Online Retail Payments Forecast Market Factors Square Credit Cards Against Alternatives—Both Bank and Non-Network : Market Research Report

Online Retail Payments Forecast Market Factors Square Credit Cards Against Alternatives—Both Bank and Non-Network

Published by: Javelin Strategy & Research

Published: Nov. 1, 2008 - 42 Pages

Overview
Primary Questions
Findings and Analysis
Methodology
Executive Summary: Decreased Reliance on Credit Cards Opens the Door for Debit and Alternatives; Channel Shift Is Key Driver to Growth in Online Retail Transaction Volume; Mainstream Alternatives Pose the Greatest Threat to Financial Institutions
Online Payments Market Forecast for 2008-2013: Online Retail Transaction Volume Forecast; Alternatives Versus Traditional Online Payments Percentages Forecast; Alternatives Eat Into Credit Card More Prevalently Than Debit Card
Traditional Online Payments Forecast 2008-2013: Credit Card Usage Slows: Issuers Must Provide Further Value to Spur Online Usage; Traditional Transaction Volume Maintained Through Debit Card Growth
The Contenders: Alternative Online Forecasts: Credit Card Issuers Can Supplement Slowing Credit Card Volume With Prepaid; E-mail Payment Accounts, Dominated by PayPal, Threaten Traditionals; Store-Branded/Private-Label Credit Cards Projected to Grow at a Rapid Pace; BillMeLater Stands to Gain With PayPal Ownership
"True Alternatives” Show Varying Degrees of Success: Payment Mechanisms That Don’t Alter Consumer Behavior Will Win Out; Google Checkout Is Touted as an Alternative Process, not a Method of Payment; Revenue Streams That Leverage ACH and Familiar Consumer Processes; Online PIN Debit: Acculynk as the Phoenix Rising from the Ashes of ATM Direct; eCheck as a “White Label” Method Remains in Play but Will Not See High Online Growth; The Amazon-eBay Competition as a Further Driver of Alternatives; Revolution Money: Chicken-and-Egg Redux; Trial Pay as a True Alternative—Process and Payment
Appendix: Generational Consumer Data and the Propensity to Adopt Alternatives
Related Research
Companies Mentioned
Table of Figures: Figure 1: Consumers’ Changes in Financial Behaviors as a Result of the Economy; Figure 2: Online Payment Summary Table for 2008-2013; Figure 3: Online Dollar and Percentage Retail Transaction Volume Forecast Through 2013; Figure 4: Alternatives versus Traditional Online Payments Percentages 2007-2013; Figure 5: Comparison of Online Retail Transactions Volume for All Categories 2007-2013; Figure 6: Credit Card Online Dollar Transaction and Purchase Volume 2007-2013; Figure 7: Debit Card Online Dollar Transaction and Purchase Volume 2007-2013; Figure 8: Prepaid Card Online Dollar Transaction and Purchase Volume 2007-2013; Figure 9: E-mail Payments Online Dollar Transaction and Purchase Volume 2007-2013; Figure 10: Private Label Online Dollar Transaction and Purchase Volume 2007-2013; Figure 11: BillMeLater Online Dollar Transaction and Purchase Volume 2007-2013; Figure 12: Online Shoppers Usage of Alternative Payments; Figure 13: Google Checkout Screenshot; Figure 14: Places to Shop with Google Checkout; Figure 15: Screenshot of Revolution Money; Figure 16: Consumer Usage of Alternative and Traditional Online Payments by Generation; Figure 17: Monthly Usage of Alternative and Traditional Online Payments by Generation; Figure 18: Average Spending on Alternative and Traditional Online Purchase by Generation

Abstract

Overview
The online retail channel, despite still representing a relatively small percentage of overall retail sales, is a high profile channel in which many payments alternatives attempt to establish themselves and usurp transaction volume from financial institution-controlled credit and debit cards. Several once-alternative payment methods are now becoming mainstream, even though credit and debit cards still own the online channel; what will the final outcome be? This report defines competitive threats to credit and debit cards; and identifies the emerging “alternatives” that have the greatest chance to succeed and thrive, based on Javelin’s research-based forecast for online retail transactions through 2013.The report also addresses key success factors driving traditional and alternative payments methods, and how organizations can maximize transaction volume and margins.

Primary Questions

What is the dollar volume and projected growth for various online payment mechanisms through 2013?
What are the economic and consumer behavior factors affecting usage patterns for various payment mechanisms?
What constitutes the next wave of online payment alternatives, which will survive and why?

Methodology
Javelin created an online payments forecast model based on primary and secondary sources of consumer and census data. The primary consumer data in this report is based on data collected online from a random sample of respondents in April and September 2008. The April survey targeted 1,500 consumers with an overall margin of sampling error of 2.53 percentage points. The September household survey targeted 2,339 respondents with overall margin of sampling error is �2.03 percentage points. Each survey is at the 95% confidence level and based on representative proportions of gender, age and income compared to the overall U.S. online population.

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Online Retail Payments Forecast Market Factors Square Credit Cards Against Alternatives—Both Bank and Non-Network

Table of Contents

Abstract