New CyberSource survey data: adding more payment types can increase online conversion by 20%
MOUNTAIN VIEW, Calif., June 14, 2004
A new study of eCommerce payment practices released by CyberSource Corporation (NASDAQ: CYBS) shows even the top North American merchants may have untapped potential in their eCommerce practices. According to the data, merchants can convert as many as 20% more customers by offering them more payment types to choose from. Those merchants offering one payment type, such as general purpose credit cards, for example, convert 60% of their shoppers. Those offering four types, e.g., credit cards, gift certificates, eChecks, PayPal, etc., convert 72% of their shoppers--a 20% increase. ("Shoppers" are defined as online customers who have started the checkout process). Currently, 18% of North American online merchants offer one payment type, another 35% offer two. Only 20% offer four or more.
"Adding payment types can be effective because the Internet is now reaching well beyond the early adopter," said Doug Schwegman, CyberSource director of customer and market intelligence. "We're hitting different demographics now; people who may prefer not to use credit cards and people who don't have them. Others simply prefer the convenience of an alternative payment method for a single transaction. Some amount of shopping cart abandonment is to be expected in online commerce, but there are certainly ways of keeping that to a minimum. One of those is making a variety of payment options available."
Merchants taking action
Merchants clearly grasp the changing payment situation. According to the survey, 38% say they plan to investigate or offer a new payment method in the next 12 months. Methods they plan to implement first are: electronic checks (31%), PayPal or other non-card payments (26%), private label cards (19%), gift certificates (14%), instant credit (13%), and recurring billing (7%).
About the survey
The survey, undertaken by CyberSource Corporation and conducted by Quality Research Associates, was derived from 147 telephone interviews with some of North America's top eCommerce websites. In order to qualify for the survey, companies needed a minimum of $10 million in annual online revenues. Respondent companies' online revenues account for an estimated 10% of 2003 business-to-consumer eCommerce in the United States.
To obtain a copy of the survey results --
The survey results are incorporated in a new industry whitepaper, "The Insider's Guide to eCommerce Payment". To obtain this, please visit: http://www.cybersource.com/insidersguide.
Interested journalists -- please contact Bruce Frymire at (650) 965-6042 or bfrymire@cybersource.com CyberSource solutions
CyberSource is a single source for a full range of eCommerce payment methods. These include:
Standard consumer credit cards options such as Visa, MasterCard, American Express, and Discover.
Electronic checks. A single integration with CyberSource provides access to an industry-leading four eCheck options: AmeriNet, CheckFree, Paymentech, and TeleCheck.
PayPal. CyberSource is currently the only payment processor to have integrated PayPal into its options for merchants.
Instant credit. Bill Me Later service allows merchants' customers to pay on line using an instant line of credit.
Gift and prepaid certificates -- stored value services to support private-labeled, online gift certificates and prepaid certificate issuance and redemption.
Recurring billing. CyberSource Recurring Billing Service supports subscription and installment payments. TotalCollect payment technology helps capture and protect up to 10% more subscriptions annually.
Global payment options, including multi-currency service, country specific cards such as Carte Bleue, Dankort, Carta Si, etc., bank transfers, and direct debit.
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"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995
Statements in this release that are not purely historical are forward- looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the Company's expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. Forward-looking statements in this release include, without limitation, statements regarding: (1) new payment types accelerating revenue; (2) converting more customers by offering more payment options; and, (3) keeping shopping cart abandonment to a minimum. Factors that could cause actual results to differ materially from the forward looking statements include risks and uncertainties such as changes in customer needs, new products and services offerings by the Company and its competitors, any unforeseen event or any unforeseen system failures, and other risks indicated in our filings with the Securities and Exchange Commission. It is important to note that actual outcomes could differ materially from those in such forward-looking statements. Readers should also refer to the documents filed by CyberSource with the Securities and Exchange Commission, specifically the annual report filed on Form 10-K for the year ended December 31, 2003, filed with the Securities and Exchange Commission on March 11, 2004, and our quarterly reports filed on Form 10-Q from time to time, all of which identify important risk factors.
