As the holiday season approaches 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 annual 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 2020.

In-store purchases remain most important shopping channel. Nearly every single consumer (95%) made a purchase in a store in the past month, unchanged from 2018. Issuers should identify the top spend categories and/or stores in their card portfolio, offering discounts and rewards to ensure top of wallet status for use during the holiday shopping season. 

Credit cards tighten grip on top of wallet status. Since last year, credit cards were the only top payment method to increase its average purchase amount ($150 vs. $141) and average number of purchases in the past 30 days (8.0x vs. 7.4x). New innovations such as contactless are starting to become more commonplace (see Javelin’s The Contactles Conundrum: Making the Business Case) and are designed to push more spend toward cards. Merchants can prepare for higher usage of contactless cards (and by default, mobile wallets) by offering ‘contactless only’ lanes or mobile POS readers equipped with contactless technology to speed up checkout times.

Online purchase rates decline as volume moves to mobile. Online purchase rates over the past 30 days declined from 2018 (62% to 57%) while mobile increased (36% to 40%). Still, cards and online payment services (PayPal, Amazon Pay, etc.) continue to be very popular. Issuers and merchants need to continue to ensure smooth checkout experiences to prevent abandoned carts. American Express, Discover, Mastercard, and Visa recently began rolling out its universal click to pay button based on the new EMV Secure Remote Commerce industry standard. Clear messaging and guidance of the button will be needed to ensure a smooth transition away from individual network buttons.

Mobile purchase rates and transaction amounts grow. Consumers continue to grow more and more comfortable with mobile initiated purchases. Across the board, the top three transaction methods grew in terms of transaction size and frequency. As mobile first design becomes the norm and consumers continue to grow in comfortability with mobile devices, there is likely to be a continued shift toward mobile spend and away from online. Merchants will need to ensure all online functionality is available on the mobile site/app. Financial institutions need to continue to ensure the same for online and mobile banking as consumers look to monitor and control spend even more during the holidays.

Payroll cards heavily used among users. While only a small percentage (6%) of consumers own a payroll card, they are heavily used among their owners, climbing into the top three payment methods for the first time. Issuers may want to consider further promotion of the payroll card among business clients with employees with low checking account ownership and/or those looking for an additional budgeting tool.


About Rachel Huber

Rachel is an analyst in Javelin’s payments practice. Her focus is on the developing payments industry, with specific interests in e-commerce, person-to-person payments, digital wallets, and generational differences in payment preferences. 

Before joining Javelin, Rachel was an analyst in Fiserv’s global sales organization. She focused on competitive intelligence and thought leadership on emerging technologies in support of the card services division. Rachel began her career in investment management as a sell-side analyst before moving into mutual fund compliance at US Bank.

Rachel holds a BBA in finance and marketing and an MBA with specialization in investment management, both from the University of Wisconsin-Milwaukee’s Lubar School of Business.

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