The US online payment market

America is the world’s leading e-commerce market and a highly lucrative target for any online merchant

Countries United States

Intro United States

Even in turbulent times, the US economy continues to perform. The IMF forecasts that American GDP will grow by 3.7% in 2022, falling to 2.4% in 2023 [1]. Despite concerns about high inflation, consumer spending was still growing at a rate of over 1% when this guide was last updated.

In the early months of 2022, despite a challenging situation on many fronts internationally, US consumer confidence remained positive [3]. According to Moody’s, investment volumes were still rising in the first quarter of 2022 [4].

After a sharp peak during the worst of the pandemic, US unemployment fell to just 3.6% in March 2022 [5]. Economists usually define “full employment” as occurring when unemployment rates are somewhere between 3% and 4% [6].

In the United States, e-commerce, fresh from a shot in the arm during the pandemic, also remains robust. In some categories, for instance auto parts or groceries, the annual growth in online orders is between 20% and 30% [7]. And this double-figure growth in online commerce is expected to persist until at least 2026 [7].

America’s e-commerce market

According to the last annualised figures available, the total e-commerce market in the United States is worth US$1,403 billion [8]. US e-commerce is growing at a rate of 19% a year. An average US e-commerce shopper spends $4,233 a year online. Online sales are 14% of total retail sales. The most popular e-commerce purchase categories are health and beauty (22%), travel (20%) and electrical goods (16%).

In 2021, Amazon’s share of the US e-commerce market was at an all-time high of 57% [8]. Amazon Marketplace, the company’s platform for third-party sellers, captured 25% of the US online market on its own [10]. That still leaves an e-commerce market worth US$800 billion divided up between a broad ecosystem of different merchants; some generalist, others specialising in particular categories. That’s bigger than the e-commerce market in the whole of Western and Central Europe [8].

Payment methods in the US


The first modern credit card was the Diners Club charge card, founded in 1950 by a group of New York businessmen who, at least according to legend, one evening found themselves unexpectedly short of cash when it came time to pay their restaurant bill.

Given the American pedigree of the payment card, it’s unsurprising that credit cards are the United States‘ payment method of choice, with a 59% market share [8]. Despite this, however, alternative payment methods are also popular in the US.

E-wallets, the most popular US payment alternative, take 30% of the online payment market, bank-transfers 6%, cash 1% and various other payment methods a combined 4% [8]. Visa dominates the card market with a 57% share, Mastercard has 24%, American Express 11%, and other smaller card schemes 8% [8]. 

Enabling and limiting factors in US e-commerce

90% of Americans have a fixed-line Internet connection at home and 85% have an Internet-enabled smartphone [8]. According to the Pew Institute, the gap between urban and rural broadband provision is finally being bridged. In 2015, only 56% of rural households had a broadband connection [11]. Today, that figure is 72% [211]. As part of his stimulus plan, President Biden aims to spend $100 billion to give the US affordable, universal and high-speed broadband [12].

93% of Americans have a bank account and 66% have a credit card [8]. According to White House figures, along with the nearly 7% of unbanked, a further 19% of ‘underbanked’ Americans have a bank account but supplement it with non-traditional financial services like check cashing or payday loans [13].

The United States ranks 14th out of 160 in the World Bank’s Global Logistical Performance Index. In response to the rapid growth of e-commerce, the carrier industry in the USA has been expanding rapidly. At times, the US Postal Service struggled to cope during the pandemic, with volumes rising by 30% [14]. The post office also announced a rise in the price of sending packages of up to 6.5%, with the exact increase depending on what’s being sent and how [15]. 

