Online Content Providers Must Pioneer New Payment Methods, Says Report

Sales of online content virtually doubled in the US last year and the sector as a whole was worth $1.3 billion (see Online Content Sales Surge In 2002). However, there are currently few alternatives to the credit card when it comes to payment and this would appear to be hampering sales.

A survey conducted by PaymentOne, the prominent payment services provider, in association with Javelin Strategy & Research and eContent Magazine, found that 53% of US consumers would be more inclined to buy if more secure payment options were in place.

What is most noticeable is that value for money is not the main issue as just 19% said that greater quality would persuade them to buy online content while only 18% put affordability at the top of the priority list.

“Online content and service providers clearly need to do more to satisfy the concerns of consumers about online payment if they hope to continue to grow their revenues and customer bases,” said Joe Lynam, president and CEO of PaymentOne. “The implementation of new consumer-friendly payment options may well be the single most important step providers can take to better monetise their products and services.”

Security fears With the survey showing that 61% of consumers would be more likely to make online content purchases if there were a simple and secure alternative to the credit card, the onus lies with the industry to fulfil this need.

“The message is clear. Online content will not be king until consumers believe payments are secure,” said James Van Dyke, principal and founder of Javelin Strategy & Research. “Content and service providers will have to do more to convince users about the security of their payment options.”

The study also found that over half of consumers would be interested in buying online classifieds featuring merchandise or job opportunities for instance. A further 12% would pay for news and information while 11% would like to buy music online.

Jupiter Research estimates that the US online content revenues will increase by 30% this year and that the market will be worth $5.4 billion by 2007 (see Online Content Revenues To Surge But Advertising Holds Sway).