"Reliable statistics which give us the full picture of the volume of financial transactions being made on the Internet do not exist". With that statement, CEO of eCompany`s Payment Technology division Barry Coetzee set a great many records straight, at ICM`s Payment Solutions & Security Conference, on 30 October.
In his address entitled "Ubiquity and the Democratisation of Internet Payments", Coetzee told delegates that neither card issuing nor financial acquiring institutions have had measures in place to differentiate between credit card transactions made in the virtual and physical worlds.
As a result of this lack of information, it is nigh impossible to determine how many e-commerce transactions are repudiated, and thus to gauge the risk to merchants. According to Coetzee, however, probably the greatest contributing factor in the repudiation of Internet transactions, is the inexperience of many Internet merchants in the business of being a good merchant.
Of course, in the not so distant past many had thought this kind of problem would be eliminated by the much-touted SET. Coetzee, however, sounded the death knell for SET, pronouncing that it would be dead within 18 months. He conceded that it is a superb idea, but reiterated that which has been obvious to most from the outset, that whilst practical to implement at bank and merchant level, SET is far too cumbersome and expensive to roll-out to card holders.
Coetzee maintained that whilst credit cards are by no means the ideal solution for e-commerce payments, they remain the best available option. Whilst the smart card is perhaps the best and safest solution, it requires that users have a physical `reader` present to process the card, and whilst e-currencies are cute, they certainly aren`t ubiquitous.
In describing the ubiquity of credit card payments, he made his point with a vivid analogy: "The credit card is still the only payment solution that works worldwide. With it, a cardholder in India can purchase biltong from a merchant in Parys, via a Web site hosted in Bermuda, pay for it in Rands and have it reflected on his statement in Rupees."
He concluded "The future of virtual payments is being plotted on a daily basis. As the industry learns what this new virtual economy actually needs, new systems will be implemented to address these needs. Some of these systems, like SET, will flare and then fade away, others will succeed. Like all other pioneers before us, the route forward is not mapped, tarred and secure. It is an adventure, where fortunes will be lost and made.
"The virtual economy is not for the fainthearted. But for those who practice common sense and keep their eyes open, there is an opportunity to be part of the beginning of something that will definitely change the way the world works."
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