eCommerce grows 13 percent in first quarter of 2013

The growth of eCommerce remained steady, if unspectacular, in the first quarter of 2013, according to a report from comScore. 

Revenue made from online sales surpassed $50 billion for only the second time in history, but the sector as a whole grew only 13 percent over the fourth quarter of 2012. While that's a relatively impressive figure, it was somewhat lower than the growth found in Q3 and Q4 last year, by roughly 2 percent. The results also fell below average industry projections and the slight drop-off may indicate to some of the more pessimistic analysts that the market is slowing down.

Optimistic analysis suggests growth is steady and should be considered as a positive sign for the future. There is truth to that, as one of the driving forces behind eCommerce today is the rise of government and B2B sales. Public employees and procurement specialists want a shopping experience similar to what they get at home and are taking to their computers at work to get it.

But if those indicating eCommerce is indeed slowing down are right, the leading cause may be the tax issue. In a statement, comScore chairman Gian Fulgoni indicated that if vendors have to start charging in-state sales tax for online transactions, eCommerce would lose its main competitive advantage over traditional sales.

"One wild card is the possible enactment of legislation requiring state sales taxes to be collected on every e-commerce transaction - which would reduce the Internet's traditional price advantage and possibly dilute the channel's growth rate," Fulgoni said.

Yet sales tax issues will have far less impact on B2B ecommerce since it is already common for vendors to work with customers who present tax exempt certificates.  Of course, government purchases are tax exempt as well.  For these B2B and B2G tax exempt purchasing card sales to qualify for the lowest possible Interchange fees, line item Level 3 data must be passed with the transaction at settlement.  Working with a Level 3 payment solutions provider will help vendors submit this information and increase the value of each transaction.

by Ty Hardison

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