Magazine article American Banker

On-Line Buying Explosion Seen: $16B in U.S., Europe in 4 Years

Magazine article American Banker

On-Line Buying Explosion Seen: $16B in U.S., Europe in 4 Years

Article excerpt

On-line purchases will soar to $16 billion in the United States and Europe in 2002, fueled by Internet-based card transactions, the Datamonitor research firm estimated.

Last year's total was between $300 million and $500 million, London- based Datamonitor estimated. In a report based on interviews with 120 executives at technology companies, retailers, and financial institutions, the firm predicted that in five years 85% of U.S. and 81% of European Internet purchases would entail use of credit or debit cards. On-line purchases from the United States would be worth about $12.5 billion; those from Europe would be valued at $3.5 billion.

The estimates are considered conservative. Two other research companies, Jupiter Communications of New York and Forrester Research of Cambridge, Mass., have projected that electronic commerce in the United States would be worth $37.5 billion and $66.5 billion, respectively, by 2002.

Though nascent, the market for electronic payments already has "consolidated into three segments: micropayments, electronic cash/small payments, and on-line credit card payments," said Geoffrey S. Doggart, senior business analyst at Datamonitor's London office. All three segments are likely to grow, but card-based transactions will grow the fastest, he said.

The launching of the Visa and MasterCard-supported Secure Electronic Transaction, or SET, protocol this year will play an important role in generating transaction card-based volume in Europe, said Mr. …

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