Peak Shopping Days Give Cause for Cautious Optimism on Payments

Electronic payments are showing signs of life as consumers open up their wallets and purses early in this holiday spending season. But just how wide they'll open those wallets and purses as the season goes on is uncertain. The early take is that volumes are up from 2008's anemic levels, but average tickets are still declining. Reston, Va.-based comScore Inc., which tracks Internet commerce, on Wednesday reported that online spending on Cyber Monday, the Monday after Thanksgiving, hit $887 million, up 5% from $846 million on 2008's Cyber Monday. The Nov. 30 volume also matched the heaviest online shopping day comScore ever tracked, Dec. 9, 2008. This year's increase came mostly because of new buyers, comScore said. The company estimates 8.7 million buyers made purchases on Cyber Monday, up 6% from 8.2 million a year ago. But the average ticket declined 1.5% to $102.19 from $103.72 on 2008's Cyber Monday, comScore says. The company gets its data from a panel of 1 million U.S. consumers who give comScore permission to track their Internet surfing. Ken Paterson, vice president of research operations at Mercator Advisory Group Inc., notes that other industry figures show credit card charges are declining. “That fact does not surprise me at all,” he says regarding comScore's data. “It reflects consumer caution in spending.” In their latest quarterly reports, Visa Inc. and MasterCard Inc. reported drops of 10% and 14%, respectively, in credit card dollar volumes for purchases, though debit card charge volumes grew in the single digits (Digital Transactions News, Nov. 3). New figures from leading payment card processor First Data Corp. reflect the same trends comScore identified. In a report Wednesday, First Data's SpendTrend monitoring service said overall transaction volume on “Black Friday,” the day after Thanksgiving and the traditional start of the holiday spending rush, was up 7.9% versus a year earlier. But same-store sales processed by First Data grew only 4.8%, implying a smaller average ticket. First Data didn't disclose actual transaction or dollar figures. PIN debit cards led the pack in growth on the First Data system on Black Friday. Transactions rose 8.9% and charge volume grew 7.6%. Black Friday transaction volume on credit cards and signature debit cards grew 5.8% versus a year ago, but dollar volume rose only 2.5%. “Black Friday was better than last year both in terms of transaction growth and total dollars spent at the point of sale,” Silvio Tavares, senior vice president of investor relations and decision support at Atlanta-based First Data, said in a statement. “However, there is reason to remain cautious as our analysis suggests consumers remain very value-conscious and paid more often with their debit cards instead of credit cards.” Leading online alternative payments provider PayPal Inc. reported late Tuesday that total payment volume on Cyber Monday was up about 20% over 2008's Cyber Monday, the third straight year of double-digit growth in online sales. PayPal didn't disclose raw figures. Black Friday volumes also grew 20%, and Thanksgiving day volumes grew about 25%. A PayPal spokesperson attributed the increases to deals on the Web sites of eBay Inc., PayPal's parent company, and PayPal's thousands of individual merchant acceptors. Mobile payments through PayPal jumped 140% on Black Friday and 190% on Cyber Monday compared to those of an average Friday and Monday, respectively, PayPal said in a release. Separately, First Data, also a major prepaid card processor, reported that gift card spending was up sharply on Black Friday. The dollar value of all gift cards sold grew 17.8% versus a year earlier, and the number of gift cards sold grew 9.8%. The average card amount rose 7.2% to $39.50 from $36.83 in 2008.