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Hitwise Intelligence - Heather Dougherty - North America
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Alternative Online Payment Growing In Popularity
December 12, 2007
Traffic to the Alternative Payments Category is up 17% for the week ending Dec. 8, 2007 over same week during the previous year. The main driver of this growth was from the increase in traffic to Bill Me Later, which is up 271% from last year. The service is growing in popularity through 'buy now, pay later' and '90 days same as cash' options as opposed to storing payment information. Despite discounts and promotions to encourage usage among the two other major players in the category, PayPal and Google Checkout each experienced declines in traffic of 1% and 34% respectively from the same time last year.
There are two key factors for success within the Alternative Payments Category - availability on retailer's web sites followed by consumer adoption. For Bill Me Later, being a payment option on large retail sites such as Walmart.com and Overstock.com has been a major source of traffic. For the week ending Dec. 9, 2007, 12% of the upstream traffic to Bill Me Later was from Walmart.com and 8% was from Overstock.com. Both of the sites are successful customer acquisition channels, the majority of visitors are new - 84% for each site - and have not visited Bill Me Later in the past 30 days.
Once shoppers have been approved for the Bill Me Later service, they are checking out where else they can spend their new line of credit and various promotions on shopping.billmelater.com (a listing of merchants that offer the service). 15% of visitors to Bill Me Later visited the merchant listings following a visit and traffic to the site has been growing steadily since the week of Oct. 6, 2007.
Yesterday, Amazon announced that they would begin to offer Bill Me Later as a payment option. This partnership will certainly help drive usage of the service with Amazon's broad reach in the online retail market. Additionally, Amazon will also invest an undisclosed sum in the company.
Posted by Heather Dougherty at 01:10 PM
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Comments
At Hitwise we report our data as market share, rather than raw numbers, to show the competitive position of a website or category in relation to all Internet behavior.
To your point, one important note is that the overall US market share for PayPal (0.27%) is larger than both Bill Me Later (0.0075%) and Google Checkout (0.0063%) for the week ending Dec. 8, 2007.
Posted by Heather Dougherty | December 13, 2007 03:52 PM
So that I'm clear, does PayPal have 27% market share of the US alternative payments category or .27%? Additionally, which payment methods (Visa? Mastercard?, et al) make up the balance, and if you know, what are their market shares for the same week?
Thanks!
Posted by Nate Too | December 21, 2007 10:39 AM
To be clear, does PP have 27% mrkt shr in the alternative payments cat or .27%? Who are the other players in this space that make up the balance?
Thanks!
Posted by Nate Too | December 21, 2007 11:35 AM
Great questions, thanks!
To clarify, the market share of total US Internet visits is 0.28%. Of the .28% of total visits, PayPal captures the largest share - 95% of the category.
The Alternate Payments methods category includes only PayPal, Google Checkout, and Bill Me Later because they comprise the majority of online payment options outside of credit & debit cards. Visits to the websites of traditional credit card such as Visa, Mastercard, and American Express are not included because the transactions take place upon the merchant sites.
Hopefully this helps answer your questions!
Thanks,
Heather
Posted by Heather | December 21, 2007 11:48 AM
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I find your statistics very interesting. Do the raw numbers support the conclusions. Percentages sometimes do not tell us the whole truth. It would help to see the charts with the raw numbers.
Thanks for an interesting post.
Posted by Small Business Marketing | December 12, 2007 10:58 PM