Internet Retailer - September 2011 - (Page 48) THE INTERNET RETAILER SURVEY: ONLINE PAYMENTS With debit card fees about to drop, some e-retailers adjust their payment strategies BY THAD RUETER T he ink is barely dry on the Federal Reserve Board’s June 29 ruling ordering a cut in debit fees, but already about one in six retailers are planning to steer online shoppers to use debit cards, according to the newest Internet Retailer survey. 17% of the 112 respondents to the survey on payment strategy said they planned to take such steps as offering discounts and more prominently displaying debit card options on e-commerce sites. e Internet Retailer survey generated 112 responses, 68.8% of them from web-only merchants, with the rest from chain retailers, catalogers and consumer brand manufacturers. 50% of respondents have annual web sales of less than $1 million, with 22.3% taking in between $1 million and $5 million per year; nearly 10% of respondents said their annual web sales exceed $50 million. Among the biggest payment questions online retailers will face in the coming months is the impact of the new debit card fees, and some respondents are plotting ways to move consumers away from using credit cards, which will now cost e-retailers more than accepting debit. Starting Oct. 1, the Fed will cap debit interchange at 21 cents per transaction plus 0.05% of the 48 Internet Retailer September 2011 Offering shoppers payment alternatives Do you accept other forms of payment other than credit and debit cards and PayPal? All Yes No 56.8% 43.2% Chain 57.1% 42.9% Catalog 50.0% 50.0% Web 55.8% 44.2% Manufacturer 75.0% 25.0% How payment fraud is trending Have your fraud rates increased or decreased over the past year? All Increased Decreased Stayed the same 24.3% 12.6% 63.1% Chain 21.4% 14.3% 64.3% Catalog 16.7% 8.3% 75.0% Web 27.3% 14.3% 58.4% Manufacturer 12.5% 0.0% 87.5% transaction amount; with online debit purchases averaging $78.70, according to Javelin Strategy & Research, that would make the debit interchange fee 25 cents on an average web purchase. Today, online retailers typically pay Visa and MasterCard debit interchange of 1.60% plus 15 cents a transaction, or $1.40 on a $78.70 purchase. e Fed made no distinction between online and face-to-face transactions in setting its debit card fees. ere’s much uncertainty about how this fee change will play out, and merchants should discuss with their payment processors how the decision might affect their businesses, advises Tom Pouliot, payments evangelist at Litle & Co., which specializes in handling payments for online and other retailers that don’t sell through physical stores. “Clearly there will be an impact on merchants,” he says, “but to know how much will be determined by their own transaction specifics, such as the percentage of debit cards versus credit cards used and the average ticket.” e survey results suggest that many online retailers are still unaware of the debit card changes, and others are reluctant to influence how consumers pay. 39.6% of www.internetretailer.com http://www.internetretailer.com Table of Contents for the Digital Edition of Internet Retailer - September 2011 Internet Retailer - September 2011 Contents News Line California scheming Many happy returns Stores link to the online world A timely gathering Survey: Online payments The right fit Find and fix Risk and reward Blind faith Internet Retailer - September 2011 http://www.nxtbook.com/nxtbooks/verticalweb/201306_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201305_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201304_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201303_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201302_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201301_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201212_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201211_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201210_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201209_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201207_InternetRetailer_preview http://www.nxtbook.com/nxtbooks/verticalweb/201208_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201207_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201206_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201205_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201204_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201203_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201202_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201201_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201112_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201110_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201109_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201108_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201107_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201106_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201105_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201104_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201103_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201102_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201101_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201012_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201011_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201010_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201009_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201008_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201007_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201006_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201005_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201004_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/2010march_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201002_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/201001_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/200912_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/200911_InternetRetailer http://www.nxtbook.com/nxtbooks/verticalweb/200910_InternetRetailer http://www.nxtbookMEDIA.com
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