AmEx: Digital security concerns influence purchase behavior

Merchants may be losing out on potential e-commerce sales due to shoppers’ concerns over the security of their information in the digital world.



Of consumers who have made three or more online purchases in the last year, 37% abandoned a purchase because they did not feel their payment would be secure, according to “The 2017 American Express Digital Payments Survey.” The report, based on responses from 1,020 U.S. consumers and 401 U.S. merchants, revealed that the level of fraudulent online sales has increased or remained the same over the past year for 73% of merchants.



In the past year, retailers spent 31% of their IT budgets on payment security. More than half (54%) reported that their budget for payment security will increase over the next year.



Retailers are also taking additional steps to boost digital security. More than half (53%) of merchants require customers to enter the CVV code found on credit cards for online purchases. Meanwhile, 42% of retailers feature technology to confirm customers are not robots, or utilize data encryption (40%). Four-in-10 (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.



“Digital innovation is enabling consumers to buy from merchants when and where it’s most convenient for them,” says Mike Matan, VP, 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.”



Despite their concerns, however, shoppers are continuing to use digital channels. Nine-in-10 (90%) consumers said they have made at least one online purchase in the past 12 months, and 73% have made three or more online purchases in the same time frame.



Nearly half of online shoppers (47%) said they have increased the frequency of their online purchases in the last year. And 71% of merchants said the proportion of their annual sales generated through online and mobile channels has increased over the previous year.



Shoppers are also using more digital payment options. More than 70% of online shoppers have used digital-payment services, including mobile wallets, one-click checkout buttons and P2P payment apps. Four-in-10 (41%) said they always or sometimes use such digital solutions when they pay.



Internet-connected devices are also poised to further shape consumer purchasing behavior, as 18% of consumers said they are very likely or somewhat likely to use voice-activated services to make a purchase in the future, the study reported.



In other survey findings:



• Among the 71% of merchants that have experienced an increase in online and mobile sales over the last year, more than half (58%) said that enhanced security features have had a very significant impact on their sales.



• Other factors significantly impacting 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%), data revealed.