TUE, 08 NOV, 2022-theGBJournal| A busy holiday shopping season is projected, with eCommerce transactions expected to rise 15% from October through December 2022, according to data analysis from millions of eCommerce transactions conducted by ACI Worldwide (NASDAQ: ACIW), a leading global provider of real-time digital payments software.
The spending predictions reflect that consumer optimism is holding strong, despite inflationary pressures and limited inventory, and beat last year’s predictions for the same period (14%).
“Consumers are quietly optimistic with their holiday season spending, but will be more price-conscious this year as inflation and economic uncertainty loom,” said Basant Singh, head of merchant, ACI Worldwide. “We’re seeing shoppers spend more on experiences rather than physical items as pent-up demand for travel, events and concerts remains strong post COVID.”
ACI’s eCommerce intelligence reports that the main sectors driving growth during the 2022 holiday season will be gaming (34%), travel and ticketing (29%), telco (18%), home improvement (13%) and fashion retail (7%).
Mobile payments slightly increase and preference for digital wallets grows
Mobile payments are projected to increase 5% during the 2022 holiday season, compared to the same period in 2021, while the average ticket value (ATV**) is expected to grow by 45% ($123), according to ACI eCommerce intelligence. Moreover, digital wallets are anticipated to be among the popular payment methods, with a projected 11% increase in transactions.
The ATV for buy now, pay later (BNPL) is anticipated to grow 10%. As inventory shortages persist, ACI forecasts a revival of the gift card industry with an expected 2x increase in ATV. Furthermore, spending within the gaming sector is predicted to rise 34% in transaction volume.
“Consumers are savvier on payment methods like BNPL as they look to delay spending by breaking up their purchases into smaller installments,” Singh continued. “In addition, consumers are showing a strong preference for digital wallets as a payment method as they shop more online and less in stores this holiday season. Merchants may want to consider improving the BNPL checkout experience for people with higher credit-approval rates. In addition, ensuring a smooth experience with digital wallet acceptance and strong fraud prevention in place will be beneficial.”
As merchants instill shipment cutoff dates for last-minute shoppers, the volume of transactions is expected to increase 24% for shipment cutoff: priority, 15% for shipment cutoff: ground and 10% for shipment cutoff: express. However, buy online, pick up in store (BOPIS) is forecasted to go up 9% during the 2022 holiday season compared to 2021, as consumers consider this alternative to paying for shipping. “With inflation driving shipment costs up, we can expect to see shoppers turning to other delivery channels like BOPIS to curb their expenses,” Singh concluded.
Fraudsters targeting high-value items
According to ACI data, the volume of friendly fraud increased 22% and the average transaction value grew 39% from January through September 2022, when compared to the same period in 2021. The data also shows that account takeover fraud doubled in the same time frame versus 2021.
“We’re seeing a significant increase in the average ticket value of friendly fraud, indicating that fraudsters are targeting high-value items like electronics and travel,” said Erika Dietrich, head of fraud management and payments analytics, ACI Worldwide. “We expect this trend to continue into the 2022 holiday season and encourage merchants and shoppers to be vigilant. Orchestration between merchants’ fraud prevention and payment strategies will be crucial to protect all entry points and adapt to changing fraud behaviors and payment channels at the same time.”
Note- Global eCommerce transaction is valued at $12.3 trillion in 2022
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