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Teens drive on-line shopping growth
Friday, September 07 2001
by Andrew McLindon


Teenagers spent over USD480 million on-line during 2000, according to a report
from the market analyst firm Datamonitor.







The study, which looked at teenage on-line spending across seven EU countries and
the US, found that teenagers spent USD483 million over the Internet in 2000. The
company also forecasts that this figure will increase to USD10.6 billion by 2005
as new payments options become available. The seven European countries studied
were France, Italy, Germany, Sweden, Holland, Spain and the UK.



 



"Our survey shows that teenagers are among the mostly likely groups to pay over
the Internet," said the report's co-author and Datamonitor's senior financial
services analyst, Julie Cunningham "However, their inability to obtain credit
cards and low on-line debit acceptance has historically made on-line payment
difficult."



 



Datamonitor said that in order to encourage teenagers to spend on-line, Web
merchants must integrate new payments solutions. "Although teenagers can make
purchases indirectly using a parent's credit card, the buying experience is not
the same due to the loss of independence for the teenager," commented
Cunningham.



 



According to Datamonitor, pre-paid cards and stored value cards are becoming
increasingly popular: with the former the money is stored in an account, whereas
the latter stores the money on the card.



 



"There is a need in the market for a teen payment product that allows secure
payments on-line," said Cunningham. "Teens are keen to have their independence
and to shop on-line. Both traditional players and new entrants have a part to
play in this market. New entrants can attract teens through the 'cool factor',
while traditional players should use their established role in society as a way
to convince parents and to gain their support. If traditional players ignore
teenagers they face losing future, profitable customers and they will face an
uphill struggle against new, 'cooler' brands." 







A spokesman for the Irish electronic payments company Orbiscom, which is a
pioneer in the controlled payment numbers field, said that it could be possible
to develop a product aimed at this market. Such a product could give parents
control over the on-line spending habits of their children, while giving the
children a certain amount of freedom as they would no longer have to use their
parents' cards.



 

"Using our controlled payment platform, we could develop a product in a
relatively short space of time that would allow parents to give their children
their own credit cards, but limit the amount they could spend on-line and on what
sites they spent it," an Orbiscom spokesman told ElectricNews.Net. 



 



"Parents could also view in real-time how much their children are spending,
where they are spending it and what they are purchasing. In addition, e-mail
alerts could be sent every time one of their children spends IEP20 on-line, for
instance," the spokesperson added. 



 



Orbiscom has a working relationship with AIB, but the spokesperson declined to
say whether the bank had approached Orbiscom about such a product. A spokesperson
for AIB's credit card division said the company could not discuss its plans in
this area.



 



A spokesperson for Bank of Ireland told ElectricNews.Net that it was looking at
introducing a credit card product for under-18s. But the bank wants to see how
its new credit card for students, which has a low credit limit, fares first.