You’ve Heard How Consumers Have Turned to Online Channels. Now the Numbers Show It

It’s become a common assertion in the payments business that consumers are turning to online sites for shopping as they contend with the various impacts of Covid-19. Now government data indicates just how well-founded that assertion is. E-commerce dollar volume in the second quarter totaled $211.5 billion, up 32% from the first quarter and 44% from the same period last year, according to the U.S. Department of Commerce’s latest numbers.

That performance came as total retail sales in the second quarter dropped 4%, leaving e-commerce accounting for a record 16.1% of total retail commerce. Only a year ago that share was just 11%.

Indeed, the April-through-June quarter, which bore the brunt of business closures and shelter-at-home policies in most states, yielded online sales fully 35% higher than 2019’s fourth quarter, when consumers shopped online in droves for holiday gifts. Compared to the year’s first quarter, the second-quarter performance was nearly one-third higher.

Another way of looking at the second-quarter numbers: The government’s e-commerce data goes back to the final quarter of 1999, which means it took nearly 17 years for e-commerce volume to reach the $100 billion level. Now, within less than four years, that total has doubled.

Mirroring the Commerce Department statistics, e-commerce goliath Amazon.com late last month reported net sales for the second quarter of $88.9 billion, virtually even with what it saw in the Christmas quarter and up 40% year-over-year.

Transaction processors are seeing much the same effect extending into the current quarter. For credit cards, some 51.5% of purchase volume, and 41% of transactions, occurred in card-not-present channels in the week ending Aug. 16, according to the latest report from PSCU, a major processor for credit unions nationwide. That transaction share was up 9 percentage points compared to the same week in 2019.

The story with debit card volume is similar. Here, 41.6% of purchase volume and 28.1% of transactions occurred as CNP flows, PSCU reports. The debit transaction share was up 7 percentage points compared to a year ago. St. Petersburg, Fla.-based PSCU processes 3.8 billion transactions yearly for 1,500 credit unions.