FROM USA TODAY:
Credit, E-Cash or Smart Card? How to Make Sense (Cents?) of Online
Payment Methods
Ka-ching! Shoppers spent an estimated $13 billion online in 1998, including a hefty chunk
during the holiday e-tailing explosion. Click for more. That's a lot of money zipping over the
wire.
With consumers flocking to the Net, shoppers and sellers alike are wondering, "How are we
going to pay for our purchases?" As in how, exactly, does our hard-earned money travel from
wallet to e-tailer? It's a question many are struggling to answer.
When you shop at a brick-and-mortar store, payment options include cash, credit, debit and
check. Obviously, bills and coins aren't an option online. But those other ..methods -- and
Net-specific ones, too -- want to be your currency of choice in cyberspace:
Credit Cards: If you bought gifts online this holiday, I bet you paid with plastic. Credit cards,
(and debit cards that share their networks) are the preferred method of payment among
online consumers. With good reason:
•Easy to use -- no technology hurdles, almost everyone has one •Consumers trust card
companies to conduct secure transactions •Most merchants accept them •Oh yeah,
Americans love credit!
Electronic Cash: Nobody would use a credit card to buy a single newspaper. Or a bookmark.
Or a can of soup. Which is why ecommerce experts are struggling to find a way to charge
consumers for stuff costing less than $5 -- not worth the transaction costs involved with credit
cards.
Compaq is studying the results of just-wrapped trials for its MilliCent system. Click for more.
IBM is working on a micropayment method called Minipay. Click for more.
Smart Cards: Like Jerry Lewis and broiled snails, smart cards -- onto which consumers
digitally download "money" -- are popular in France, but not in the U.S. Not for lack of trying.
Many banks and tech firms -- including Microsoft (click for more) -- are intent on establishing
Stateside smart card systems. They're optimistic because:
•Smart cards are efficient, secure, paperless, intuitive and speedy •Real and virtual stores
accept them •Support for smart cards spans many industries, from banking to health care
•Consumers abroad dig them
In the end, I predict smart cards will achieve widespread U.S. acceptance. Eventually, they'll
change your life. Well, at least the way you pay for things. Until then . . . just charge it.
USA TODAY
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