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Payment Acceptance trends in US DTC eCommerce

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2020 saw a shift in payment methods with the historical preference of credit cards showed signs of receding as debit cards, digital wallets, and Buy now, Pay Later (BNPL) services became more popular. According to the Global Payment Trends Report 2021 by FIS, digital wallets accounted for 44.5% of eCommerce transaction volumes in 2020, up 6.5% from 2019. By 2024, digital wallets are projected to grow an additional 38% over 2020 levels in North America and account for 52% of global payment transaction volume.1

The US has been lagging in digital/mobile wallet adoption when compared to global averages but digital wallets represent 30% of eCommerce transactions, up 24% over 2019 levels. For now, Debit and Credit cards still are the dominant payment methods, though digital wallets are fast catching on.

'Buy Now, Pay Later' grew 215% YOY for the first two months of 2021. Further 30% of Americans have used 'Buy Now, Pay Later' (BNPL)payments in Q3 2021, up from 23% in Q2 2021. It is popular across all demographics, providing a strong alternative to credit.4

Findings by Juniper Research indicate that there is an increase in appetite for new payment methods within eCommerce checkouts, including payments that are being facilitated by open banking ( third-party payment services accessing banking transactions through API) and digital wallet one-click checkout buttons.


Digital Wallet Shares


According to a study from Cornerstone (December 2020), almost two-thirds of all smartphones have PayPal installed. PayPal's mobile wallet has powered 28% of in-store mobile transactions and 48% of all online transactions.5

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Enough methods and options


A strong payments strategy is a key driver for DTC businesses. Research suggests that it takes 22 clicks on average to complete an online purchase. Adoption of one-touch payment methods such as digital wallets, merchants will become imperative for small and medium eCommerce businesses to address laborious checkout processes that weaken customer engagement and increase cart abandonment.6

One-click checkouts and credit card information storage both promote faster checkouts and return visits. One of the biggest reasons for the abandonment of carts during checkout is the requisite to create an account first. Lack of guest checkout option was cited as a reason for abandonment by 24% of respondents in the US in 2021 in a survey by the Baymard Institute. 7% of respondents in the same survey cited the lack of sufficient payment methods as a reason for cart abandonment.

Likewise, a survey by Adyen and 451 Research in 2020 revealed that 42% of respondents are less likely to shop with a brand if it offered limited payment options.8

PipeCandy estimates that there are around 121,000 DTC eCommerce brands and businesses in the US. More than 70% of them generate GMV of less than USD 5M, hence cannot afford to have cart abandonments.

Merchant Shares of Payment Methods – US DTC Brands


We sampled 15,675 DTC eCommerce businesses to understand the payment acceptance trends among the US DTC brands. We examined the trend by analyzing the installed base of American Express, Apple Pay, PayPal, Google Pay, Mastercard, Venmo, and Visa. Among these technologies,

  • PayPal is accepted by 86% of all sampled DTC merchants. It had over 426 million active consumer accounts as of December 2021. Back in 2018, A study by Ipsos revealed that consumers are 54% more willing to buy when a business accepts PayPal and 59% of PayPal users have surveyed abandoned a transaction because PayPal wasn't there.



  • When it was launched in 2014, Apple Pay's objective was to replace people's wallets and be used for payments while shopping in stores. As of September 2020, there were 507M active iPhone users with Apple Pay enabled. As a mobile wallet, Apple Pay has 92% of the wallet share far exceeding Google Pay or Samsung Pay but as a digital wallet, it lags behind PayPal. While 47% of online shoppers reported PayPal as their online shopping wallet of choice (Match 2021), Apple's peak share was 15 percent. Apple Pay is accepted by 70% of retailers in the US but has acceptance with 74% of DTC brands.



  • 83 million people used Venmo in the United States at the end of Q4 2021. Venmo is particularly popular amongst younger cohorts, especially those who are more affluent than the average consumer. Venmo customers in this cohort are open to shopping online with Venmo if they are offered rewards. According to a PayPal survey, Venmo's customer spending increased by 65% during the pandemic and 47% of its users showed interest in paying merchants through Venmo if offered.12
  • Only 42% of the DTC brands in the US provide a Google Pay checkout and only 11% of online shoppers identified Google Pay as the wallet of choice.13




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