As the holiday season continues and the frequency of payments spikes, understanding how and where consumers use different payment devices is invaluable to both merchants and issuers alike, helping assist in customer service, authorization, and fraud strategies. In this three part blog series, Javelin identifies key spending metrics for the in-store, online, and mobile channels, as well as methods of improving the frequency and value of a payment method with practical methods for issuers and merchants to determine how to balance their payment strategy this holiday season and through 2019.

Browser based e-commerce continues to grow with almost six in ten of consumers making online purchases monthly in 2018. In 2017-2018 the click and collect business model expanded with consumers purchasing goods (groceries, electronics, toys, etc.) online and picking the items up in store versus having them delivered. Add the expanded usage of subscription based services and online marketplaces, e-commerce payments will be expanding in the years to come.

In 2019 Javelin Strategy & Research will continue to monitor and evaluate the payment preferences of consumers in ecommerce channel while monitoring how in-app purchases may cause this payment channel to mature faster than expected. 

Strategic Insights:
More than half of consumers are actively making purchases online (within a web browser) to make purchases but make them less than 4 times a month. To increase online shopping, both merchants and issuers should focus on card on file strategies. The consolidation of the checkout supported by EMVco provides a simplified checkout experience with Secure Remote Commerce will help reduce confusion at checkout. 

Consumers will also change their shopping and payment habits within e-commerce when they have a bad experience. The industry migration to 3DS 2.0 and adaptive analytics will also help increase the checkout rates and reduce false declines. Javelin found that 1 in 15 consumers were impacted by a false decline. With higher false positives, consumers are likely to change payment products. 

Although the frequency of purchasing doesn’t significantly change by payment channel, credit cards have 33% more in average ticket value. With higher false positive decline rates and increasing fraud rates in e-commerce channels, ensuring consumers are aware of the safety in using their debit card is important.

Consumers who use third party payment channels like PayPal or Amazon Pay have the lowest spending frequency and dollar amount of any of the payment channels. The e-commerce shopper may also be using credit and debit card channels to make additional purchases. Providing consumers with an understanding of consumer protections when using debit and credit card accounts may help migrate consumers to the bank payment channels.


3Javelin Strategy & Research October 2018, Addressing the Threat of False Positive Declines



About Krista Tedder

Krista Tedder is an experienced thought leader in the payments industry working with issuing and acquiring financial institutions, merchants, and payment service providers. She advises clients on how to move from foundational to transformational payment practices to improve consumer satisfaction while increasing profitability. Krista provides strategic consulting on core technology providers and methodologies, emerging technologies, and product marketing functions for payments, including market assessments, go-to market strategies, and content marketing strategies.

Krista’s experience crosses all payment verticals of the past 20 years — from merchant, consumer (debit, credit, prepaid, mortgage), and processor (acquiring and issuing), to brand networks. Her experience in various management roles at Bank of America, First Data, Mastercard, and fintechs brings a holistic point of view to payment research. She has given numerous presentations at conferences globally — BAI Retail Delivery, Card Forum, Mastercard Global Risk Leadership, World Credit Union Conference, and others.

Krista holds a Bachelor of Arts degree from York College of Pennsylvania with a focus on communications and education. Ongoing education and certification in product management, product development, and marketing enable Krista to articulate business challenges and opportunities to Javelin Strategy clients within the Payments Practice.

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