yeah, sure.
hahahahahahahahahahahha, so just for you, here is another one, but don't read it if you are long. hahahahahahahaha
The Big Bite
April 14, 1999
PC Computing: Don't look behind you, but teeth are chomping at your tail. They belong to credit-card companies that you now have to buy off--like the Mob--for the privilege of doing business in cyberspace. Like it or not, plastic is the Web's only legal tender. Those who support alternative forms of electronic cash will bray in protest, but the fact is, start-ups such as ECash, CyberCoin, and MilliCent have been as effective at winning over converts as hostile street preachers. Visa, MasterCard, and AmEx wangle some 98 percent of all purchases made on the Web.
That's 98 percent of last year's $10 billion Internet economy. But friction-free capitalism it's not--not when credit-card companies take up to a 2.5 percent bite out of every merchant's bottom line in transaction fees. Plastic has become the Web's currency, all right; but it's issued by private companies, not by democratic governments. Unlike the greenbacks rolled up in your sock, someone must pay a toll to use today's e-cash. That someone is probably you.
Chomp, Chomp Of course, terrestrial merchants get the same bite in the bum where transaction fees are concerned. Yet outside the Internet only about 20 percent of all purchases are made with plastic. Besides, both merchants and customers have a choice in how they pay. In cyberspace, you eat the cold soup offered you . . . or starve.
But here's the real rub: There's nothing you can do about it. Uncle Sam isn't going to help; credit-card purchases leave a paper trail for tax collectors. Customers prefer plastic because its familiar rituals placate superstitions about security on the Web. It's in your interests too; almost everyone holds a credit card.
The real winners in electronic commerce are turning out to be the credit-card companies. And why not? Few prospectors got rich during the California Gold Rush. The smart money rode on the folks who sold shovels and whiskey and boarding rooms to the prospectors. Same with the Web. The stock prices of Amazon.com or eBay.com may go up in flames tomorrow, but the Internet economy won't. Internet sales are expected to at least quadruple to $40 billion this year.
And credit-card companies take a bite of every dollar. Visa alone expects to process $13 billion in Internet charges this year, or about 1 percent of its total activity. By 2003, those numbers are expected to reach $100 billion and 11 percent, respectively.
Got Your Number Online merchants haven't fussed much about transaction fees because in the youthful economy of the Internet, branding and building volume is more important than putting the screws on cost inefficiencies. As the Web matures, this will change.
Even then, merchants shouldn't squeal too loudly. Transaction fees are galling. But in addition to biting your flanks, they also protect them. Credit-card fraud is rampant on the Web. Cardholders don't lose from fraud; their liability is limited. Banks and merchants take the hit.
Content providers are particularly vulnerable. Unless a physical product is shipped to a physical address, a provider has no way to prove that a surfer is the legitimate cardholder. If the surfer contests the charges, the provider eats the costs. Period.
Visa estimates that contested charges run as much as 35 percent higher on the Internet than elsewhere. This is one reason it's pushing its Secure Electronic Transactions (SET) specification--and has won support from Microsoft, Netscape, and IBM. SET protects the privacy of a customer's financial details, while giving online merchants a way to verify a cardholder's identity.
It's been slow to catch on in the United States (Europeans love it), but this should change quickly. So when you feel your blood pressure boiling from transaction fees, try to think of them as your tax dollars at work.
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[Copyright 1999, Ziff Wire] |
