Despite Reports of Online Theft, Online Credit Card Sales Continues to Climb
Written by CardRatings.com
Posted On: October 6, 2005
According to CardForum, CyberSource recently reported an increase in online credit card sales in spite of reports of consumer loss and identity theft that have been prevalent in the media lately. CyberSource provides credit card and debit card processing along with risk management for online merchants.
Bruce Frymire, director of corporate communications and investor relations at CyberSource, noted:
"The press was obsessed about the possibilities of the Internet in the late 90's, but the news today seems to be all about online fraud and identity theft. A few research groups have even predicted a slowing of eCommerce growth as a result of online crime. CyberSource research, on the other hand, shows a stable incidence of fraud in the last two years - significantly under 2% of annual online revenues. We are also seeing rapid growth in transactions. Our transactions in the first two quarters of 2005 surpassed those in the same two quarters in 2004 by 43%. That's not what I'd call a cooling off of online activity."
41% of Internet users said they were making fewer purchases online because of reports of online identity theft (CardLine 6/24) according to The Conference Board, an organization of major corporations. However, Doug Schwegman, market research director at CyberSource, stated that he does not find evidence of a decline in sales. Schwegman told CardLine:
"If anything the second quarter was better than the first quarter. We don't see people using the Internet less due to security and fraud concerns."
Because of high gas prices, Schwegman even suggests that in the future more consumers may make purchases online, thus further increasing online credit and debit card usage.
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