Kiwis embrace online shopping

If New Zealanders were initially slow to shop online in the early days of the internet, they certainly caught up last year.

Credit card giant Visa said the number of online transactions made by its card holders jumped 95 per cent in 2004.

Online shoppers racked up $400 million in sales on their Visa cards, with anecdotal evidence showing the trend is mirrored by other credit-card vendors.

And much of the spending is local, with cross-border transactions accounting for 16 per cent of all Visa's e-commerce transactions, up slightly from 15.2 per cent in 2003.

With everyone from Air New Zealand to Woolworths now accepting credit cards through their websites, online payments are becoming an attractive option to pay bills for everyday items.

Online transactions average a hefty $141 each. Groceries, electronics and larger consumer goods are popular online purchases.

Visa's general manager for Australia and New Zealand, Bruce Mansfield, said online authentication of credit card transactions had eliminated "virtually all" fraud-related charge-backs.

"A secure foundation coupled with increased demand for specialised products not offered in local markets continues to drive cross-border transaction volume," he said.

And businesses as well as consumers are increasing their e-commerce activity.

Richard Shearer, the general manager of WebFarm, which enables companies to sell goods internationally in any currency, said some businesses using the service increased sales by 200 per cent in the run-up to Christmas compared with 2003.

"These trends indicate that businesses who implement e-commerce as a cost-effective sales channel are growing their business and facilitating export sales," he said.

Online travel purchases such as for airline tickets and accommodation had made online shopping a realistic everyday alternative, said Shearer.

However, the dramatic increase in online business is customer-led rather than business-driven.

"It's customers that are leading now," said Shearer. "The tools to do online business haven't really changed a lot in six years. They've possibly become more secure."

Internet scams and malicious programs that silently transmit users' keystrokes continued into 2005 almost as soon as the calendar turned, with two critical announcements from Microsoft.

But they do not appear to have dented online confidence.

The divisional manager for Progressive Enterprises' online business, Andrew Dixon, said December sales were ahead of the previous year in what he described as "still very much an emerging channel for grocery ... But as people's internet savvy increases and people become more and more comfortable making purchases online then we expect that growth to continue."

A similar picture emerged at Westpac, where customers registered for online banking jumped 22 per cent to 405,664 in the year to last September. Online banking transactions increased by 27 per cent to 1.21 million for the same period.

A bank spokesman said system safeguards such as preventing direct overseas transactions from New Zealand bank accounts were in place, a degree of protection not enjoyed in Australia and Asia.

"All you can say to [customers] is keep your firewall up to date and never disclose your password to anybody."

That advice is echoed by Shearer.

"Customers need to be educated as to what is a secure site and what isn't. So they should always be looking for the padlock icon to show up in the browser display and look for the site-security privacy policy."

Visa's global e-commerce sales volume originating from more than 90 countries was estimated to exceed $210 billion last year, 57 per cent higher than in 2003.

THE ONLINE SPEND-UP

* Visa's e-commerce transactions doubled in value to $400 million last year.

* Consumer spending rather than business buying is driving the growth.

* Lingering online fraud and security issues have failed to dent consumer confidence.