Payment cards are the preferred payment method for e-commerce purchases in the US, collectively accounting for 56.3% share in 2023, finds the 2023 Financial Services Consumer Survey conducted by GlobalData, publishers of EPI.
GlobalData’s E-Commerce Analytics reveal that e-commerce market in the US grew by 9.8% in 2023 to reach $2trn, as an increasing number of consumers shifted from offline to online purchases. The e-commerce market is estimated to grow by 7.9% to reach $2.1trn in 2024.
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The US is the second-largest e-commerce market globally behind China
The US accounted for 30.1% share in the global e-commerce market in terms of payments value in 2023, while the Chinese e-commerce market stood at $2.2trn. The UK stood at a distant third with $322.6bn in 2023. The global e-commerce landscape is unlikely to change in 2024 with China expected to retain its position at the top.
Kartik Challa, Senior Banking and Payments Analyst at GlobalData, comments: “The US e-commerce market is growing at a healthy pace. Well-developed payment infrastructure, high adoption of smartphones and internet penetration, proliferation of global brands like PayPal, Apple Pay and Google Pay, high merchant acceptance, and the increasing number of online shoppers all support this growth.”
The growth of online shopping events such as Black Friday, Amazon Prime Day, and Cyber Monday has also boosted e-commerce. Meanwhile, the presence of secure payment solutions, including Mastercard ID Theft Protection, and faster checkout options such as Click to Pay and PayPal Checkout, have encouraged consumers to shop online.
According to GlobalData’s 2023 Financial Services Consumer Survey, 91.3% of the US consumers shopped online in the past six months while only 3.4% of respondents never shopped online.
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By GlobalDataGlobalData’s survey also revealed that, among the various tools used for e-commerce purchases, payment cards are the most preferred, in line with the traditional consumer preference for card-based payments in the country. They collectively accounted for 56.3% share of the e-commerce purchases in 2023, with credit and charge cards alone accounting for 41.6% share. This is mainly driven by benefits such as reward points, cashback, discounts at partner merchants, and the availability of installment payment facilities.
While payment cards continue their dominance, alternative payment solutions are also used for online purchases and collectively accounted 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 in total ecommerce payments value in 2023.
Challa concludes: “The US e-commerce market is expected to rapidly evolve going forward and reach $2.7trn by 2028, with an anticipated compound 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.”
