It Did Turn Out To Be a Very Merry Christmas Online for Merchant Processors

The strong increases in online payment transactions noticed by merchant acquirers and others in November continued through the entire holiday shopping season, according to recently released data. Leading e-commerce acquirer Chase Paymentech reported on Thursday that its Cyber Holiday Pulse Index recorded nearly 360 million transactions valued at approximately $14.5 billion from Nov. 1 through Dec. 31, up 38% and 26% respectively from the year-earlier period.

Internet research firm comScore Inc., meanwhile, this week reported that online holiday shopping hit a record $37.2 billion in the November-December period, up 15% from 2010’s holiday season.

All of this means that most acquirers and independent sales organization likely saw strong increases in transaction-based revenues in 2011’s fourth quarter and credit card issuers enjoyed a surge of interchange income. More indications of transaction and volume trends will come in the next few weeks when leading payment networks Visa Inc. and MasterCard Inc. report quarterly results.

A spokesperson for Dallas-based Chase Paymentech says no merchant sector in the company’s e-commerce portfolio saw weak growth in the holiday season. “Growth was strong across the board, but there were some notable increases. Digital media was the biggest winner,” the spokesperson tells Digital Transactions News by e-mail without disclosing actual values. Mass-market retailers and apparel/shoe merchants fared best among sellers of hard goods, he adds.

Chase Paymentech’s index tracks 50 leading e-commerce merchants. The spokesperson says the index does not have data indicating whether the Durbin Amendment, which imposed severe interchange price controls on debit cards from big banks beginning Oct. 1, shifted any consumer spending to other payment forms in the holiday period.

Reston, Va.-based comScore noted in a press release that despite the overall increase in online spending in late 2011, consumers displayed “continuing price sensitivity.” Chase Paymentech, with its stronger increase in transactions than dollar volume, lent some credence to that observation by noting that its average ticket fell 9%. Some of that decrease might have come from more transactions in low-ticket sectors such as digital media, however, and some merchant sectors saw increases. Average tickets in apparel/shoes, for example, rose 7.4%, according to the spokesperson.

The Chase Paymentech spokesperson attributed the overall increase to several factors, the first being the secular shift in consumer spending to e-commerce. “Second, and more specific to the holiday season, promotional activity was especially active this year, attracting more online shoppers,” the spokesperson says. “And third, the shift to digital media is moving large numbers of transactions online.”

ComScore said consumer e-commerce exceeded $1 billion in 10 of the holiday season’s days. The single biggest online shopping day was Cyber Monday, Nov. 28, with $1.25 billion in online purchases, followed by Monday, Dec. 5 at $1.18 billion.