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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.
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