March 27, 2006, 12:00 AM

Debit will surpass credit for online purchases by 2007, new report says

By 2007, consumers will use debit cards more often than credit cards for online purchases, mirroring a shift that already has taken place offline, according to a new report from Jupiter Research.

 

By 2007, consumers will use debit cards more often than credit cards for online purchases, mirroring a shift that already has taken place offline, according to a new report from Jupiter Research.

Debit cards will account for 42% of online transactions next year, while credit cards will account for 39%, Jupiter estimates. In 2005, credit cards accounted for 42% of all online consumer transactions, while debit accounted for 39% of transactions.

Debit is expected to have compound annual growth of 14% between 2005 and 20101 while credit cards will experience CAGR of 8%, according to Jupiter.

The increased use of debit cards online is due in part to consumers’ growing comfort with the payment method after using it for offline purchases and payments, Jupiter said. Consumers also like the fact that debit transactions don’t result in the finance charges and debt associated with credit cards.

At the same time that debit use is rising, the use of alternate payment schemes continues to be limited to commerce categories, such as consumer auctions and wireless content sites, where card-based payments are ill-suited. Jupiter says it expects the highest demand for alternate payment solutions to remain concentrated in those categories for at least the next five years.

In 2005, alternate payments accounted for 98% of wireless content payments and 59% of auction payments. That compares with Jupiter’s forecasts of 96% and 63%, respectively, for 2010.

comments powered by Disqus

Advertisement

Advertisement

Advertisement

From IR Blogs

FPO

Deepak Agarwal / E-Commerce

Back-to-school insights from a Top 100 online retailer

It’s the second-largest online shopping season, and one nomorerack.com CEO pays close attention to. Here ...

FPO

Kevin Sterneckert / E-Commerce

The ghost economy: an $800 billion retail data disconnect

A new twist on a classic holiday story that online retailers will relive in the ...

Advertisement