MasterCard International Inc. is introducing digital wallets in Australia next month to stem the escalating problem of “shopping cart abandonment”.
More than 30 per cent of online shoppers abandon purchases because of the protracted buying process and time lag that occurs when completing a transaction.
The digital wallet application will be available on the MasterCard Web site and will simplify the online purchasing process by storing buyer information and automatically fulfilling payments.
At a meeting of more than 25 member banks in Australia, MasterCard’s Product Delivery Group Senior Vice President Jeff Portelli said authentication was the hottest topic on the agenda.
Portelli said the company is developing a security payment application (SPA) system, which will be available in May and will verify payments within 10 seconds. He said the system will be an important step in the bank’s process of regulating merchants to ensure fraud is kept to a minimum.
“Banks categorize merchants to monitor transactions and we have six Internet categories. The biggest problem is adult sites as there are many that overcharge; each time a transaction is sent back for checking the charge-back costs range from US$25 to US$45,” Portelli said.
Online customers, he said, want their purchases to be relevant, convenient and secure.
“The digital wallet simply sits as an icon on the desktop; we found our customers wanted a virtual card program where their online purchases could be separated from real-world transactions,” he said.
MasterCard’s Senior Vice President for Australia John Verco said the company’s e-commerce strategy is an opportunity “to produce real volume”.
Verco said there is an “awful lot of smoke and mirrors” in the e-space but the company will focus on what it does best, facilitating and enabling payments. “We’re focusing on smart cards and mobile commerce; we want 100 percent of our customers Internet-enabled,” he said.
Brian Gillespie of Deloitte Touche Tomatsu, who specializes in online payments solutions, said Australia has been slow to realize that a bank account and credit card-inked micro payment capability is an essential component of online business.
“Unfortunately, most Australian portals seem to be struggling with their business models just as the major portals overseas are taking a quantum leap forward and gearing up for digital delivery. A quick mouse click and buyers can purchase from an overseas based e-tailer in sterling, euros or US dollars from their e-wallet,” Gillespie said.
He referred to Australian online payment systems provider Paypal, which recently closed after two fruitless years of activity locally but plenty of business in North America and Europe.
“By this time next year more than a million of us will probably have an e-wallet but at the moment it looks like very few of them will be provided by Australian companies,” Gillespie said.