A new nationwide consumer study by Javelin Strategy & Research shows that online transactions will more than double to reach $355.2 billion over the next five years, sparking a dramatic shift in how Americans pay for all purchases. By 2012, 30% of Americans will turn to online alternative payments, instead of reaching to their wallet for a traditional credit card. The study predicts that online alternative transactions will more than double by 2012 as consumers increasingly view these methods as a vehicle for secure and convenient transactions. Javelin researchers also believe this is not a niche trend. The growth of alternative payment methods will precipitate the evolution of credit cards and decline of cash and checks.

Javelin researchers found that as alternative payment methods win new customers, credit cards will lose some of their dominance online. Traditional brands and methods will endure representing the largest dollar amount and percentage of total online transactions, but that percentage will slip to 44% by 2012, according to the study. Debit card reward programs and promotions continue to lure younger consumers and will help to nearly triple the debit card transaction volume to $93.9 billion by 2012.

The makeup and demographics of online consumers will not significantly change during the next five years, but Javelin researchers found that increased popularity of alternative payments is due to attitudes and concerns. Online consumers will voluntarily embrace alternative payments for their convenience and security features, rather than a lack of access to credit or debit cards.

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