Fear of Fraud and Loss of Privacy Crimp On-Line Sales, Study Finds

Buying and selling over the Internet are growing modestly, but obstacles to widespread electronic commerce have yet to be overcome, Global Concepts Inc. concluded from its latest survey of Internet users.

The survey, which the Atlanta consulting firm conducted on the Net, found 36% of respondents had made at least one on-line purchase, up from 32% in a 1995 Global Concepts survey.

Alan H. Lipis, chief executive, said 78% of the 500 people responding listed credit card fraud and a lack of data privacy as reasons for not making on-line purchases.

"People are not so much worried about being ripped off" as about someone finding out "who they are and what they are buying," Mr. Lipis said.

They fear exposure of personal information may lead to telemarketing calls, electronic and paper junk mail, and other unwelcome contacts, he said.

Of the people who made on-line purchases, 51% reported buying software; 32%, publications; and 23%, computer hardware.

The study also found that 35% of shoppers preferred credit cards over other payment methods, while 13% liked debit cards. Another 23% wanted to pay C.O.D. and 16% by check. Only 10% preferred to pay with digital cash.

Digital cash has a "long way to go to establish itself against existing, well-entrenched payment mechanisms," Mr. Lipis said at the Bank Administration Institute's national payments symposium.

The MasterCard-Visa Secure Electronic Transactions standard, designed for Internet credit card payments, "will solidify the credit card and certainly make it a powerful mechanism," he added.

Mr. Lipis and others were encouraged by the growth of on-line shopping, claiming it is becoming "more mainstream."

Raymond F. Hodgdon, executive vice president of BAI, noted that both checks and credit cards have benefited from "favorable pricing to consumers." The Internet also offers the advantage of low-price access, which he said should help stimulate commercial activity.

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