up an account before making a purchase online.
In addition to having peace of mind about the security of their
payment information, consumers are also drawn to digital channels
for other reasons. Nearly eight-in-ten (79%) consumers who say they
would be more likely to purchase an item in-store rather than
online say an offer for free delivery would cause them to
reconsider and purchase the item online instead. Similarly, 75% of
consumers say discounts available only for online purchases would
prompt them to purchase online instead of in-store, while 50% say
the ability to earn exclusive rewards for online purchases would
prompt them to do the same.
Consumers and Merchants Agree: Cash Is No Longer King
As online commerce grows and consumers continue adopting digital
payments, more merchants and consumers are also turning away from
cash. One-in-five (20%) consumers say they currently are not
carrying any cash in their wallet, and nearly half (46%) say they
rarely or never use cash for making purchases. This has not gone
unnoticed by merchants: among those that currently offer cash/check
payment options to their customers, two-thirds say they are very
(36%) or somewhat (31%) likely to go completely cashless.
Survey Methodology
The 2017 American Express Digital Payments Survey was conducted
among U.S. consumers and merchants that offer online/mobile payment
options to their customers.
The consumer portion of the study is based on an overall sample
of 1,020 respondents weighted to U.S. census based upon gender,
age, education, race and region. Unless otherwise noted, responses
among consumers represent those who have made an online purchase
three or more times in the past 12 months based on self-report. The
sample size of n=775 has a margin of error of +/- 3.5 at the 95%
confidence level. The anonymous survey was conducted online May
8-10, 2017.
The merchant portion of the survey was conducted online among a
sample of 401 business leaders in the U.S. who have responsibility
for making decisions regarding customer payment options, IT/data
security, or online sales strategy and planning. Respondent
companies must offer credit/debit card or digital payment options
to their customers through online/mobile channels. The sample for
the study came from an online panel. The business sample has a
margin of error of +/- 4.9 at the 95% confidence level. Fieldwork
was conducted May 16-23, 2017.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more at
americanexpress.com and connect with us on
facebook.com/americanexpress, instagram.com/americanexpress,
linkedin.com/company/american-express, twitter.com/americanexpress,
and youtube.com/americanexpress.
Key links to products, services and corporate responsibility
information: charge and credit cards, business credit cards, Plenti
rewards program, travel services, gift cards, prepaid cards,
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corporate responsibility.
____________________________________
1 Consumers refer to those who have shopped online three or more
times in the past year.2 Merchants refer to those businesses that
accept payments on a traditional website, mobile website or mobile
application.
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version on businesswire.com: http://www.businesswire.com/news/home/20170620005928/en/
Andrew JohnsonAmerican Express(212)
640-8610andrew.r.johnson@aexp.comorSamantha CoulombeM Booth(212)
539-3272samanthac@mbooth.com
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