How Card-On-File Is Changing Online Consumer Shopping

When it comes to online shopping, one of the greatest frustrations for consumers — and friction points for merchants — is having to manually enter credit or debit card information for each purchase. It’s no wonder that 78.9 percent of consumers today have account information stored online with at least one or more companies or service providers.

In the latest Mobile Card Services Playbook, a collaboration with Ondot, PYMNTS surveyed more than 9,500 U.S. consumers to get a better understanding of this common, but scarcely examined, payment method. The research looked at where consumers use card-on-file (CoF), what they like about the service and what their concerns are when it comes to increasing their usage.

For many consumers, the use of CoF is an integral part of their shopping habits, the findings indicated. The majority have multiple cards on file online, and some are especially enthusiastic: Nearly 12 percent of respondents have eight or more CoF accounts.

The service isn’t just being used to pay the monthly Netflix bill, either. More than 50 percent of consumers use CoF to pay retailers for frequent, recurring household bills, while 46.9 percent use it for online subscriptions. The main appeal of the CoF service, though, is convenience, with 79.7 percent of consumers citing this as a benefit.

Despite the popularity of CoF, however, consumers have their share of reservations when it comes to security, in a time when major data breaches are frequent. More than half of respondents are concerned that their card information could be stolen, and 39.5 percent believe the service carries a risk of fraud.

At the same time, many consumers are confident that the technology offers ways to better protect their data. Thirty-seven percent said they would be much more likely to use CoF if companies were to use unique keys or tokens to charge their accounts, rather than have direct access to their card information.

To learn more about these and other insights into consumers’ complex relationships with CoF, download the Mobile Card Services Playbook.