[Dave Birch] Some of the figures in a recent edition of Digital Transactions News are worth repeating. What they mean is, naturally, open to interpretation but one interpretation might be there is plenty of opportunity for new retail e-payment schemes that can deliver a “better” solution for online payments.

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There are three chunks of statistics that I think serve to highlight major trends.
1. In the US, “alternative” e-payment methods for online commerce (ie, not credit or debit cards) were about 12% of the market by value in 2005 and will grow to around 26% by value in 2009 (source: Celent, 6/06). Most growth will come from online PIN debit and new ACH access.
2. Overall, e-commerce merchants have managed fraud down from 3% in 2002 to 1.6% today, but at a substantial cost: more than a billion dollars invested in back-office staff and fraud-detection technology.
3. Credit cards are losing e-commerce market share perhaps more rapidly than many observers may have thought: they now account for 58.3% of online sales, down from a dominant 96% share in 1999. By 2009 that share will have dwindled to just 48.4%. This decline comes as credit cards continue to make gains in the U.S. economy as a whole. They account for 26.1% of all transactions, up from 22.1% six years ago, and will reach a 29.3% share by 2009.
Obviously, it’s not for me to tell credit card issuers how to run their own businesses (that’s the job of management consultants), but fixing CNP must be an absolute priority.


  1. I agree with you. But I also think that the e-commerce must be drive by Credit cards systems. I don’t know if you read french stuff but I found a site that explain very well most of the concerns… I would appreciate your comments about it…
    tks !
    [Dave Birch] I apologise unreservedly, but I am afraid my French is not up to reading the site. Could you provide a short summary?

  2. Hi Again Dave,
    sorry for the delay.
    It’s a little bit long to explain because I’m not very good in english. But well… This student work was the first classification of Iinternet Payment Systems. It describe around 40 differents systems, comparing each other with 12 parameters. It explain the advantages of credit cards base systems for the customers, reducing the real risk that it’s assume by the vendor because of the contract with the card company (VISA, …) This part is explain here :
    The global end talk about the help of the SET protocol… and the collaboration need between VISA and MasterCard…

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