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Payment cards account for more than half of e-commerce payments in the US, GlobalData reveals

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Payment cards account for more than half of e-commerce payments in the US, GlobalData reveals. Source: Shutterstock.com

Payment cards are the preferred payment method for e-commerce purchases in the U.S., accounting for a combined 56.3% of market share in 2023, according to the 2023 Financial Services Consumer Survey by GlobalData, publisher of EPI.

E-commerce analytics GlobalData reveals that the U.S. e-commerce market grew 9.8% in 2023 to reach $2 trillion as more consumers switched from offline to online shopping. The e-commerce market is expected to grow 7.9% to reach $2.1 trillion in 2024.

The United States is the second largest e-commerce market in the world, after China

The United States accounted for 30.1% of the global e-commerce market share by payment value in 2023, while China’s e-commerce market reached $2.2 trillion. The UK came in a distant third with $322.6 billion in 2023. The global e-commerce landscape is unlikely to change in 2024, with China likely to maintain its leading position.

Kartik Challa, Senior Analyst, Banking and Payments at GlobalData, comments: “The US e-commerce market is growing at a healthy pace. A well-developed payment infrastructure, high smartphone adoption and internet penetration, proliferation of global brands like PayPal, Apple Pay and Google Pay, high merchant acceptance and increasing number of online shoppers are all supporting this growth.”

The rise of online shopping events such as Black Friday, Amazon Prime Day and Cyber ​​​​Monday have also boosted e-commerce. Meanwhile, the presence of secure payment solutions, including Mastercard ID Theft Protection and faster payment options such as Click to Pay and PayPal Checkout, have encouraged consumers to shop online.

GlobalData’s 2023 Financial Services Consumer Survey found that 91.3% of U.S. consumers have made an online purchase in the past six months, while only 3.4% of respondents have never shopped online.

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GlobalData’s study also found that among the various tools used for e-commerce purchases, payment cards are the most preferred, in line with consumers’ traditional preference for card payments in the country. Together, they accounted for 56.3% of e-commerce purchases in 2023, while credit and charge cards alone accounted for 41.6%. This is mainly due to benefits such as loyalty points, cashback, discounts from merchants, and the availability of installment payments.

While payment cards still dominate, alternative payment solutions are also used for online purchases and together account for 30.9% share, with PayPal being the most preferred payment option, followed by other brands such as Apple Pay, Amazon Pay, and Google Pay. Launched in 1999 in the US, PayPal alone accounted for 7.7% share of the total e-commerce payment value in 2023.

Challa concludes: “The U.S. e-commerce market is expected to grow rapidly and reach $2.7 trillion by 2028, with a projected annual growth rate of 5.9% between 2024 and 2028. Evolving authentication measures that offer enhanced security and faster checkout options will further encourage online payments.”