Ukash warns the industry that ignoring the cash consumer
online may cost the industry hundreds of millions of pounds this
season
Online retailers are missing out on sales worth in excess of
£600 million as they exclude the cash customer from Internet
shopping this Christmas, online payment solution Ukash warned
today.
The e-tail industry body IMRG announced last month the average
online spend in the run up to Christmas was expected to be
£215 per person in the UK. However, according to data from
the Citizens Advice Bureau, one in twelve households in the UK -
2.8 million people - do not have a bank account or card, which
denies them access to mainstream online shopping. By ignoring this
market, e-tailers are turning away a potential £602 million
on sales this Christmas.
Moreover, the £600m figure does not include the large
number of customers expected to turn their backs on online shopping
this Christmas, mainly amid fears of falling victim to fraud. UK
consumers lost £302 million to card fraud in the first half
of the year - a 14% increase compared with the same period in 2007
(APACS).
Mark Chirnside, CEO of Ukash, warns "The predicted 15% increase
in online sales this Christmas brings breathing space to the
industry at this difficult time but it is a far cry from the 54%
increase we saw last year. Retailers should urgently be looking at
ways of engaging further with their existing customers and
attracting new ones to boost their online sales. 72% of credit card
holders confess to never having used it to transact online -
looking at the payment options they offer online and identifying
any gaps should be part of any serious strategy to ensure retailers
maximise their sales this Christmas."
There is an array of alternatives to debit or credit cards in
the market today, from prepaid cards to electronic PIN vouchers.
Ukash issues prepaid e-PIN vouchers with unique 19-digit codes to
pay online, sold from 200,000 locations in Europe and, in the UK,
also via mobile. A customer survey carried out by the company
amongst more than 1,000 customers in November 2008 revealed 89% of
Ukash users have a bank account and nearly half also have a credit
card, confirming consumers with access to mainstream banking are
actively looking for ways to pay online other than with debit and
credit cards.
Payment solutions such as Ukash are easy and reliable ways to
pay over the net without the need for users to reveal sensitive
financial details, offering retailers a way to ease customers'
fears of online fraud and tap into the traditional cash market.
The alternative payments market is experiencing healthy growth,
with industry experts predicting 3.1 billion transactions in Europe
will be made with prepaid cards by 2010.