As the Consumer Goes....Must eCommerce Follow?

Endless Growth?

Last year, eCommerce sales grew 21.8% to $165.9 billion, vs and overall growth of just 3.9% for the broader retail industry. According to Internet Retailer, even big box retailers are turning to eCommerce sales more and more as that growth far outpaces the traditional stores, the share of revenues grows north of 30%. Even L.L. Bean, which made its bones through phone catalogue sales now counts almost 60% of their sales through their website.

Online sales continue to show growth this year in light of paltry overall economic growth of just 0.9% in the first quarter. According to Comscore, ecommerce sales are up an average of 12.5% in each of the first four months of 2008. The press release points out that after a weak March of just 9% growth, eCommerce rebounded in April to put in 15% year over year growth, though some of that may have to do with tax refunds hitting consumers' wallets.

The question is whether rising consumer prices that are compounding an already difficult economic environment will put an end to the growth in eCommerce. A gallon of gas is now at or over $4/gallon. Food prices are massively on the rise. Consumer confidence has fallen below 50 to 45.7 vs. 100 last September and 33.6% of the people surveyed anticipate a worsening business environment over the next 6 months according to the Conference Board.

Will retail in general and eCommerce specifically be able to sustain this growth?

What Do Payments Cost?

Internet Retailer digs into what the true costs of credit card processing are in attempting to educate its readers on how to pick among the various merchant acquirers. IR counsels that the Base rate, which is the rate many people think they're actually paying for each transaction, can be misleading. There are so many fees that go into credit card processing that the Base Rate can be less than half of the overall rate a merchant pays for a transaction.

Rates paid by merchants vary with the type of card, and the Interchange Rates vary as well, and can boost the Net Rate to well over 4%. Internet Retailer examines 6 different credit cards and the Interchange rates they face on an imaginary $169 transaction. The same article says 2.2% + $0.30 is the typical Base Rate for a mid-sized retailer. Compared with Mpayy's max price of $0.20 + 2.00%, the savings abound.



That chart shows at least a $3 cost savings on the part of the retailer for every transaction!

Further, a recent CyberSource Survey shows that not only can Mpayy bring online retailers around the country cost savings on their payment processing and 0% fraud liability, but it will boost conversion!



Mpayy has a good pipeline of new clients, but we are lightweight, easy to implement and infinitely scalable. We look forward to hearing YOU knock on our door.

As growth starts flattening due to a weak consumer, Mpayy is the place to turn to grow your online business!