Overview
Despite the sluggishness of the global economy in 2008 and 2009, the U.S. fostered a robust online transaction market. Domestic e-commerce climbed 10.8% from $185 billion in 2008 to $205 billion in 2009. At the same time, the share of total retail sales represented by online transactions continued to rise, reaching 5.5% in 2009. This report evaluates the actual and forecast changes in the online payment market and payment mix from 2008 to 2014 and identifies the drivers of market change. This report contains forecasts for online total payments volume and share and online credit card (network and private label), online debit card, online alternative payments, and online prepaid/gift card total payments volume and market share.The online debit* purchase volume was just under two thirds the level of major credit card online purchases in 2009 ($57 billion for debit card vs. $89 billion for credit card).
Editor's Note: "Online debit" purchase volume was much closer to $570,000 than it was to $57 billion. Debit transactions conducted online does not make them "online debit...they ALL are actually processed as "offline debit" transactions, Online Debit is PIN Debit. If you don't "swipe the card" and "enter the PIN",it is NOT an online debit transaction.
Primary Questions:
- What are the major trends for domestic e-commerce payment transactions?
- How will traditional online payments vehicles – credit and debit cards – fare as new payment options are introduced and economic factors influence consumer preferences?
- Will online alternative payment options overtake traditional options within the five-year forecast horizon?
- What factors influence consumer adoption and the use of various payment options for online purchasing?
- How has consumer receptivity to online purchasing changed over time, and how will it continue to evolve?
This report changes the methodology that Javelin has used previously in its online payments assessments and forecasts. The new methodology is designed to more accurately reflect full online commerce activity, including both travel purchases and auction transactions.
Using data collected online by Javelin in November 2009 from a random-sample panel of 3,294 consumers, the survey targeted respondents based on representative proportions of gender, age, and income compared to the overall U.S. online population. In 2009, the U.S. population was estimated to comprise 306 million people, including 232 million adults and 168 million online adults.1 Overall margin of sampling error is ±1.71% at the 95% confidence level.
Secondary data from public sources such as the U.S. Census Bureau, Bureau of Labor Statistics (BLS), Bureau of Economic Analysis (BEA), and Office of Management and Budget (OMB) was incorporated into the forecast. The forecast was derived using a combination of personal income forecasts from the OMB and BEA. The ratio of total retail to personal income was also drawn from these studies.
The total online retail payment volume was derived through survey results and a reweighting by payment type based on U.S. Census e-commerce data, U.S. online travel purchase estimates (based on BEA data), and publically available payments activity data from major service providers (e.g. Visa, MasterCard, Discover, American Express, eBay). The reweighting maintains survey integrity while anchoring the forecast to concrete market data developed by secondary sources. Prior years were also reweighted to maintain trendability.
1 www.census.gov accessed Oct. 25, 2009 and Javelin Annual Household Study, September 2009
