In a recent study done by Javelin Strategy & Research, they identify a significant shift in the balance between credit and debit use for online purchases. Given the current market conditions and new regulations imposed by the government, credit cards are starting to regain transaction share. It’s been awhile since credit cards had their fair share of the consumer’s online purchases. But the study done in the Online Retail Payments Forecast shows a healthy 16% increase in the U.S. online market as retail e-commerce sales continue to rise to $309 billion in 2011 and are further forecast to climb to an estimated $444 billion by 2016.
“After several years of declining use, credit cards are poised for resurgence,” said Beth Robertson, Director of Payments Research at Javelin. “Despite the nation’s very rocky economic recovery, consumers appear to have halted their belt-tightening and bank incentives to use credit cards rather than debit are gaining appeal.”
Credit cards typically generate higher consumer spending and greater revenue for merchants. This doesn’t mean that online shoppers should throw caution to the wind this holiday season. Frantic purchasing periods such as Black Friday or Cyber Monday usually cause consumers to throw out any sense of caution to make sure they are taking advantage of all the deals retailers are offering. Javelin’s study shows that consumers spend more money on a single online transaction using credit cards than when using other payment options. Consumers should especially careful during this holiday season and remember to set-up alerts on their account and monitor their spending online. Credit cards tend to be the better option rather than using debit cards. If someone was to steal your debit card and make fraudulent purchases, it’s a lot hard to get that money back. Most credit card companies will ask you not to pay the charge pending an investigation.
About Javelin Strategy & Research: Javelin Strategy & Research is the leading provider of quantitative and qualitative research focused on the global financial services industry. Our extensive quantitative data and deep analyst experience enable us to forecast the direction of the financial services market and make recommendations that empower you and your business to succeed.
SOURCE: Javelin Strategy & Research