By Max Clarke
Chase Paymentech Europe Limited, a leading merchant acquirer and payment processor, announced today that Independent Research by Dynamic Markets, points to a less than smooth Christmas online sales for both UK consumers and merchants. The survey of 200 online merchants found that while Christmas 2010 is expected to be a record year, with consumers set to spend an estimated £11.5bn online (a 28.8 per cent increase on 2009), Card Not Present (CNP) downtime could spoil the holiday season for some.
Fifty-nine per cent of merchants surveyed admitted to suffering downtime to CNP payment systems during a typical month - amounting to 72.8 hours of downtime a year (or three whole days), during which customers were unable to complete online transactions. 46 per cent of non-finance directors stated they had no idea how much downtime occurs. A worrying fact for merchants, as traditionally the ten week holiday season accounts for almost a quarter of yearly online sales. In particular, this year more than ever given disproportion of high street footfall caused by adverse weather. Mega Monday (6th December) the busiest shopping day this year saw consumers spend £831,000 in just a minute online (up 20 per cent on last year).
"The balance is definitely moving away from the high street with many consumers choosing to avoid icy roads in favour of conducting shopping online. While there is a huge opportunity for merchants to grow revenues over the Christmas period, many are unprepared for the impact of the rush on backend systems. By the time a shopper reaches the payment stage of the buying process, they have already invested substantial time on a merchant's website. If the payment process fails not only will it impact the merchant's bottom line but the consumer may choose to shop elsewhere - never to return," said Shane Fitzpatrick, President and Managing Director, Chase Paymentech Europe Limited.
The survey also found that while downtime was common among UK merchants, it was an issue understandably many were keen to address. 61 per cent of MDs and CEOs stated that they thought it would be worthwhile changing their CNP provider if a new solution could reduce downtime. According to 79 per cent of finance directors, the reason for CNP downtime was due to a number of factors including: current payment systems being developed in a less than ideal way, which resulted in a fragmented approach to CNP payment processing. Multiple or outdated payment processing systems were also regarded as problem areas, as they could not offer the strategic value of newer, automated CNP systems.
"As online shopping continues to increase in popularity, it is crucial that merchants offer consumers a consistent reliable shopping experience. Any downtime and the online shopper will simply go elsewhere. Although VAT is set to rise to 20 per cent (from 17.5) in January - the High Street Sales Tracker (HSST) from research specialists BDO indicates that there is unlikely to be any fall in sales, as consumers hit the January sales. We believe that merchants require a global payment processing solution, which is exclusively tailored to e-commerce and CNP processing. Our merchant customers benefit from a consistent, reliable, robust CNP service - allowing them to focus 100 per cent on running their business in this critical time," concluded Fitzpatrick.