The use of alternative payments methods continues to evolve, according to the results of the “5th Annual Online Retail Payments Forecast 2012-2017” released by Javelin Research & Strategy.
While alternative payments dropped to 16% of online purchases in 2012 from 17% in 2011, Javelin projects they will jump to 20% of online retail and travel purchases by 2017 and the use of credit cards will hold steady at 42% of online purchases.
According to the report, the use of alternative payments is being propelled by the online credit service Bill Me Later, which climbed from only 1% of consumers using the service in 2010 to 21% of consumers in 2012. While credit cards are still the go-to payment option for bigger transactions, the average purchase amount via the online credit service Bill Me Later has witnessed one of the largest increases in 2012, the same report indicates. However, the leader in alternative payments remains PayPal, used by 84% of consumers who pay online with alternatives to payment cards.
According to the Javelin report, the mobile channel has experienced rapid adoption throughout the online retail sector and thus, 1 out of every 15 online purchases now originate from a mobile device.
The US online retail payments market has increased from USD 282 billion in 2011 to USD 318bn in 2012, and it is expected to grow an additional USD 140.5 billion over the next five years.
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