Consumer holiday shopping plans bode well for acquirers

Consumers may feel somewhat insecure, financially, and budget conservatively for the holiday season. But many are prepared to overspend, according to a survey conducted by The Strawhecker Group and the Electronic Transactions Association. This bodes well in terms of revenue generation for merchants, and for acquirers that deliver the support merchants need.

"Merchants need more support from payment partners than ever before to meet emerging consumer payment demands and ensure a successful holiday season," the two organizations stated in a report.

TSG and ETA surveyed 992 consumers between Oct. 1 and 9, 2024, for the duo's fifth annual holiday spending survey. Consumers were asked about their spending plans as well as payment methods they planned to use.

Consumers are shopping early

What the partners in the study learned was that 46 percent of consumer respondents had already begun shopping for the holiday season, and about one in five were between halfway and completely finished with their shopping.

Most (72 percent) said they planned to spend less or the same as last year; nearly one in five (18 percent) said they are apt to overspend.

A majority of those surveyed plan to spend between $250 and $500 on gifts this year, similar to last year. But when pressed on their budgeting, 37 percent said they might go over budget, and 22 percent had no budget plans in place.

"Economic concerns are still top of mind for most shoppers," TSG and ETA wrote. "Shoppers are less concerned about availability of gifts this year compared to last year and [have] exchanged that concern with concerns over shipping delays."

Acquirers should highlight value-adds

Consumers want ways to extend their budgets this year. To meet that demand, merchants may be looking for buy now, pay (BNPL) later offerings, or other POS financing options, the report noted.

This could present significant opportunities for acquirers and their partners. Among the consumers surveyed, 58 percent had not used any of the commonly available BNPL options, down from 64 percent in 2023. Not surprisingly, the survey found that Gen Z and millennials are the generations most likely to use BNPL.

Acquirers and their sales partners can take other steps to make this a profitable holiday season. Fifty-four percent of surveyed consumers said they were worried about wasting gas, which points to ongoing demand for alternatives to in-store shopping.

Merchants also should be encouraged to leverage reporting tools that help them better understand their customers' payment preferences. For example, 37 percent of surveyed consumers have used tap-to-pay.

Conversion rates are highest for tap-to-pay, 1-click accounts, digital wallets and person-to-person payment apps, which indicates adoption of these payment methods will continue to grow, the survey findings suggest.

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