Each year, First Annapolis tracks the acceptance of emerging payments products at the Top 500 U.S. e-commerce retailers as identified in Internet Retailer’s Top 500 Guide. These merchants represent nearly $115 billion in annual sales (about half of all ecommerce) and therefore provide an important perspective on the growth of new payment products. This year, we have expanded our study to include data on how alternative payments are positioned by merchants and the promotional activity that has been linked to these products in the last month. Highlights from the study include the following:
1. 42% of the Top 500 merchants accept at least one alternative payment (including PayPal, Bill Me Later, Google Checkout, eBillme, Amazon Payments, and e-Check/ACH products). 9% of these retailers accept three or more of these methods, up from 5% in 2007. While the majority of internet retailers have still not adopted a diversified emerging payments acceptance strategy, more merchants are offering more choices.
2. 27% of the Top 500 offer a traditional co-brand or private label credit card. However, at checkout, a co-brand or PLCC product is listed as the default payment option at the checkout at only 8% of the merchants that issue these products. 14% of the merchants that offer alternative payment products list one of these methods as the default option at checkout.
3. Half of the sites that show an alternative option as the default payment method offer this product on a separate page, usually before the traditional checkout process begins. Over 40% of computer/electronic and office supply retailers used this approach. For example, newegg.com prompts the customer to pay with Bill Me Later before going to the main checkout page.
4. 31% of all merchants promote some form of payment on the main page of their website. While most of these merchants list the traditional card brands they accept, 10% promoted an emerging payment product on their main page. Over half of all jewelry, hardware/home improvement, and office supply merchants list some form of payment product on their main page.
5. 12% of all merchants offer a promotion tied to a certain payment method. The most prominent offer was from Bill Me Later to delay payment for 90 days on purchases over $200, subject to credit approval.
6. eBillme is the most prominent ACH-based alternative payment method, with 4% of merchants accepting this product. Other notable ACH payments providers Moneta and Secure Vault Payments are each offered at one Top 500 merchant. 3% of all merchants offered some form of in-house e-check or ACH payment method.
