Chase Paymentech Reaps E-Commerce Gains From Holiday Traffic

While some analysts and retailers are describing the 2006 holiday spending period as mediocre, the recently ended season turned out to be bountiful for the nation's leading merchant acquirer, Dallas-based Chase Paymentech Solutions LLC. Chase Paymentech, which publishes its Chase Paymentech Pulse Index of holiday transaction and sales volume generated by some of its top electronic-commerce merchants, says net e-commerce sales for the period were up by 15% over the 2005 holiday shopping period. They also were up 12% from the third quarter. The index tracks an average of 1 million transactions a day. “We've seen solid e-retailing growth over this entire year,” Mike Clark, group executive of merchant relations, tells Digital Transactions News. Clark refused to disclose exact transaction and charge-volume figures. In contrast, the New York City-based International Council of Shopping Centers reported Thursday that December sales at U.S. chain stores increased only 3.1% over December 2005. In a news release, the association's chief economist, Michael Niemira, said, “Overall, this holiday season was a moderate one for retailers with some sectors performing stronger than others.” The Pulse index follows volume generated by 10 of the nation's 30 top Web merchants as ranked by Chicago-based Internet Retailer magazine from the Sunday before Thanksgiving (Nov. 19) through Jan. 1. Sales volume peaked Dec. 15, Clark says. Chase Paymentech claims to process half of all e-commerce volume. Clark wouldn't identify which of Chase Paymentech's merchants are accounted for in the index. In addition to higher volume in its core Visa/MasterCard card-processing services, other payment venues offered through Chase Paymentech posted strong growth during the holiday period, according to Clark. Those include Google Inc.'s new Google Checkout service, for which Chase Paymentech provides the backbone payment-processing platform, eBay Inc.'s PayPal, gift cards, the automated clearing house, and others. “More and more merchants are gravitating to those alternative payments,” says Clark. He adds that, “Years ago we considered ourselves a credit card processor. Now we're a payment processor. We're payment-agnostic.” According to Clark, consumers are shopping more on the Web because they can save time compared with going to stores and not having to fight the crowds; e-retailers now offer more services such as free shipping and gift wrapping, and buyers are becoming more confident about transaction security.