PayPal has overtaken credit cards as a preferred form of payment for consumers shopping on the web, according to a survey of global shopping habits conducted by KPMG.
The report – which surveyed almost 10,000 adults from 31 countries – finds that consumers around the world are adopting new technologies at a rapid pace, a fact that is changing lifestyles and the commercial landscape around the globe.
Across most categories of goods, the majority of respondents reported a preference to purchase items online rather than at a physical outlet. In the UK 74% of consumers said they were more likely to buy flights and vacations online (globally 70%), 77% prefer to buy CDs, DVDs, books and video games online (65% globally).
One of the chief beneficiaries of this shift in consumer spending patterns is PayPal. The report finds that non-bank online payment providers have been making headway in many markets, with PayPal outstripping credit cards as a preferred form of payment for consumers in Europe and the Middle East.
The survey also reveals the extent to which smartphones and tablets are changing shopping behaviour. When shopping at retail outlets, 45% of UK respondents said they now use their mobile devices to locate the nearest store, 32% to research products and services, 30% for online coupons and one in 5 (19%) scan in barcodes for product information. Globally 41% research products and services and almost a quarter pay with their mobile devices.
Indeed, research by IMRG, the British trade body for online retailers, found 24% of consumers have used their smartphone to access websites while out shopping and that Christmas will be a breakthrough for the trend. It found sales through mobile phones leapt from 0.4% of total sales at the beginning of 2010 to 3.3% in Q2 2011, as retailers roll-out specialist shopping apps.
One of the most surprising trends found by KPMG is that consumers are increasingly willing to allow their online usage pattern and personal profile information to be tracked by advertisers, if it results in lower cost or free content. Almost half of respondents in the UK (49%) said they are ready for such a ‘trade off’, globally even 62% said they were willing to be tracked by advertisers.
Despite this, privacy and security remain key concerns. When it comes to mobile banking, consumers in the UK are more reluctant than those in other parts of the world. Only 27% said they had used some form of mobile banking in the past six months (globally 52%, an increase from around 40% in 2010 and just under 20% in 2008).
The majority of respondents in the UK said they were concerned, either over the potential for credit card information to be intercepted by an unauthorised party (66%) or the threat of intruders accessing personally identifiable information (62%).
This makes interesting reading, no doubt, but as one keen blogger points out: ‘The statement ‘….. PayPal outstripping credit cards as a preferred form of payment for consumers in Europe and the Middle East.’ is not that significant as most people in Europe don’t use credit cards anyway. Using the ECB statistics for 2010 only about 7% of the card spend in Europe is on ‘cards with a credit function’ and it is less in the Euro area. What would more interesting is where PayPal comes in the ranking compared to debit cards.’