The credit crunch and the subsequent recession will result in a surge in online spending over high-street retail spending this Christmas, as prudent shoppers will shop early to purchase smaller items.
Keiron Guilfoyle, managing director of the 3V disposable credit card company, told siliconrepublic.com that the credit crunch has impacted on people’s willingness to borrow on credit, and this will result in demand for alternative payment solutions.
Guilfoyle’s company 3V makes disposable credit card vouchers that consumers can purchase behind the counter of newsagents for cash. The company sells the vouchers in more than 20,000 merchants across Germany, 17,000 merchants in the UK and 1,100 in Ireland.
“Credit card debt is like mortgage debt and is securitised in the same way,” says Guilfoyle. “Thanks to the credit crunch, some 65pc of this money has disappeared. This is leading to an increase in rejection for credit, increased APR and usage charges.
“We’re finding our business has been growing particularly in the last three to six months because people who are maxed out on credit or don’t want to leave a financial trail online are looking to the internet for value.
“From what we’ve seen, the e-commerce market will prove to be stronger than retail this Christmas.
“A lot of people are flocking to eBay looking for bargains. In terms of what people are going to buy during the downturn this season will be small items such as books, CDs and DVDs or concert tickets. Sites like Amazon.com and CD-Wow will do well this year.
“It will bring about the predicted tipping point for e-commerce sales in the Irish market, as broadband usage has increase people will transact more online.”
In effect, many more Irish shoppers, who in previous years didn’t shop online, will opt to do so this year.
“Electronic goods may also thrive this Christmas, for example handheld GPS navigation devices can be bought online from the US for 20pc of what they cost in stores here,” Guilfoyle said.
By John Kennedy