Footnotes:

  1. https://www.imf.org/en/Publications/WEO/Issues/2022/04/19/world-economic-outlook-april-2022
  2. https://www.bea.gov/news/2022/personal-income-and-outlays-march-2022
  3. https://www.conference-board.org/topics/consumer-confidence
  4. https://www.economy.com/united-states/indicators
  5. https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm
  6. https://www.economicshelp.org/blog/453/unemployment/definition-of-full-employment
  7. https://www.emarketer.com/content/us-ecommerce-by-category-2022
  8. Original PPRO research
  9. https://www.pymnts.com/news/retail/2022/amazons-share-of-us-ecommerce-sales-hits-all-time-high-of-56-7-in-2021
  10. https://www.marketplacepulse.com/articles/amazon-marketplace-is-25-of-us-e-commerce
  11. https://www.pewresearch.org/internet/fact-sheet/internet-broadband/?menuItem=89fe9877-d6d0-42c5-bca0-8e6034e300aa
  12. https://www.wsj.com/articles/biden-aims-for-universal-high-speed-internet-in-infrastructure-plan-11617271202
  13. https://247wallst.com/banking-finance/2018/10/23/unbanked-population-trends-keep-improving-in-america
  14. https://nymag.com/intelligencer/2020/12/the-usps-is-struggling-with-covid-and-christmas-surges.html
  15. https://www.ecommercebytes.com/C/abblog/blog.pl?/pl/2020/11/1605561099.html

Popular Payment Methods in United States

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Quick facts

The American e-commerce market makes up 14% of retail sales in 2021 and is expected to continue to grow year on year. In fact, it is estimated that by 2040 online sales will make up 95% of all

The top three reasons Americans give for shopping online are cheaper prices, a wider range of products and the convenience of delivery.

The IMF predicts the US economy will grow by 6.4% in 2021 and 3.5% in 2022, however, they are also predicting the US will have inflation of 2.3% in 2021 which will continue to rise until 2025.

General Information

  • Population 331.0m
  • Population 15 + 269.2m
  • Online Population 297.9m
  • Area 9,833,520 km2
  • Currency USD
  • GDP 20,932.8bn USD
  • GDP per Capita 63,416 USD

Payment types

  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"59"},{"label":"Cash-based payments","value":"1"},{"label":"Bank transfer","value":"6"},{"label":"Wallets","value":"30"},{"label":"Other","value":"4"}]

Banked population
  • United States 93%
  • North America 94%
  • World 67%
Credit card penetration
  • United States 66%
  • North America 67%
  • World 19%
Internet penetration
  • United States 90%
  • North America 90%
  • World 62%
Smartphone penetration
  • United States 85%
  • North America 84%
  • World 70%

The E-Commerce Market

Top e-commerce segments 2019 | 2020

  1. Health & Beauty: 16% | 22%
  2. Airlines & Hotels: 41% | 20%
  3. Electrical Goods: 14% | 16%
  4. Toys, DIY, & Hobbies: 11% | 15%
  5. Homeware & Furniture: 9% | 12%

Cross-border e-commerce

  1. Cross-border proportion of total e-commerce – 8%
  2. Value of cross-border e-commerce ($US billion) – 106.3
  3. % of online shoppers who have shopped cross-border – 36%

Top 3 cross-border shopping origin markets

  1. China: 49%
  2. UK: 10%
  3. Canada: 6%
E-commerce % of total retail
  • United States 14%
  • North America 11%
  • World 20%
E-commerce completed on a mobile device
  • United States 49%
  • North America 47%
  • World 53%

E-Commerce Trends

  • E-commerce market size ($US billion) 1,277.3bn USD
  • E-Commerce spending per capita ($US) 3,877 USD
  • E-commerce spending as % of GDP 6.1%

The Credit Card Split

  • Visa
  • Mastercard
  • American Express
  • Local Schemes
  • Other
[{"label":"Visa","value":"57"},{"label":"Mastercard","value":"24"},{"label":"American Express","value":"11"},{"label":"Local Schemes","value":"7"},{"label":"Other","value":"1"}]

The information on our Insights pages has been compiled by us in cooperation with Datamatics and Wright & Brown. The data shown is partially owned by us and partially owned by GlobalData. © 2021 by PPRO Financial Ltd. No data and information can be used for any further publication without the explicit approval of PPRO.

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