Abstract
Overview
Alternative payments will allow online merchants to drive mainstream sales among emerging online population segments, reaching new consumers and enhancing conversion through alternatives to credit and debit cards. Javelin provides a new forecast model to predict overall US online shopping volume and the breakdown among various payment types, both mainstream and alternative. Additionally, Javelin analyzes the unfolding benefits and competitive implications of alternative payments, revealing the consumer attitudes and behaviors that will lead to growth among both alternative and mainstream payment types.
Primary Questions
- What is the outlook for US online transaction volume through 2012?
- Which payment types- among mainstream and alternative methods- will realize the fastest growth, and what are the profit implications to merchants and payments firms?
- What impact is Google Checkout having on alternative and mainstream payments?
- How do various demographic groups select online payment types?
- Which consumer attitudes most significantly affect online payment choice?
Audience: Online Merchants, Alternative Payments Providers, Merchant Service Providers, Card Networks, Card Issuers, Financial Institutions
Length: 23 pages
15 charts/graphs
Companies/Organizations Mentioned in Report
- American Express
- Bill Me Later, Inc.
- Discover Financial Services, Inc.
- eBay Inc.
- Google Inc.
- MasterCard Incorporated
- PayPal, Inc.
- Visa Inc.
Table of Contents
- Overview
- Primary Questions
- Findings and Analysis
- Executive Summary: Alternative- (and Mainstream) Payments Defined
- What this Forecast Includes
- Consumer Online Purchase Volume Jumps to Over $355 Billion by 2012
- Despite Double-Digit CAGR of Online Purchase Volume, Merchants Continue to Seek Alternatives that Drive Lifetime Customer Value
- Alternative Payments Percentage of Online Retail Volume to Double by 2012
- Shift to Increased Usage of Alternatives Is Driven by Existing Online Shoppers
- Alternative Payments Volume Will Emerge at the Expense of Credit Card
Growth
- Debit Volume Remains Relatively Steady
- Traditional Payments Continue to Grow; Maintain Largest Dollar Volume
- Specific Payment Types and their 2012 Volume Numbers
- Email Payment Accounts: PayPal as the “Least Alternative of the
Alternatives”
- Transaction Volume Growth Spurred by Increase in Average Transaction Value
- “On-the-Spot” Credit Services: Bill Me Later Could Be a Victim
of its Success
- Transaction Volume Growth Linked to Security- and Convenience-focused Consumers
- Open-Loop Stored Value Products Provide an Opportunity for Card Networks
- Online Private Label Issuance and Merchant Loyalty Programs Drive Volume
- A Note on Google Checkout- Alternative Payment Method? Traditional? Hybrid? Benefits for Merchants in Acceptance?
- Credit is Still the Online Payment Method of Choice among All Age Groups
- Male Consumers Show Higher Propensity than Women for Alternatives
- Across Generations Men Show More Recent Usage of PayPal and Prepaid Cards
- Credit Card Users Hold Income Advantage Over PayPal and Bill Me Later Users
- Convenience and Security are Primary Motivators for Alternative Payments
- On-the-Spot Credit Usage Could Expand Greatly as Merchant Acceptance Grows
- Reasons that Drive Additional Online Purchasing
Table of Charts
- Figure 1: US Online Dollar Transaction Volume (In Billions) 2007 to 2012
- Figure 2: Traditional and Alternative Online Volume and Percentages of US Total Online 2007-2012
- Figure 3: Online Payments by Type Percentages of US Total Online Volume 2007-2012
- Figure 4: Table of Online Payment by Type: Growth, Volume, Percentage, and CAGR
- Figure 5: Online Credit Card Volume and Percentage of US Total Online 2007- 2012
- Figure 6: Online Debit Card Volume and Percentage of US Total Online 2002- 2012
- Figure 7: Email Payment Accounts Online Volume and Percentage of US Online 2007- 2012
- Figure 8: On-the-Spot Credit Online Volume and Percentage of US Total Online 2007- 2012
- Figure 9: Stored Value Online Volume and Percentage of US Total Online Volume 2007- 2012
- Figure 10: Private Label Online Volume and Percentage of US Total Online Volume 2007- 2012
- Figure 11: Payment Method Usage in the Last 30 Days among Different Generations
- Figure 12: Usage of Online Payment Methods for Gen X, Gen Y and Baby Boomers by Gender
- Figure 13: Usage of Different Payment Types by Annual Household Income
- Figure 14: Reason for Choosing Payment Method for Most Recent Online Transaction
- Figure 15: Reasons Consumers More Likely to Increase their Online Purchasing
