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Holiday Spending to Surge Despite Inflation Fatigue
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Klarna Expands BNPL Offering to In-Store Terminals
Point-to-Point Encryption: A Critical Shield for Payment Data
Walmart and Amazon Expand Payment Options to Meet Consumer Demand
ECOMMERCE TRENDS
Holiday Spending to Surge Despite Inflation Fatigue
Online holiday spending is expected to rise by 7% this year, according to Signifyd’s Holiday Ecommerce Pulse projection. Shoppers are set to boost Cyber Five sales—from Thanksgiving to Cyber Monday—by 8% over last year, with total Q4 sales also climbing by 7%.
Despite consumers trading down for cheaper alternatives, they continue to spend. August saw online sales rise by 11% year-over-year, though the average order value (AOV) dropped by 3%, signaling cautious buying behavior.
Signifyd’s Phelim Killough noted that demand remains high, but shoppers are more selective at checkout. This trend is expected to persist into the holiday season, with consumers prioritizing discounts and value purchases.
The fashion and apparel (+12%), electronics (+8%), and grocery (+20%) sectors are forecasted to experience significant holiday gains, while alcohol and home goods may see declines.
A shift in the calendar means 40% of Cyber Five spending will occur in December, driving a sales boost of 18% that month. Retailers are advised to prepare for a cautious but active holiday season.
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ECOMMERCE PAYMENTS
Klarna Expands BNPL Offering to In-Store Terminals Through Adyen Partnership
Klarna has partnered with Adyen to bring its buy now, pay later (BNPL) option to physical payment terminals across North America, Europe, and Australia. This marks the first time Klarna’s BNPL services will be available on all Adyen terminals worldwide, further expanding Klarna’s presence in physical retail stores.
The rollout, starting with a pilot program, is expected to fully launch next month. Klarna’s Chief Commercial Officer, David Sykes, emphasized the company’s ambition to offer flexible payments at every checkout, powered by this strategic collaboration with Adyen.
Research shows that only 17.5% of merchants offer BNPL options in physical stores, compared to 35% online. Klarna’s partnership aims to bridge this gap, giving consumers more payment flexibility in brick-and-mortar settings.
This move follows Klarna’s recent partnership with Xero, enabling small businesses to offer BNPL options while maintaining healthy cash flow. BNPL is especially popular among paycheck-to-paycheck consumers, with 26% of those struggling to pay bills expected to use BNPL in the next year.
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ECOMMERCE TECH
Point-to-Point Encryption: A Critical Shield for Payment Data
As the digital payments landscape evolves, point-to-point encryption (P2PE) has emerged as a vital tool for protecting sensitive payment information. With 77% of consumers likely to abandon their carts if their preferred payment method is unavailable, retailers must balance convenience with security.
P2PE encrypts payment data from the moment it’s captured at the terminal until it reaches a secure endpoint. This makes the data unreadable to hackers, ensuring customer payment details remain safe. Unlike end-to-end encryption, P2PE follows strict Payment Card Industry Data Security Standards (PCI DSS), offering specialized protection for payment transactions.
While the initial cost of implementing P2PE might concern smaller businesses, it leads to long-term savings by reducing compliance costs and minimizing fraud risks. Moreover, P2PE provides scalable solutions that can grow with businesses, ensuring they stay secure as they expand.
In a world where cybercriminals are increasingly targeting digital transactions, P2PE is a cost-effective investment that enhances both security and customer trust.
ECOMMERCE DIGITAL PAYMENT
Walmart and Amazon Expand Payment Options to Meet Consumer Demand
As consumers seek greater flexibility in managing their finances, Walmart and Amazon are introducing new payment options. Walmart has partnered with Fiserv to offer real-time pay-by-bank transactions, allowing immediate updates to customers’ bank balances, a faster alternative to previous systems.
Consumers are increasingly choosing debit over credit, especially those facing financial pressures. PYMNTS Intelligence found that younger generations prefer debit, and interest in pay-by-bank (A2A) payments is rising, with 36% of U.S. consumers using it in the last three months.
Amazon, meanwhile, has integrated PayPal into its Buy with Prime program and expanded its Just Walk Out technology, offering frictionless checkout in more locations. These efforts reflect the growing consumer demand for more payment choices, with 75% of shoppers valuing the ability to use their preferred method, per PYMNTS Intelligence’s 2024 Global Digital Shopping Index.
As consumers prioritize flexibility, offering diverse payment options has become a necessity for retailers like Walmart and Amazon to remain competitive and build customer loyalty.
Signing off,
The Merchant @CartHustle