CO-OP Analysis Of Amazon Prime Day Shows Debit Cards Are The Online Shopper’s Favorite Payment Vehicle

July 15, 2021

Debit Transactions far Exceed Credit for Second Consecutive Year


Following a year of exponential growth in e-commerce, it’s no surprise Amazon’s annual Prime Day shopping holiday exceeded expectations. Total sales surpassed $11 billion, an all-time high for the massive e-commerce event, according to Adobe.

Transaction data analyzed by CO-OP Financial Services’ SmartGrowth card portfolio experts reveal debit cards were far and away the preferred spending tool for credit union members participating in Amazon Prime Day. Debit cards accounted for a full 90 percent of all Amazon credit and debit transactions processed by CO-OP on June 21 and 22, 2021, Amazon Prime Day 2021.

“A couple of payment market and consumer behavior trends are at play here,” said Beth Phillips, Director, Strategic Portfolio Growth for CO-OP. “On the one hand, credit spending has been down overall since the start of the COVID-19 pandemic. Also at work, however, are the bandwagon deals and specials from other large retailers that may have been successful at attracting heavy credit users away from Amazon during this promotional period.”

Indeed, the so-called halo effect of Prime Day resulted in large bumps for America’s largest non-Amazon retailers. Merchants with more than $1 billion in annual sales reported a 29 percent increase in e-commerce sales during Amazon Prime Day, according to Adobe.

Lower average spend may also be related to credit union members’ choice to use debit over credit for Amazon purchases. This year’s average Prime Day credit transaction was $52.23 as compared to the average debit transaction of $46.62. “Consumers typically have an ‘amount ceiling’ when buying,” said John Patton Senior Payments Advisor for CO-OP. “If the price hits that ceiling, they gravitate to credit.”

CO-OP’s data analysis showed that total credit and debit transactions on Amazon increased by just 2.8 percent between the 2020 and 2021 Amazon Prime Day events. Total transaction amount was up just 7.6 percent. This is not surprising, noted Phillips, given the two “annual” events were separated by only half a year. Amazon delayed 2020’s event due to COVID-19, hosting it October 13-14, 2020, instead of during the summer months as has been typical since the inaugural event on July 15, 2015.

In terms of what credit union members were buying during Prime Day, two standouts seemed reflective of pandemic behaviors. As compared to the 2020 fall event, the number of automotive parts and accessories purchases were up 25 percent on credit and 42 percent on debit. This may reflect the global shortage of new-car inventory and record-high prices for used cars, inspiring car owners to fix up instead of replace their existing vehicles. Pet supplies, too, were up 67 percent on credit and holding steady on debit. A July 2020 survey showed 20 percent of respondents adopted one or more dogs or cats between March and June 2020, a 5 percent year-over-year increase, according to Nielsen.

“Amazon Prime Day is a dry run for the e-commerce giant’s holiday season, helping the company anticipate demand and ready infrastructure and operations,” said Phillips. “Credit unions can leverage the event in much the same way, using the data insights to better understand the lifestyle moments around online shopping. Strategies for rewarding, incentivizing and enabling e-commerce across both card portfolios, but especially debit, should be high priorities for credit unions now.”

To learn more about how CO-OP’s SmartGrowth team can help credit unions prepare for the 2021 holiday season, visit SmartGrowth Consultation.

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