August 17, 2010, 2:07 PM

PayPal wins more online consumers, but credit cards remain king

Auriemma survey shows the eBay payment service moves past debit cards.

Thad Rueter

Senior Editor

Lead Photo

PayPal continues to gain users, with 75% of consumers having a PayPal account, up from 55% in 2008, according to survey data from Auriemma Consulting Group.

The payments research firm based its findings on surveys of 428 cardholders conducted in June. EBay Inc. owns PayPal.

Consumers making purchases online tend to use credit cards most often, the survey suggests. 70% of consumers use credit cards for web transactions. But PayPal is in second place, with 39% of survey respondents using the service for online purchases. The method edged out debit cards, at 37%.

The findings echo a Javelin Strategy & Research report earlier this year about online payment methods that found so-called alternative payment methods such as PayPal gaining popularity.

The Auriemma survey also found that while respondents considered credit cards more convenient than other payment methods, PayPal was viewed as the most secure.

The average purchase amount for PayPal transactions stands as just under $60, virtually unchanged from the 2008 survey, Auriemma says. But the number of annual PayPal transactions has grown, to 21.2 per user from 10.8 in 2008.

“PayPal is not just for eBay anymore,” says Nancy Stahl, editor of the research firm’s Cardbeat publication. “Nearly two-thirds of total PayPal transactions were generated through non-eBay activity.”

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