E-transactions ousting paper-based payments

As per a new nationwide consumer payment preferences study conducted by BAI and Hitachi Consulting more and more customers give their preference to using electronic payments at the expense of cash and checks. The research was commissioned by First Data Corporation and its STAR(R) Network, Harland Clarke, MasterCard Worldwide, Metavante and PULSE.

Thus the 2008 Study of Consumer Payment Preferences reveals that 63% of all purchases are made by means of electronic payment options. Today the majority of payments made across all three payment sectors including bill payment are electronic. Payments made in the Internet were always predominantly electronic, almost by default.

In 2003 in-store payments underwent significant alterations while bill payments stayed the last bastion of paper-based payments. At the moment the situation is quite different as paper-based bill payments dropped from 55% in 2005 to 38% in 2008. 

As for in-store purchases, the customers’ trend to shift to electronic payments is incited by the increasing popularity of card-based payments, particularly debit. Today 37% of consumers' in-store purchases are maid with consumers' in-store purchases.

Card-based payments are eventually deposing checks and cash at the point of sale. Check payments for in-store purchases fell from 18% in 1999 to 8% in 2008 while cash dropped to 29%. And gift/prepaid cards usage didn’t turn to significantly increase for the last several years.