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24th June 2009

PayPal Survey Reveals Why Canadians Abandon Online Purchases

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PaypalToronto – A PayPal survey released today revealed that over half (56 percent) of online shoppers have abandoned their online shopping due to higher than expected shipping charges. The average cost of abandoned goods in Canadian shopping carts is C$156.

The need to be more up-front about the entire online shopping process is of critical importance since almost all the shoppers had the intention of buying the product if their needs had been met. Only three per cent of Canadians (it was the same for Americans) said they had no intention of purchasing the item online after filling up the cart and proceeding to the checkout.

“Transparency is increasingly important to buyers,” said Darrell MacMullin, country manager for PayPal Canada. “One of the main reasons people click on the checkout button is to get information that is not provided by the online merchant such as shipping costs and other important fees such as cross-border duties and handling fees. To reduce cart abandonment, merchants should provide this information sooner in the checkout process.”

To help merchants encourage shoppers to purchase, PayPal today announced a new Express Checkout feature – the PayPal Instant Update API. By integrating the new API, merchants can show order details earlier in the process including shipping options, insurance choices and tax totals.

Canadians Anxious about Security Online

The survey also found that despite the growth in e-commerce, Canadians still feel some anxiety when they click the BUY button when shopping online. Fifty-one per cent of those surveyed said they typically feel a little anxious when they make an online purchase. Part of this trepidation comes from the fact 40 per cent of those surveyed were not overly confident that the merchant
they were buying from could keep their financial information secure. Though online purchasing anxiety is slightly lower in the US – 45 per cent – only 27 per cent of Americans surveyed had the same concern.

“Anxiety about paying online is not something new,” MacMullin continued. “Many people still feel anxious about putting credit card and bank account information online. One of the reasons we’re seeing tremendous growth of PayPal use in Canada is that credit card and bank account information is never shared with the online merchant.”

Though Canadians are not serial cart abandoners – 75 per cent of those surveyed said they do it less than once a month (compared to 62 per cent in the US) – there is a small percentage that is prone to abandoning their carts frequently. Four percent admitted to doing it on average more than five times a month.

Smaller and often lesser known merchants also face some specific hurdles. Sixty-six per cent of those surveyed said they were reluctant to buy from stores they’d never heard of because they didn’t want to share financial information. The number is not much different in the US – 62 per cent.

The survey also found that:

-78% of Canadians surveyed who abandoned a cart knew the site or had bought from it before.
– 52% said an ideal payment process would involve just one click, no matter where they were shopping.
– 43% said it takes too long to fill out credit card information.
– 40% of those who abandoned their shopping carts said the payment option they wanted to use was not available.
– 25% did eventually make the purchase online at the same retailer.

The online survey looks at why people abandon virtual shopping carts after choosing items to purchase and proceeding to the checkout. The survey of 553 people in the US and 94 in Canada was conducted by comScore between May 12 and May 15 and May 12 and June 2, 2009, respectively. The US survey is accurate with in +/- 4.2 per cent 19 times in 20. The Canadian survey is accurate with in +/- 10.1 per cent 19 times in 20.

This entry was posted on Wednesday, June 24th, 2009 at 10:16 am and is filed under Business News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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