At speeds close to the speed of sound, there is a large, sudden increase of drag, known as the sound barrier. When test pilots plummeted from the sky on first encountering this invisible and enigmatic obstacle, it shocked the world.
At a point in online retail close to the transaction, there is a large, sudden increase in consumers’ reluctance to input their credit card details, which the Interactive Media in Retail Group has named “the pay barrier”. Until the fourth channel, or electronic commerce industry, learns how to help consumers press through this obstacle, online pioneers will continue to crash and burn.
The pay barrier is not simply caused by ignorance – consumers have negligible financial exposure, despite press hype to the contrary – or by lack of opportunity, as a plethora of great European products and services can now be bought online with no problem. The pay barrier is mainly the effect of the normal human reaction when confronted by something radically new – a natural caution and reluctance to change behaviour kicks in.
This point was driven home in a recent conversation with a senior director of a highly successful media group. He explained his business is already selling over 1m of services a year to customers purchasing data on the Internet in real time. But when asked about his own online buying experiences, he told us he had never bought anything through the Net.
He was as interested as we were in examining why this was the case, and in a forthright discussion he described what he recognised as an illogical nervousness, which made him unwilling to enter his credit card details on the Internet, despite being aware the risk is negligible. This man is well-informed – he uses the Net daily, and is perfectly happy to find a product online, then to pick up the phone to complete a transaction. It’s just that the Internet is, well, a bit new!
He is not alone. Most people share this hesitance.
Of the many reasons not to buy online that the press has furnished the public with, “lack of credit card security” is the stock excuse. Considerable effort and resources, as well as advertising and media expertise, will be needed to overcome the pay barrier, so we welcome the fact that, inspired by US experience, the European ad and media industries are finally taking the fourth channel seriously.
And let’s not forget that public opinion can change over the adoption of new media. A US Gallup poll in 1939 showed that 87 per cent of Americans weren’t interested in having a TV. By 1953, 52 per cent had one.