Alternative payments forecast from Javelin Strategy & Research

About 1/3 of all online retail transactions are predicted to be alternative payments by 2013 according to the new research released by Javelin Strategy & Research. The agency announced its 2008 Online Retail Payments Forecast made on the basis of increasing appeal and growth of alternative payment methods and the impact it represents to banks and traditional payment card networks.

In spite of the fact that online payments represent only 3.5% of total retail sales in 2008 alternative payments are growing in popularity being widely adopted by the consumers. Thus, they are positively replacing transactions made via conventional credit and debit cards controlled by financial institutions.

Javelin president and founder, James Van Dyke reports that during this holiday shopping season the agency projects $7.8 billion will come from alternative payments against $35 billion from traditional online payment methods.

Besides, Javelin Strategy & Research predicts that overall growth for online payments is expected to reach $148 billion in 2008, climbing to $268 billion by 2013. According to the agency alternative payments will likely grow faster especially those that have built brand awareness with consumers, such as PayPal; as well as alternatives for traditional companies such as Stored Value.