A new payment system is set to be launched in Australia by British company Ukash that will allow consumers to buy products online without divulging credit or debit card details.
But a leading Australian retail consultant says he is uncertain whether the offer will have much appeal, claiming the fear of credit card fraud has largely been addressed by online retailers.
The Ukash model involves the sale of vouchers via cash transactions in retail stores such as petrol stations. The vouchers contain specific codes that can be used in online stores requiring no additional financial details from the purchaser.
Ukash has signed a deal with electronic payment system operator e-pay Australia to introduce the system. Along with the in-store voucher system, customers can also purchase codes online through accounts with major banks.
The company’s Mark Chirnside says its prime target is Australian online customers who are concerned about credit card fraud. The company points to Newspoll research that shows 39% of Australians have been victims of cyber-crime, and Reserve Bank of Australia data that shows 70% of all transactions are still made in cash.
“By opening up internet shopping to the cash market Ukash allows those without bank accounts or credit cards, or those who have fears of online fraud, to shop securely online using cash,” Chirnside said in a statement.
“We are excited by our move into the Australian market, which we believe will be another strategic success for our company and we are looking forward to working with retailers here to help them develop valuable new revenue streams.”
But Brian Walker, chief executive of retail consultancy group the Retail Doctor, says Ukash may be too late in banking on consumers’ fear of digital fraud.
“I think there will be demand for this, but whether it’s a substantial demand or not is the question. The topic over the first few years of online payments was about whether it was safe enough, but I think the relative security of making online payments has been addressed and I think there’s confidence in that area, so to some degree that mitigates the central thrust of the Ukash offer.”
“But that having been said, if they can offer some type of value with this, then it has merit. I’m not sure what the target market is, but if they can build a loyalty attribute and offer value in their product, then it may have greater appeal.”
Ukash operates its voucher system in South Africa, as well as European countries including France, Germany, Ireland, the Netherlands, Poland, Russia, Slovenia, South Africa, Spain and Sweden. It handles $173 million worth of transactions each year.