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SHOPPERS FEAR MUGGINGS ON INTERNET HIGH STREET
Added: (Mon Nov 27 2000)
20 September 2000
SHOPPERS FEAR MUGGINGS ON INTERNET HIGH STREET
The spectre of net fraud continues to haunt cybershoppers, but new research challenges the myth that the only threat comes from online bandits hijacking credit card details and outs retailers as a major cause of consumer concern.
Half of all Internet users (46 per cent) fear disclosing payment details over the web because they believe that online retailers could ¡¥purposefully defraud¡¦ them, according to new analysis by digital services company Magex.
And nearly three-quarters (71 per cent) say they do not trust e-tailers to keep their personal credit information secure and out of reach of criminals.
The study offers further food for thought for the web-based retail industry, with nearly 40 per cent of customers agreeing that buying online poses a greater security risk than traditional high street shopping.
But the Magex report exposes consumer contradictions about security, with almost half of 18 to 35-year-olds admitting to being more willing to leave their credit cards behind a bar than make a purchase over the Internet.
Similarly, a third of respondents believe that disclosing credit card numbers via the Internet is more risky than doing so over the telephone, despite the possibility of being overheard, or than losing sight of their cards when paying in restaurants or bars.
Magex, which is backed by Natwest Bank, a part of the Royal Bank of Scotland Group, commissioned the study to highlight its pioneering ¡¥virtual wallet¡¦ secure payment system. The wallet is initially loaded via credit card and when a purchase is made, the agreed value is released to the retailer and deducted from the total in the wallet. The consumer¡¦s personal credit card details are only ever released to Magex and need be entered only once.
The new research confirms that although fewer than two in 10 consumers believe that buying online from a well-known retailer is satisfactorily secure, twice as many agree they would be happy to reveal their personal credit card details to an online bank.
Speaking about the results of the research, Peter Beverley, vice chairman of Magex, said: ¡§ The lack of a physical face for Internet retailers is undoubtedly holding them back. The public¡¦s perception of their honesty is alarmingly low and, if they¡¦re going to turn eyeballs into real revenue this has to be addressed.¡¨
Adds Beverley: ¡§Online banking has its critics but our research goes to show that Internet users and shoppers are happier revealing confidential credit details to a financial institution than any other web-based company. Even trusted and respected online retailers* and software companies* will struggle to inspire the same peace of mind.¡¨
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Notes to Editors:
About the research
The research was undertaken by NOP who questioned 1010 adults aged 15 and above between August 18th ¡V 20th 2000. The NOP sample was designed to be representative of adults in Great Britain.
*Figures for UK Internet penetration are taken from latest research by Internet statistics company NetValue.
*For the purposes of this research respondents were told a suitable example of a well known on-line retailer is Amazon.com and a suitable example of a well known software company is Microsoft.
About Magex
Magex¡¦s global digital commerce service is built on sophisticated digital rights management technology provided by InterTrust, the MetaTrust Utility. It delivers persistent protection of digital content and rights alongside a trusted payment process and financial clearinghouse. This allows consumers to pay safely and instantly for digital content purchased via an electronic wallet, a Magex software application resident on the user¡¦s PC. Backed by British banking giant, NatWest, part of the Royal Bank of Scotland Group, Magex enters the market with over 250 years of banking expertise behind them.
Magex raised US$80 million in its first round equity funding and is currently operating out of offices in London, San Francisco and New York. Major shareholders include Goldman Sachs, Capital Z Financial Services, NatWest (now owned by Royal Bank of Scotland), Universal Music Group, InterTrust Technologies Corporation, Sir Paul McCartney, and Reuters. For more information visit www.magex.com.