In today’s world, credit cards are the most popular means to pay for online goods and services, but it is estimated that alternative payment methods will account for nearly 26% of e-commerce volume by 2009. In the Federal Reserve’s 2007 report on noncash payments, they found that electronic payments now exceed two-thirds of all noncash payments.
A change has commenced within the world of online payments, as the dominance of credit cards is beginning to loosen while new payment options emerge. Credit cards accounted for over 90% of online payments volume just as recently as the year 2000, but will only account for a minority of e-commerce dollar volume by 2009. As a result of this modern shift, there will be significant implications for banks, merchants, and service providers supporting card-not-present risk for online merchants.
“There is growing recognition among the online community that online payment alternatives to the credit and debit card can do far more than lower costs,” explains Dan Schatt, senior analyst in Celent’s Banking Group and author of the report. “They can serve as allies to merchants in their quest to convert more prospects into sales in a way that contributes positively to the customer experience and actually lowers risk. As merchants search for any edge that can increase loyalty and lower shopping cart abandonment, they will enlist new providers that can do more to increase their profitability.”
MyECheck, Inc. (MYEC.OB) was created in 2004 to satisfy the demands for a viable alternative payment solution to credit cards for online commerce. The company’s utilizes their patent pending method of creating and clearing remotely created checks (RCC’s) for exceedingly fast, secure and convenient payments. Today, MyECheck is a leader in Check 21 solutions offering the most comprehensive suite of electronic check processing services in the industry.
The report states a key finding anticipating that innovative payment services providers will experience 55% revenue CAGR, the industry’s most rapid growth. The report points to significant opportunities lying ahead for some payment services providers – such as check services providers – and downplays the prospects of others, such as micro-payment ventures. Celent predicts that the e-check’s share of e-commerce value will climb for the next 5 years.
“Some issues, like micro-payments, are currently receiving a level of attention that is out of sync with the real opportunities,” says Gwenn Bezard, a Senior Analyst at Celent and author of the report. In reference to e-check’s growing market share, Bezard states, “The check authorization business might not be the sexiest thing on earth, but that’s one area where sound opportunities lie ahead.”
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