Having read many stories about cybercrimes and unsafe online transactions, you could be among those who have yet to make online purchases.
Yet, according to a MasterCard Worldwide survey among 8,000 respondents across 14 markets, 78 percent find it convenient shopping online in 2009 compared to 50 percent in 2008. And in their March 2010 report on the Internet economy, the Technology & Innovation Foundation said that if e-commerce continues to grow half as fast as it grows between 2005 and 2010, global e-commerce by 2020 will add $ 3.8 trillion annually to the global economy.
Setting global statistics aside, private information like bank accounts and personal identification are what many consumers continue to guard tightly and when they share these on the web to buy goods, it is usually on trusted brands like eBay and Amazon.
Online shopping is still seen as risky, especially among the generations accustomed to face-to-face transactions, paying in cash and checks. Cash is still okay but the use of plastic, like credit and debit cards continue to soar worldwide.
With the growing popularity of online transactions especially among the 20-and-30 somethings, and with the reported interim phaseout of checks (in the UK) by October 2018, e-commerce companies are devising safer and faster payment methods to keep consumer loyalty and to attract more shoppers.
Take for instance the seven-day escrow financial model being used by an online mall in the Philippines, Hong Kong and Malaysia. And pretty soon in the US.
This payment mechanism is the first in the Philippines' online retail environment that gives equal benefits and fair treatment to both customers and merchants. It is also a guarantee of top-level security to all parties concerned because the escrow agent – which in this particular case is also the administrator of the online mall – will only release payments to the web shop owners within seven days of the time the correct and defect-free goods have been received by the shoppers. In short, merchants receive the payouts on the eighth day.
It works to the advantage of online retailers because the 7-day escrow is an improvement over the regular 14-30 day payback period offered by other payment gateway providers. Long-time and new web store merchants no longer have to wait one month before getting paid for products they've already dispatched.
Shoppers, on the other hand, are assured that they get the correct and defect-free merchandise or their money back because of the policy on reporting. They get a full refund as long as they contact the escrow agent within 24 hours upon receiving the wrong or defective item (s).
In cases when consumers reject the goods and demand a replacement, they can reclaim the cost they spend on shipping charges when they first ordered online, but only after investigations over bungled deliveries have taken place.
The online mall administrator conducts investigations and arrangements with the merchant to ship the right product. Based on findings of the investigations and if it is proved that the buyer was not at fault, delivery costs will be borne by the merchant or the logistics company.
This one is addressed to the consumer. If you are in that stage where you're thinking you should try it (I mean, buy online) just to understand why 1.5 billion net shoppers in developed economies and the developing world do it, well, go with your instinct.
Remember, consumers like you and I will trust merchants who can deliver convenience, trust and security 24/7, and make our 'life online' worthwhile.