Boston, Oct. 26, 2009 -– A new report from Aite Group, LLC assesses the true costs assumed by the card industry when U.S. cardholders experience difficulties making card payments abroad. The report is based on a September 2009 Aite Group online survey of 1,019 U.S. resident cardholders that traveled to countries outside of Canada, the Caribbean and Mexico between 2006 and 2009. It provides insight into the frequency of failed card payments abroad, the emotional response and lingering effect caused by failed card payments, and how the U.S. card industry can address this problem.
The promise of ubiquitous card payments acceptance falls apart once U.S. cardholders cross their national border. For cardholders traveling to one of the most popular destination for U.S. travelers - Western Europe - over the past three years, there is an almost 50% chance that they have experienced some form of problem using a U.S. payment card. Aite Group estimates that 9.7 million U.S. cardholders experienced issues with card payments abroad in 2008, and that the U.S. card industry missed out on US$3.9 billion in transactions and US$447 million in revenues as a result of these lost card payments. Interestingly, the responsibility for the majority of negative issues experienced by U.S. cardholders abroad lies squarely on the shoulders of U.S. card issuers, which cause 64% of the deterrents.
"Nearly two-thirds of cardholders adjust payment behavior after a bad experience, directly resulting in lower usage of the problem card," says Nick Holland, senior analyst with Aite Group and co-author of this report. "An issue caused by incompatible card technology is treated far more seriously by cardholders than issues stemming from card acceptance, fees or merchant policies. A quarter of cardholders experiencing these types of problems will agree either somewhat or totally that the problem ruined or almost ruined their trip."
This 54-page Impact Report contains 39 figures. Clients of Aite Group's Retail Banking service can download the report.
Related Aite Group Research:
Engaging Gen Y: Cultivating a New Generation of Banking Customers
Card Data Security: In Search of a Technology Solution
The Card Industry: Between a Rock and a Hard Place
The Mobile Transactions Landscape: Mapping New Territory
Aite Group Study on 2010 Capital Markets IT Spending Trends
Aite Group, LLC invites C-level technology and operations executives at securities firms to participate in an important survey and share their views on U.S. IT spending trends in the capital markets for 2010.* he survey should take approximately 15 minutes to complete. For your participation, you will be entered into a drawing for a Dell Inspiron 11z Netbook.
To participate, please click on the following link: http://aitegroup.2010ITPrioritiesSpend.sgizmo.com
*All responses will be reported anonymously and in aggregate. Individual responses will remain strictly confidential.
About Aite Group, LLC
Aite Group is a leading independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry. It was founded by leading industry experts in Banking and Securities & Investments. Aite Group brings together a team of business strategy, technology and regulatory experts to deliver comprehensive, timely and actionable advice to financial institutions and technology vendors. It seeks to become a true partner, advisor and catalyst by exchanging ideas with and challenging basic assumptions of its clients, ensuring that they always stay one step ahead of the competition.
Source: Company press release.
